Winnebago Industries, Inc.

Good morning, everyone, and thank you for joining us today to discuss our fiscal 2022 fourth quarter and full year earnings results. As you may know, I am new to Winnebago Industries and excited to be working with the team as we continue to partner with our analysts and investors and seek to deepen our relationships with the investment community. I look forward to connecting with more of you in the months ahead. I am joined on the call today by Mike Happy, President and Chief Executive Officer, and Brian Hughes, Vice President and Chief Financial Officer. This call is being broadcast live on our website at investor.wgo.net. And the replay of the call will be available on our website later today. The news release with the fourth quarter and full year results was issued and posted to our website earlier this morning, along with the fourth quarter earnings supplement. Before we start, I would like to remind you that certain statements made during today's conference call regarding Winnebago Industries and its operations may be considered forward-looking statements under securities laws. The company cautions you that forward-looking statements involve a number of risks and are inherently uncertain, and a number of factors, many of which are beyond the company's control, could cause actual results to differ materially from these statements. These factors are identified in our SEC filings, which I encourage you to read. With that, I would now like to turn the call over to our President and CEO, Michael Happey. Mike?

Thanks, Ray. and let me officially welcome you to the team. We look forward to your contribution, certainly. Additionally, I would like to thank Steve Stuber for his efforts in the past several years as our investor relations leader, and wish him well as he transitions internally to the CFO position within our Grand Design RV subsidiary. We are truly grateful to have both Ray and Steve on our team here. Now, good morning, everyone. As always, we appreciate your interest in Winnebago Industries and taking the time to discuss our fiscal 2022 full year and fourth quarter results. I will start the call with an overview of our performance during the quarter and the full year, then pass it to Brian Hughes to cover our financial results in more detail. Subsequently, I will offer some closing thoughts before we turn to your questions. As those who follow Winnebago Industries know well, over the past seven fiscal years, we have been laser focused on enhancing and strengthening our enterprise portfolio. The success of those initiatives has created a more diversified, resilient, competitive, and profitable Winnebago Industries. This was never more evident than in fiscal year 2022 when our company achieved record revenue, profitability, and overall outdoor market share. Today, we have five premium outdoor brands spanning two large and secularly strong outdoor recreation industries, recreational vehicles and marine, both enabling us to connect with a broad range of outdoor consumers. We have also substantially grown our overall market penetration as more outdoor lifestyle consumers recognize and respond to the golden threads of quality, service, and innovation they see throughout the Winnebago Industries portfolio. It is no secret that demand for outdoor products exploded in the last two years, and that new consumer trends have emerged which will impact our industries forever. Thanks to the relentless focus commitment and heart of our world-class team here, we delivered on unprecedented levels of demand for our premium products as new and existing consumers embraced the outdoor lifestyle. While recognizing the inevitable normalization of short-term outdoor demand, we continue to believe that growing interest in the outdoors by an increasingly diverse range of consumers are lasting in the long term. and that we at Winnebago Industries are better positioned, more than ever, to serve a wide range of consumers with our diversified portfolio. The past year has ushered in a new landscape. Inflation and rising interest rates are reshaping the economy on a macro level. These trends are certainly impacting the strong retail demand environment that Winnebago Industries has been so successful at capitalizing on. However, we feel confident that our business is positioned to continue to perform well through economic cycles. I will touch on the multiple ways we are adjusting to ensure that we continue to deliver strong profitability and shareholder value. Our recent performance in fiscal year 2022 best demonstrates our flexibility and ability to deliver in a volatile environment. WINNEBEGO INDUSTRY'S FOURTH QUARTER RESULTS WERE A STRONG FINISH TO AN OUTSTANDING YEAR IN WHICH WE DELIVERED RECORD REVENUE AND PROFITABILITY. WE RECORDED FOURTH QUARTER NET REVENUES OF $1.2 BILLION, WHICH REPRESENT A 14% INCREASE OVER THE SAME PERIOD LAST YEAR. OUR PERFORMANCE WAS DRIVEN BY THE SAME KEY DYNAMICS THAT HAVE SHAPED THE LAST FEW QUARTERS. A SUSTAINED EXCITEMENT FOR THE OUTDOOR LIFESTYLE REMAINED A POWERFUL TAILWIN DRIVING DEMAND FOR WINNEBAGO INDUSTRY'S PREMIUM PRODUCTS. OUR LEADING BRANDS CONTINUED TO WIN WITH OUR INCREASINGLY DIVERSE CONSUMER BASE ALLOWING US TO MAINTAIN OUR STRONG MARKET SHARE POSITIONS WITHIN A CHALLENGING ECONOMIC ENVIRONMENT. SECOND, OUR TEAM'S RELENTLESS DEMONSTRATION OF OPERATIONAL EXCELLENCE ENABLED US TO DELIVER FOR CONSUMERS and our dealer partners efficiently and profitably. The team has delivered on the bottom line through the pricing power of our brands, the innovation of our products, the agility of our supply chain, the increasing efficiency of our operations, and disciplined investments in SG&A. As I have discussed in previous quarters, in this constantly evolving macro environment, the holistic supply chain for each of our segments are experiencing varying degrees of disruption, which in turn impacts dealer inventory levels in different ways. For example, we continue to manage total RV production levels to align with ongoing consumer and market demand. while our motorhome RV and marine businesses work to replenish dealer inventories carefully. Responsibly producing and maintaining appropriate field inventory levels remains a priority, and we are working closely with each of our dealer partners to sustainably ensure they have the supply they need. I have confidence that the world-class Winnebago Industries team will rise to the challenges they always have. OUR PERFORMANCE THROUGHOUT FISCAL 2022 IS A TESTAMENT TO THE POWER OF OUR PEOPLE, THE STRENGTH OF OUR OPERATIONS, AND THE EXTRAORDINARY QUALITY OF OUR PRODUCTS. EARLY IN THE YEAR, WE DELIVERED ON VERACIOUS DEMAND, RUNNING OUR PRODUCTION AT FULL CAPACITY TO ACHIEVE TREMENDOUS GROWTH. EVEN THEN, WE LIKELY LOST SHIPMENT SHARE IN SELECT RV CATEGORIES AS WE MAINTAINED AN ONGOING SENSE OF DISCIPLINE IN SHIPMENTS VERSUS OTHER INDUSTRY PLAYERS' APPETITES. As market conditions have recently downshifted, we have exercised further rigor and a focus on sustainable long-term value by constantly adjusting production in certain business segments to calibrate to the needs of our dealers and the end consumer demand levels. Additionally, our team executed and managed the businesses through supply shortages and pricing actions to cover significant cost inflation through the year. delivering annual record net revenues of $5 billion, record annual RV market share of 12.7%, and a record gross margin of 18.7%. And finally, we returned record levels of cash to our shareholders, which Brian will touch on during his commentary. Most importantly, we continue to innovate here and add strategic investments and talent, Earlier this year, we introduced the ERV, the first all-electric, zero-emission motorhome concept from a major RV manufacturer. And we even drove the product more than 1,300 miles on a single road trip. We are moving closer to commercialization, with multiple prototypes being tested by actual end customers as we approach calendar year end. At the recent Open House RV event in late September, Each of our RV business units introduced multiple new products, many of which won category awards and were received very positively by our dealer base. We also added new senior leadership to our team this year, including Casey Tubman as Newmar's president, Jeff Haradine as Barletta's president, and Amber Holm as Winnebago Industries' first ever chief marketing officer. significantly enhancing our team with experience and exciting new capabilities. Overall, I am incredibly proud of our performance in fiscal 2022. Our record results show that our strategy is working while our team continues to deliver outstanding results in the face of a future volatile macro environment. I look forward to continuing that focus with our team and continuing to create value as we move into fiscal 2023. With that summary, I will now turn the call over to our Chief Financial Officer, Brian Hughes, to review our fiscal 2022 fourth quarter and full annual financial results in more detail. Brian?

