Winnebago results spark buying in RV names

Shares of recreational vehicle maker Winnebago (WGO) are moving higher on Wednesday after reporting third quarter financial results that beat estimates. The RV maker reported Q3 earnings per share of $1.02 on revenue of $562.3M, beating analysts' consensus estimates of 91c and $540.59M, respectively. INFLATIONARY PRESSURES: Gross profit margin was 15.2% in the quarter, an increase of 30 basis points versus14.9% last year, driven by the continuation of accelerated growth in the Towable segment. "While inflationary pressures have been building and will continue to do so, our teams are working hard to mitigate these through numerous cost savings initiatives and select price increases where necessary. Our new product launches across both segments are performing well, driving healthy backlog increases, and we remain comfortable with our current dealer inventory levels which are supported by our strong retail performance and increases in market share," said chief executive officer Michael Happe. Earlier this month, Winnebago competitor Thor (THO) said its overall gross profit margins declined to 14.1% in Q3 compared to 14.6% in the prior-year period, reflecting increased costs primarily associated with warranty expenses, including expenses associated with an extended warranty program on certain products, as well as slightly higher labor and material costs, while Q3 net income was enhanced by Trump tax cuts. "Our third quarter results reflect another period of solid growth of both sales and earnings," said Thor CEO Bob Martin at the time. PRICE ACTION: Shares of Winnebago are up about 12% to $45.15 in afternoon trading. RV PEERS FOLLOW HIGHER. Shares of RV peer Thor are trading higher as well as related companies, including Camping World Holdings (CWH), Polaris Industries (PII) and REV Group (REVG).