Reflecting continuing difficulties in retail and wholesale market circumstances, THOR Industries (THO, Financials) announced a drop in profits for its fiscal first quarter of 2025 ended Oct. 31; shares are down post earnings.
With a decline in net income from $53.6 million to a loss of $1.8 million, the firm reported net sales of $2.14 billion, a 14.3% reduction from $2.50 billion in the same quarter of 2023.
Down from $357.9 million a year earlier, gross profit for the first quarter was $281.4 million; gross profit margin dropped to 13.1% from 14.3%. Versus profits of $0.99 in the first quarter of fiscal 2024, diluted earnings per share were recorded at a loss of $0.03, reflecting the overall decline in the company's fortunes.
With net sales of $898.8 million, THOR's North American Towable RV division saw a 4.9% annual year-over-year decrease. Though the total net price per unit dropped by 11.7%, unit shipments rose by 6.8%, resulting in a flat gross profit margin of 12.5%. From $49.2 million a year earlier, income before income taxes for this group dropped to $46.8 million.
Due mostly to a 33% loss in unit shipments, the North American Motorized RV sector witnessed a more severe decline in net sales—29% to $506.2 million. From 11.2% to 8.5% the segment's gross profit margin dropped; revenue before income taxes dropped dramatically to $9.1 million, from $37.1 million in the previous year's quarter.
Down 14.6% from last year, European RV sales came out to be $604.9 million. A 12.8% rise in net pricing per unit, which included a 2.5% gain from favorable foreign exchange rates, somewhat offset a notable drop in unit shipments by 27.4%. From 17.3% to 15.3% the gross profit margin dropped; revenue before income taxes dropped from $1.2 million to $28.8 million the year before.
CEO Bob Martin underlined the company's emphasis on matching output to the sluggish retail environment to prevent too much inventory build-up among independent dealers.
Senior Vice President Todd Woelfer pointed out that non-recurring strategic expenses of $15.5 million affected first-quarter numbers. These expenses, connected to site closures and staff cuts, are estimated to save annually more than $10 million going forward.
Expecting consolidated net sales between $9.0 billion and $9.8 billion and a gross profit margin in the range of 14.7% to 15.2%, THOR maintained its fiscal 2025 projection. Projected are diluted profits per share between $4.00 and $5.00. In especially in North America, management expects more market activity in the latter half of the fiscal year.