Thanks, Mike, and good morning, everyone. As Mike noted, Winnebago Industries' fourth quarter results represented a strong finish to a record year. Fourth quarter revenues were $1.2 billion, reflecting an increase of 14% compared to $1 billion for the year-ago period. Excluding Barletta, our organic growth for fourth quarter was 4%, driven by pricing actions and increased motorized unit shipments. which was partially offset by a decline in unit shipments on the towable RV segment as we pulled back on production and shipments during the quarter in response to the level of inventory in the channel. As a reminder, this is the last quarter that we will be reporting organic results excluding Barletta, given we closed the transaction very early in the first quarter of fiscal 2022. Gross profit for the quarter increased 12.4% to $210.4 million, compared to $187.2 million for the fourth quarter of fiscal 2021. Gross profit margin of 17.8%, with 30 basis points lower than last year, as a result of higher material and component costs, including higher logistics costs, and lower volume in the towable segment and associated deleverage, partially offset by pricing actions and the timing of those actions as compared to the realization of increases to our input costs. Operating income, therefore, increased 3% to $123.6 million for the quarter, compared to $120 million for the fourth quarter of last year. Fourth quarter reported diluted earnings per share was $2.61, compared to $2.45 in the same period last year. Adjusted earnings per diluted share increased 14% to $3.02 compared to $2.65 in the same period last year. Consolidated adjusted EBITDA increased 7.9% to $139.2 million for the quarter compared to $129 million last year. Turning now to the fiscal 2022 annual results. Capitalizing on strong consumer demand and the need to replenish dealer inventories, Winnebago Industries delivered record annual consolidated fiscal 2022 results, including record revenues of $5 billion, a record gross profit margin of 18.7%, and record reported earnings per diluted share of $11.84. and adjusted earnings per diluted share of $13.81. Sales growth of 36.6% was driven by the recently acquired Barletta business, pricing actions, and strong volume growth in every business, supported by sustained demand and the particularly low field inventories we had in our dealer network as we entered the year. Our annual gross profit margin increased 80 basis points over the prior year as a result of operating leverage and the well-timed price increases that served to offset inflationary pressures. Our team also worked extremely hard throughout the year battling constant supply constraints, which were a steady disruption to our production environment and caused operational inefficiencies. Now, turning to performance by segment, total revenues were $494.2 million for the fourth quarter fiscal 2022, down 11.8% compared to the fourth quarter of fiscal 2021. As Mike mentioned, we adjusted our production schedule in the fourth quarter in response to fully replenished dealer inventories, resulting in a 33% decline in unit shipments. Adjusted EBITDA for the tollable segment was $53.2 million down 36.2% from the prior year period. Adjusted EBITDA margin of 10.8% decreased 410 basis points compared to the prior year due to higher material and component costs and deleverage partially offset by pricing actions. This lower margin in the quarter was anticipated as earlier in the year we priced ahead of inflation with the expectation that inflation would have an impact over time. Given the market dynamics, THE STATE OF INVENTORY IN THE CHANNEL, AND IN ANTICIPATION OF OUR DEALER EVENTS IN SEPTEMBER, WE ELECTED TO FORGO FOR THE PRICE INCREASES IN OUR FOURTH QUARTER. BACKLOGS DECREASED TO 576.5 MILLION, DOWN 66.2% FROM THE PRIOR YEAR, DUE TO NORMALIZED DEALER INVENTORY LEVELS AND THE EXTENSIVE ORDER FULFILLMENT THROUGHOUT OUR FISCAL YEAR. FOR THE FULL YEAR, Revenues for the total segment were $2.6 billion, up 29.2% over fiscal 2021, driven by strong consumer demand and pricing actions that were taken to offset higher material and component costs. Segment adjusted EBITDA was $383.6 million for fiscal 2022, up 32.7% year-over-year. Adjusted EBITDA margin of 14.8% increased 40 basis points over fiscal 2021. The motorhome segment continued to perform well with fourth quarter revenues of $555.8 million up 23.8% from the prior year due to continued strong unit sales and pricing actions related to higher material and component costs. Adjusted EBITDA of $77.4 million increased 53.4% compared to the fourth quarter of last year. Adjusted EBITDA margin for the quarter was 13.9%, representing an increase of 270 basis points over the prior year due to pricing actions and production efficiencies partially offset by higher material and component costs. Backlog decreased to $1.7 billion, down 26.7% from the prior year. On an annual basis, motorhome revenues increased 24.2% year-over-year to $1.9 billion due to pricing actions related to higher material and component costs and increased unit sales. Segment adjusted EBITDA was $238 million, up 40.7% from fiscal 2021. Adjusted EBITDA margin of 12.5% grew 150 basis points compared to fiscal 2021. Total marine revenues for the fourth quarter were 122.1 million, driven by the continued strength of Barletta and good performance from Chris Craft. Excluding Barletta, revenues were 23.7 million, representing 41.8% organic growth compared to the same period last year. Segment adjusted EBITDA for the quarter was 17.5 million, a 15.8 million increase over last year. Adjusted EBITDA margin was 14.3%. Backlog for the marine segment was 314.7 million, and remains elevated as low dealer inventories persist in this segment. Consolidated marine results for fiscal 2022 include revenues of $425.3 million, up $365.1 million from fiscal 2021, driven primarily by the addition of the Barletta business. Segment adjusted EBITDA was $60.8 million. up $55.7 million over fiscal 2021. Turning to Winnebago Industries' balance sheet, as of the end of the fiscal year, we had $545.8 million in total outstanding debt, composed of $600 million in debt, net of convertible note discount of $45.3 million, and net of debt issuance costs of $8.9 million. We also had working capital, of $571.7 million. Winnebago Industries continues to hold a very healthy liquidity position and recently added to it by securing an increased asset-based lending credit facility of $350 million. This upgrade was fully driven by the need to right-size our ABL facility to the current size of our business from our previous $192.5 million facility. Our current net debt to adjusted EBITDA ratio is 0.5 times, which remains below our targeted range of 0.9 to 1.5 times, allowing us to execute on our balanced capital allocation strategy to make strategic investments serving the growth in our business while also returning cash to shareholders. As evidence of our commitment to these priorities, Winnebago Industries recently increased the dividend by 50% to 27 cents per share for this most recent quarterly dividend payment. This increase reflects our continued confidence in Winnebago Industries' ability to remain resilient through the volatile market conditions that we are currently facing and maintain strong profitability. In addition, we bought back $80 million of shares during the fourth quarter, a new record, fully depleting our previous share repurchase authorization and resulting in our Board of Directors approving a new $350 million authorization. We executed approximately $210 million of share repurchases, around 11% of shares outstanding at fiscal year-end 2021 during the course of fiscal 2022. We are pleased to have exercised all levers of our capital allocation priorities during fiscal 2022. In addition to investing in organic and inorganic growth to capture the strategic opportunities within reach, Winnebago Industries returned a record $233 million to shareholders in the form of share buybacks and dividends. And all of this while maintaining a healthy balance sheet that allows us to continue to invest for outsized returns on behalf of our shareholders. That concludes my review of our financials for the quarter and full year. I'll now turn the call back to Mike to provide some closing comments.

Mike? Thanks very much, Brian. As we reflect on fiscal 2022, we are proud of the financial, organizational, and cultural strides we have made. While we anticipate some select supply chain constraints will linger into fiscal 2023, particularly in the motorhome and marine segments, we continue to make progress and become more effective at minimizing the related impacts by collaborating closely with our suppliers. We also continue to monitor inflation while trying to balance pricing actions in a tougher demand environment and affordability of our premium products for our customers. In addition, we continue to leverage operating efficiencies and leverage our variable cost structure to help maximize profit margins as possible. We will build on our strong momentum by continuing to focus on executing our proven strategies and introducing new products across all our brands. I was particularly excited to witness the many new products showcased at the recent RV Open House event in Elkhart County, Indiana. Our Winnebago Grand Design and Newmar products were impressively displayed for dealers and industry partners to experience. Each of these RV brands also received the latest RVDA Dealer Satisfaction Awards as presented in recent weeks. I look forward to seeing the results of our collective efforts in the months to come. The unique strength of all Winnebago Industries brands will position us to continue to win with consumers, building on our growing trailing 12-month RV market share of 12.7% and moving the Barletta brand, currently at 6.9% market share in the latest SSI report, firmly into the top five in the pontoon market. Now I want to quickly touch on expectations for the RV industry for the upcoming year. As mentioned previously, we are monitoring closely the macroeconomic environment to help assess outdoor leisure retail demand. All things considered, and knowing that there are numerous factors that can impact forward-looking estimates materially, we are generally aligned with RVIA's recently released data and are projecting a range of 490,000 to 500,000 in shipment units for calendar year 2022. Concerning calendar year 2023, we believe industry RV shipments will likely trend closer TO A RANGE OF 400,000 TO 410,000 UNITS FOR THAT PERIOD, SLIGHTLY LOWER THAN THE LATEST RVIA FORECAST. FOR RETAIL, WE ESTIMATE 450,000 RV UNITS FOR CALENDAR YEAR 2022 AND RETAIL UNITS EQUIVALENT TO WHOLESALE SHIPMENTS IN 2023. and in the long term, we are confident that Winnebago Industries has significant headroom for sustained profitable growth and enhanced value creation for our end consumers, dealers, employees, and shareholders. The confidence we have in our ability to drive continued value is highlighted by the recent 50% increase in our dividend and the commitment to repurchasing record levels of shares. We look forward to telling you more about how we are building on our accomplishments over the last several years and why we believe Winnebago Industries is well positioned to continue driving value for shareholders at our upcoming Investor Day on November 15th at Lake Lanier Islands in Georgia. We hope to see many of you there in person. Lastly, I want to acknowledge the efforts of our 7,400 plus employees here at Winnebago Industries and thank them immensely for their contributions. Too often, Brian and I get more credit than we deserve as the messengers of our outstanding results. This company and our culture are successful because all our employees care deeply about our end customers, strategic business partners, and each other. We are incredibly privileged to work alongside each of them on a daily basis. Their dedication to excellence and inclusivity is inspiring. We recently saw evidence of this when Winnebago Industries was awarded the Champion of Women Award this month by the RV Women's Alliance. What a great achievement for our team. That concludes our prepared remarks this morning. I will now turn the call back over to the operator. Thank you for your time.

Thank you. To ask a question at this time, you will need to press star 11 on your telephone. We ask that you please limit yourself to one question, one follow-up before returning to the queue.

Please stand by while we compile our Q&A roster.

And our first question comes from the line of Tristan Thomas with BMO. Your line is open. Please go ahead.

Hey, good morning. Two questions. Could you maybe help us quantify the margin kind of bridge for motorized and towables on an adjusted EBITDA basis? Just what the interplay between lower production rates, promos are in return, and then commodity costs and the price increases.

Yeah, good morning, Tristan. This is Brian. I'll take that one. And I'll go into some level of detail here. We had, as I think you know overall, a strong quarter in gross margins at 17.8%. Our segment-level EBITDA margins results were mixed, I'd say. Our motorhome EBITDA margins for the year at 12.5% were very strong, and for the quarter at 13.9% were at record levels. Marine EBITDA margins for the quarter and the year were 14.3%, the strongest across our three segments. AND DEMONSTRATES THE STRENGTH OF OUR BRANDS AND WHY WE HAVE ENTERED THIS SEGMENT THROUGH OUR TWO ACQUISITIONS OF CRISSCRAFT AND MORE RECENTLY BARLETTA. IN THE TOLLABLE SEGMENT, WE HAD RECORD LEVEL MARGINS FOR THE FULL YEAR AT 14.8%, SO WE'RE VERY PLEASED WITH THAT, OBVIOUSLY. THROUGH THIS YEAR, WE SAW EBITDA MARGINS IN EXCESS OF 15% A COUPLE QUARTERS AND EVEN AS HIGH AS 17.2%, AS YOU RECALL IN Q1 OF FISCAL 22. We've talked in past quarters that we've tried to navigate the inflationary pressures with well-timed pricing, and in some cases, that timing didn't always match perfectly within an individual quarter, but that we were managing this equation over a longer period of time, and also with market dynamics in mind, of course. The EBITDA margins for the total segment we saw in the quarter at 10.8% likewise reflected this timing. As we entered fall, we have reinstituted THE TRADITIONAL FALL PROGRAMMING, PRICES, AND THOSE PRACTICES THAT ENCOURAGES DEALERS TO TAKE ON PRODUCT DURING THE SEASONAL LOW PERIODS, AND THIS IS CERTAINLY SOMETHING THAT IMPACTED MARGINS IN Q4, AND WILL HAVE A MORE NORMALIZED IMPACT ON OUR Q1 MARGINS. THE INFLATIONARY IMPACTS FOR THE TOWABLE SEGMENT, INCLUDING SOME HEIGHTENED LOGISTICS COSTS WE ABSORBED, CONTINUE TO BE VERY DYNAMIC, BUT ARE NOW SHOWING SOME STABILIZATION if you look at our cost today as compared to the summer months. Weighing all factors and as dealer inventories normalize and as market dynamics likewise normalize, we believe that over the long term EBITDA margins for the total segment will stabilize at historical levels and our premium brands will continue to deliver EBITDA margins that are industry leading. So, you know, while I didn't give you a breakdown nor do we ever have the impact rather of pricing versus inflation versus other drivers, I think that gives you some additional color to help understand the margins.

Okay. I guess just trying to, I think everyone's trying to figure out how to model margins moving forward. So even if you could just rank order kind of what was the biggest impact this quarter and if we think that's going to stick around?

Yeah, I think it's certainly, as I mentioned, the timing of how this stuff plays across the P&L. You know, it's a very dynamic cost environment right now, and we're going to be really thoughtful about when we institute pricing and what amounts, and then also taking into account our forward view of the cost or inflationary environment as well. And so that certainly factors into our decisions In the short term, you know, we, we clearly we don't manage margins for a quarter. We're managing them much more long term than that. And so I think that that's certainly something that we want to convey as well.

Okay, I'll hop back in the queue. Thank you.

Thank you.

And 1 moment for our next question.

And our next question comes from the line of Scott Stommer with MKM Partners. Your line is open. Please go ahead.

Great. Thanks for taking my questions, guys.

Good morning, Scott.

Can you maybe talk about Open House? Obviously, heading into this event, while we didn't have any the last two years, but a little bit unique. You know, we had an imbalance of lower-priced trailers in the system, and then We had the current pricing environment, but dealers seemingly a little bit reluctant to order 2023 product at these prices. Can you talk about how that dynamic took place a couple of weeks ago and what you saw from an order intake perspective at Open House?

Good morning, Scott. This is Mike. Yeah, I thought we had a really good open house event, and I'll start first and foremost with the quality of the product lines that we showed during open house. In fact, several industry trade magazines in some of their future editions will be awarding many of our brands with some awards concerning the innovative products that we showed at open house. Secondly, we had great discussions. honest discussions with our dealers. You know, open house had not been held since 2019. It was good to see a majority of the country's dealers show back up in Elkhart County and spend time with not only our brands, but I'm sure all of the other OEM brands that displayed. And, you know, anytime you have a chance to spend quality time with one of your customers, you you get the chance to share perspectives and talk about the future in a productive manner. As I said at our very small investor event that morning in Elkhart, our programming and pricing for the 2022 open house was candidly very similar in terms of discounts or promotions as it had been in the past. We stated very clearly that we were not showing up in Elkhart that week to offer steep discounts in order to incentivize dealers to take product that, you know, in some cases they shouldn't take. Especially on the global side, you know, inventory in the field continues to be, you know, at a healthy level. And, you know, while we would love to collect, you know, record-breaking levels of orders at an event like Open House, this was not the year to do that, particularly on the towable side. So our teams walked away with a, you know, a solid amount of orders. But more importantly, you know, we probably walked away with better alignment with our dealers about how we're going to work with them on a daily basis going forward. Open house is an important event. It is not an event where we collect, you know, hypothetically, you know, a majority of the orders for the season. We tend to obviously collect orders for the next several months, hitting into the winter and then the spring, particularly around the latest model year. So I think our teams were pleased overall with the event. We have no problem in terms of communicating with our dealers about their needs. And so we have... the orders we need to keep running the business in a productive and disciplined fashion.

All right, and then just the last question. Assuming you guys stay true to your pricing disciplines and just for the sake of modeling, at least early in the year, could you just give us an indication of towables versus motorized versus marine, what we're running at, production, just so we can have an idea where the numbers need to be?

Yeah, certainly, Scott, I'll talk in terms of relativity. You know, we continue to maintain that our two marine businesses are in the healthiest position, both in terms of industry dynamics and the runway that they have with their dealers. You know, Chris Craft's field inventory is the lowest it's been, candidly, in the time that we've owned the business. We're standing up a new assembly plant in Sarasota. Unfortunately, we saw many of our dealers or customers in southwest Florida you know, have several of their boats, you know, damaged, and so there'll be a benefit in an unfortunate way for those consumers and dealers, you know, down the road for us. You know, the... To market, while it is slowing in macro in terms of retail demand, it continues to be a very strong category for us with our Barletta brand. Barletta, the trailing three-month retail data now has 6.9% market share. That's up 200 basis points over that same mark a year ago. And so we are also introducing in Barletta new product lines both on the lower end and on the highest end. And so the marine segment for us is one where we remain bullish. And it's a segment overall that we will most likely continue to invest in from a BD standpoint in the future. And so you can expect, I think, good margin stability on our marine business for a good portion of the fiscal 23 year. The motorized segment has certainly been working its way back to a field inventory position that is healthier. There are pockets of the motorized RV segment where the dealers still need inventory, and there are candidly some pockets where they're probably reaching where they want to be in terms of a turn level. We continue to see very solid profitability, particularly on the Class B product line. Some of our Class C And I've been very pleased as of late with the way Numar has been running their business on the Class A side in terms of profitability yield as well. So motorized margins will probably settle a bit as field inventory normalizes to a full extent over the course of fiscal year 23. But as we've intimated, we sincerely believe that motorized profitability yield on the bottom line, we'll maintain a double-digit position within our portfolio. Brian, lastly, talked about the towable segment. Timing is the biggest element of what you saw in fourth quarter. We made a very conscious decision to take our fall programs to the market ahead of open house. And that pushed some expense into the month of August specifically. And candidly, as Brian also talked about, the inflation pricing dynamics also played a role just overall in terms of timing. As Brian stated, we believe that total margins will maintain an industry-leading position and that you will likely see them stabilize at historically normal levels, you know, as we travel through the rest of fiscal 23. That will be a gradual development, but, you know, we have confidence that that will happen.

Got it. That's all I have. Thank you.

Thank you. And one moment for our next question, please. And our next question comes from the line of Michael Schwartz with Truist. Your line is open. Please go ahead.

Yeah, hey, good morning, guys. Mike, just wanted to follow up with the last part of your answer to Scott. I think you had said you expect total margins to gradually improve through fiscal 23, and there were some timing issues in the fourth quarter understood. So is that another way of just saying that that's kind of the low point, fourth quarter should be the low point for total margins maybe over the next 12 months or so?

Well, Mike, good morning and thanks for the question. You know, I certainly won't ever commit to what, you know, is either a peak, you know, or a low point. You know, I mean, we've seen enough volatility in the last two, two and a half years with the pandemic, supply chain disruption, inflation, the war in Ukraine, you know, you name it. You know, so I won't commit that, you know, our guardrails are permanent. You know, we believe that, you know, while what you saw in fourth quarter may have been a little bit lower margin than some on the street were anticipating, that it is by no means a sign of deterioration of margins that's going to continue in earnest. So we are seven and a half weeks into our first quarter. Brian and I sit here with a decent understanding of you know, of how the business has performed in those seven weeks, you know, we do not believe, you know, that you're, you know, you're going to see, you know, significant deterioration in the towable margins, you know, in the near term. But, you know, as costs stabilize, as especially the grand design team, you know, works through their opportunities regarding their model year 23, you know, product line, you know, that, that, margin stabilization will will most likely be gradual here you know over over the next one to three quarters um but you know we we we are not panicking about uh total margins to any degree here at winnebago industries okay that's helpful and then maybe just a follow-up quickly on

I think you said the retail outlook for fiscal year 23, and I think some of the parameters you gave would suggest that you're thinking about something maybe similar to what we saw in 2019. Maybe give us, maybe walk through some of your thoughts on maybe how the business has changed in 2019, because I think the comments that you made, people are going to look back at 2019 and say, okay, there's the earnings power. So maybe give us some context of why the business is different today and maybe how we should be thinking about some of the

know the the drivers maybe some of the puts and takes to that 2019 earnings number relative to your 23 outlook yeah thanks mike um you know let me talk with why and how i think the company is different in mid-october of 2022 versus you know candidly probably you know the same month in 2019. first and foremost we've added two pretty significant material businesses probably almost a billion dollars of revenue has been added in terms of acquired businesses. First, starting with Numar, back in the fall of 2019, we added a fantastic brand that has been taking significant share in Class A diesel, Class A gas, and early on here in Super C as well. That business grew in revenue. from fiscal year 22 versus fiscal year 21. And we expect Newmar to be a bigger, more profitable business in the future. It complements the Winnebago line very well in terms of brand positioning, but also product line assortment. The second business we acquired was Barletta. You know, the fastest growing pontoon company, most likely in the history of the pontoon industry, and very candidly, one of the fastest growing marine companies in the industry today as well. And, you know, we had stated at time of acquisition in late August of 2021 what we anticipated that they would do in calendar year 2021 sales. And I can tell you that their fiscal 2022 sales and profits exceeded what they did in calendar 21 in terms of revenue and profits. And that business continues to grow. So the first answer to how are we different is we have two significant new acquisitions. that are headed in the right direction and have significant runway. Secondly, as we've improved the profitability of several of our other businesses organically, not the least of which is Winnebago Branded Motorhomes. Winnebago Branded Motorhomes has seen a profit transformation in the last four or five years at our company through a variety of elements, not the least of which is innovative new product, but also significant work on the operational side to drive inefficiency and waste out. And as I indicated just minutes ago, I think our profitability in that segment is sustainable. And that is dramatically different than three years ago. I would say, lastly, we're gaining share. We had a different level of share in 2019. I think we finished with 9.5% points of share in the RV space at the end of fiscal 2019. We enter fiscal 23 with almost 13 points of share. We had very low share in the marine industry. And in fact, we had zero share of the pontoon market in 2019. And as we sit here today, we have almost 7% on our way to double digit someday. So, you know, all of those combine to make us more resilient, uh, via, um, you know, a diversified set of revenue streams, um, a profitability floor that has been raised. and a runway that we are quite bullish on. So we're proud of fiscal 22. We're proud of the fourth quarter. We recognize there are always nuances in the numbers, but we hit into fiscal 23 competitively, I think, in a good place to manage through whatever the market gives to us.

That's very helpful. Thanks, Mike.

Thank you. And one moment for our next question, please. And our next question comes from the line of Craig Kinison with RW Barrett.

Your line is open. Please go ahead.

Hey, thanks for taking my question. I guess I wanted to ask about RV affordability. Some things you can't control. Interest rates are moving significantly higher, and that increases the monthly cost for your consumer, and I think that's been a pain point in the channel. But, you know, other things that are more within the industry's control would be the dealer margins. and also your cost from a dealer perspective. How are your input costs trending and a like-for-like unit? Might we see any deflationary pressure in some of those categories? And then might we see some dealers offer sharper prices just as competition increases with more inventory in the channel?

Yeah, good morning, Craig. Thanks for your question. I'll speak first to what we're seeing IN TERMS OF SOME OF OUR COST INPUTS. I CERTAINLY WON'T GET INTO SOME OF THE SPECIFICS. THE GOOD NEWS IS ON MANY OF OUR RAW MATERIALS, PARTICULARLY STEEL, ALUMINUM, AND LUMBER, WE HAVE SEEN A SIGNIFICANTLY BETTER ENVIRONMENT OVER THE COURSE OF THE LAST CALENDAR YEAR. STEEL IS CANDIDLY PROBABLY ON you know, sort of the spot market, you know, 50% cheaper than it was at its peak. Aluminum is probably 30% cheaper than it was at its peak. And lumber, candidly, is probably 60%, 65% cheaper than it was at its peak. Now, that doesn't mean that we are always able to acquire those commodities or our suppliers acquire those commodities exactly at the right time to take full advantage of some of those drops. But the reality is the raw material market has definitely improved, and that is going to be of some benefit, I think, to our suppliers, which hopefully trickles to us. We do some vertical integration with those materials, and that should help us as well over time. We are, however, continuing to see some cost pressure in areas where the supply chain is still constricted. motorized chassis is a good example of that because of the semiconductor situation and the automotive capacity limitations in many cases they're putting on themselves you know certain certain types of you know you know component systems you know we have not seen you know sort of the in most cases we've not seen deflation at all from our suppliers but You know, there are still categories where inflation is a little bit higher than we would like on either a sequential basis, quarter to quarter, or year over year. But the environment is getting better. Now, on the flip side, the retail environment is a little tougher. And so, therefore, our pricing power is going to look a little bit differently in fiscal 23 than it did in fiscal 22. I'll comment very carefully on dealer margins. Dealer margins is a topic that we care deeply about. We want dealers to be financially healthy. And candidly, we want our brands, both on the RV and marine side, to be near the top of the list with our dealers in terms of turns and retail, but also profitability by brand. And we think in many cases we are. That being said... you know, dealers, you know, have stated to us and to other sources that they're not operating their business at probably the peak margin status they were in during the height of the retail demand and some of the, you know, the field inventory constraints that they had. In many cases, dealers, though, are operating at levels that we've heard that are closer to pre-COVID levels, so relatively normal historically. The affordability of RVs particularly is something that I think is important generically to the industry. We are often not the opening price point brands in most of our dealers. We tend to be the brands that people step up to. So we pay more attention, most likely, Craig, to the premium price differential that we ask consumers to pay for our brands versus the value brands. Our job is to keep that that gap manageable for consumers to make that step up. So I think dealers are financially healthy right now. They'd like to run their business at slightly higher turns. And we're fine with both those. We want the dealers to be in great position when the winds kind of return behind our sails in the future. Thanks, Mike.

Thank you. And one moment for our next question, please. And our next question comes from the line of Fred Woodman with Wolf Research. Your line is open. Please go ahead.

Hey, guys. Good morning. Could you dig in a little bit more onto the motorized backlogs? Just looks like there was a pretty big sequential change given sort of what you guys booked on the sales side. So was that cancellations? Was that something else that was going on there? Could you just give a bit more?

Yeah. Good morning, Fred. This is Mike. Just as an asterisk as I answer this question, we've always stated that we all need to be careful in terms of backlogs as an indicator of future business. We are comfortable with where our backlogs are today in terms of what we believe our financial performance will be in the future. We are monitoring carefully DEALERS' COMMITMENT TO THOSE ORDERS THAT THEY HAVE WITH US. I WOULD SAY FROM A MOTORHOME PERSPECTIVE, THE DECREASE IS PROBABLY SIMPLY A SIGN OF FIELD INVENTORY GETTING HEALTHIER AND DEALERS MOSTLY SLOWING DOWN THE PLACEMENT OF NEW ORDERS BASED ON EITHER THE RETAIL PACE OF MOTORHOMES TURNING IN THE MARKET OR WHERE THEY'D LIKE TO SET THEIR TURN LEVELS IN THE FUTURE. We have not seen an inordinate amount of units canceled on either motorhomes or towables. We are not immune to dealers either delaying the receipt of committed orders or canceling orders, but it is not something that is epidemic right now at Winnebago Industries with any of our RV brands. There's a little bit of open inventory on our lots, but it is something that we will work through you know, efficiently here over the, you know, coming weeks. So I think the motorhome backlog, candidly, Fred, is, in summary, just a sign of, you know, the field filling and dealers adjusting their appetite to what they see in terms of future retail.

Makes sense. And then, Mike, you had touched on sort of the hurricane impact or potential impact on the marine side, but is that something that you think could have an impact on the RV side as well, either from a replenishment standpoint or maybe housing or not?

Yeah. You know, I think it's too early for us to really make a strong statement about it. Candidly, I don't think Hurricane Ian and sort of the implications of that now are going to be incredibly material to our company. We generally have not been first at the table with organizations like FEMA on trailers or temporary housing. You know, our units are not necessarily constructed for those purposes. Our brands are not positioned to necessarily, you know, be that specific solution. You know, should there be a need for those types of units, I think some of our, you know, lower cost, higher volume competitors are more in line for that. There's no doubt that some of our customers were impacted significantly, first and foremost, through the loss of probably their homes in some cases, or at least major damage. But we have seen pictures of boats and RVs heavily damaged and ending up in places that you could have never imagined because of that storm. So we're going to let the dust settle. Our teams are in contact with our dealers in those areas. And we'll provide our dealers and consumers all the support we can. And there will most likely be a sort of a geographical bump in sales in those categories in that area over the next couple years as people begin to sort of rebuild their lives. So people's passion for the outdoors is pretty strong. And while it's not going to be number one on their list of things to replace, people will want to get back out onto the water or back onto the road. And so we do believe any consumers who lost units, most of them will replace them in the future.

Makes sense.

Thank you, guys.

Thank you. And one moment for our next question, please. And our next question comes from the line of Brett Jordan with Jefferies. Your line is open. Please go ahead.

Hey, good morning, guys. This is Patrick Buckley on for Brett Jordan. Thanks for taking our questions. Yeah, good morning. Morning. I know you've talked about it a bit here, but do you have any additional commentary on the pricing environment moving forward? You know, how have things progressed with conversations with dealers? And have you seen any effects of changes at the retail level? obviously entering a bit of a different environment in the financing environment with higher rates. Have you seen signs of higher down payments, longer loan terms, or a higher portion of cash buyers?

Yeah, good morning. I'll take maybe the first half of that in terms of maybe what we're seeing from a pricing standpoint, and I'll defer to Brian here if he has any comments on the retail or inventory financing side of the equation. You know, I think as I mentioned earlier in one of the earlier questions, we are seeing dealers, you know, be more aggressive in terms of, you know, pricing in the market, particularly on towables. But even in some categories like, you know, Class B vans where, you know, there is, you know, there's significant consumer demand and dealers are fighting for share themselves as well. We don't see that pricing as irrational. you know, by the dealer community. And as I said earlier, I think a lot of their margins have been trending back towards sort of historically normal margins here over the late summer and the fall months. And so, you know, I mentioned earlier as well that our pricing power in fiscal 23 because of softer retail conditions is probably going to be less. But that doesn't mean that if we see meaningful inflation that we will protect our profitability as necessary over the long haul and put pricing in place should we see. I think we're going to be more sensitive, though, to the market and to the timing of those price increases, just given everything our dealers are facing on a daily basis. Brian, any comments on maybe the health of the consumer or financing in general?

Yeah, good morning, Brett. We've always struggled a bit with pinpointing the percentage of those buyers that are cash buyers versus finance buyers because, as you can appreciate, they may often show up with cash in hand from a HELOC or other source of financing. So it's a bit hard to pinpoint. We've not yet heard of any change in that mix of cash buyers versus finance buyers. You know, interest rates are probably anywhere from 200 to 300 points higher on the retail side versus where they had been, you know, over the past couple of years. And still, given the duration also, which has not changed, I think that was another one of your questions, we've not heard of that retail duration of loan changing to a shorter or longer duration, at least at that we've heard yet, you know, still widely available. That is the financing is still widely available on the retail side. And, you know, personal balance sheets remain relatively strong as well. So we think that that will be one of those factors that helps to sustain retail demand, you know, in the near future. So there's some additional perspectives I'd share, but no significant changes really to that financing environment and the retail customer remains pretty healthy from a balance sheet perspective.

Great. Thank you. That's very helpful. And then also, are you guys able to provide an estimate or give any color on inventory that's been built but hasn't been sent to dealer lots? And maybe just sort of relative to where you've historically been, are there any changes in recent inventory levels there?

You know, our inventories are elevated, but not, you know, for reasons in terms of a massive amount of finished goods, you know, sitting on our lot. You know, we continue to manage working capital as best we can. That includes a number of areas, but inventory is certainly a part of that. You know, we manage raw materials, work in process, and finished goods. As I stated earlier with a comment on, you know, open order inventory, we are not sitting with what I would call an excessive amount of inventory on our lots. Some of our businesses are turning it as soon as it comes off the production line. And in some cases, the inventory sits while the dealer and the transportation company work out the best time to take it. So no major areas of concern that I have at this time.

Great. Thank you.

Thank you. And one moment for our next question.

And our next question comes from the line of Martin Matilla with Raymond James. Your line is open. Please go ahead.

Hi, this is Martin. I'm actually here for Joe Altabello, Raymond James. A quick question for you. When it comes to total unit shipments, they were down over 30% year to year, while revenue per unit was up over 30%. Obviously, that's not going to be sustainable. So where do you see price trending in fiscal 2023?

Can I ask a question of clarification? Are you asking about wholesale price from us to our dealers, or are you asking about retail price in the market?

Retail price in the market.

I think you'll see, candidly, a much more stable retail price environment in the next 12 to 14 months, assuming inflation is relatively stable and dealers don't see significant price increases from the OEMs. As we've talked, dealers have begun to be more aggressive on retail pricing on some of the categories already. you know, in light of the market conditions and their inventory. But I think you'll see less volatility in total. I think most of you on the call know this, but over the last 24 months, you've seen in some cases, you know, an increase, you know, of, you know, 30% plus in terms of suggested MSRP for many of these units. Now, the units aren't always sold at MSRP, so now you're starting to see some of the discounts from that happen in the retail environment. But you won't see nearly the, I think, volatility of retail pricing in fiscal and calendar year 23 as we saw in 21 and 22. So I think there will be a little bit more certainty for the consumers. Those consumers who haven't been in the market for three to four years, We'll see some prices that, you know, they're maybe not as used to. But the dealers do a great job of, you know, selling the ROI, you know, in terms of the lifestyle and the economic benefits of being in an RV versus on airplanes and in hotels.

Thank you. My follow-up, actually, would you mind giving a little bit of color to where you expect price trending for wholesale? Sure.

You know, we tend not to provide any forward-looking forecasts in terms of pricing. You know, as I mentioned earlier, the need to price because of lower inflation in our business and our pricing power is different, especially the last fiscal year. But at this time, we won't share any forward-looking comments on intended pricing actions. Okay. Thank you.

Thank you, and one moment for our next question. Our next question comes from the line of James Hardiman with Citi. Your line is open. Please go ahead.

Hey, good morning. So I wanted to circle back to your RVIA guidance commentary. Sounds like you think maybe a little bit lower than what they're looking for in terms of shipments, but I guess more importantly, inline, retail, and wholesale. So I guess my question is, is that a fair way to think about your business over the next year, similar levels of units for wholesale and retail? And maybe if you see big differences between motorized and towables, that would help as well.

Yeah, from an industry perspective, what we stated this morning was for calendar year 2022 on RVs, we think that 500,000 shipment number is possibly attainable. It could come in a little bit under that, but I think, you know, 500,000 is a good target for the calendar year. We do think calendar year 2023, you will see probably somewhere in the range of 400 to 410,000 units shipped to the market. Conversely, we think in calendar 2023 that at a macro level, you'll see a similar number of retailed RV units, you know, somewhere in that range. you know, 400,000-plus range. Now, what that would insinuate is that not a lot of field inventory and macro would be coming out of the field. I think this is a mix or a balance topic. You know, I do think you're going to see some total inventory come out of the market in calendar 23. You'll see a little bit of motorized inventory, you know, be built up. On the marine side, both of our businesses, you know, will probably continue to – you know, very carefully raise inventory levels where they're dealers. Barletta, as an example, has dozens of open markets around the country where we do not have a dealer presence. And so you have to sometimes look at a company's field inventory position in the context of market share, dealer penetration, you know, the momentum of its businesses overall. So I think there's more opportunity for Winnebago Industries to add some inventory than maybe some of our competitors. But we'll see how the next several months go.

That makes sense. And then I'm going to ask a question that I don't think anybody knows the answer to, but I figure I might as well ask here. As we think about this retail slowdown, right, there's sort of two issues at play, right? We had this COVID surge, and maybe there was some demand pull forward there. And so we're seeing the other side of that. but then there are all these macro issues at play. Are you at all able to tease out what's what as we think about this retail slowdown? And I guess the reason I ask the question is I think there's some debate as to whether or not we're looking at sort of a one-year shakeout, right, which would be, I think, consistent with maybe what we've seen in the past 2018-2019 timeframe, where it was sort of an industry right-sizing itself Or versus, you know, 2024, is there sort of more declines to come, which would maybe be more consistent if, in fact, there are macro pressures mounting?

Well, let me be clear. We will operate our business, you know, with a paranoia, you know, that, you know, that headwinds could, you know, last for a little while, but we will certainly hope They don't last very long. Every slight downturn in a cyclical industry has its own different elements and dynamics. This one is no different. This one is different than 2018 and 2019, which I believe was also tied to some industry unit overstocking in the RV world during that period. I think the major pressures we're seeing right now in terms of consumer spending on outdoor recreation is a pressure on discretionary spending capabilities due to higher food costs, gasoline costs, other service costs they might be experiencing. Number two, the inflation of the products themselves in the outdoor rec category that they're looking. And three, we are seeing a meaningful rise in interest rates. Now, interest rates are still historically in a decent spot. But these are products that probably two-thirds of our customers finance over a 15 to 20-month period. And they have seen interest rates in the last nine to 12 months take a meaningful step up. And so they will analyze that in terms of the timing and ability to purchase. So if we can see some of the macroeconomic shifts to help relieve some pressure on any of those variables, our business will most likely recover. Remember, the RV business is generally one of the first industries to see some of the softness in a macroeconomic recession. It's also one of the first businesses to potentially act with optimism when consumers are starting to feel more confident. So we don't have a crystal ball either on the timeline. So we'll manage the business week to week, month to month, and be very prudent, you know, with how we're managing it. But we'll be very well positioned to take advantage of a healthier market when that day comes.

Great. That's some good color on obviously a tough question for all of us. Thank you.

Thank you. And our next question will be in just a moment. And our next question comes from the line of John Haley with North Coast Research. Your line is open. Please go ahead.

Thank you for taking my question. I wanted to kind of switch gears just a bit, thinking about capital allocation. Obviously, you saw the business kind of move in this direction throughout the quarter, and to some degree, you kind of saw this coming. But you were extremely active on the buyback front this quarter. which I feel like is kind of counterintuitive to what I see a lot of companies do. They usually buy their stock back when the business is great. You bought your stock back when business is softening up. How do we think about that for fiscal 23 in the framework of the low 400,000 unit number? Would you expect to be hitting the buyback in the same way you have or Do you pause there, and what are your thoughts about M&A as the industry shakes out a little bit, either on the boat or the RV side of things? Do you step on the accelerator there a little bit?

Good morning, John. This is Brian. I will address that initially here, and if Mike has any follow-up, I'll, of course, leave that to him. We really haven't changed our capital allocation strategy. Even in this past year, we stuck to our strategy. We invested organically. pretty significantly with some capacity expansions that were certainly necessary given the demand on the product. We acquired Barletta, and so we allocated capital to that strategic growth. We maintained our liquidity very nicely. We actually expanded our liquidity with that $350 million ABL. And then we returned cash to shareholders. And so that That was certainly evident in our dividend increase, 50% increase on top of a 50% increase in the prior year. And then as you highlighted in your question, the share repurchase was very much a notable and very intentional use of our cash to get that back to shareholders. So I don't see that changing going forward. We'll continue to look for the strategic growth opportunities, which we believe to still be plentiful. We'll manage our balance sheet very thoughtfully. We will certainly look to return cash to shareholders. We, as you noted, in August announced a $350 million share repurchase authorization that our board approved, and so we'll continue to tap into that as we deem prudent. But I don't see it changing. It hasn't changed this past year. We've very much stuck to our narrative on capital allocation, and we will continue to do so going forward. Share repurchase is a great opportunity for us. We felt and still feel that our shares represent good value, and so that enters into the calculus as we consider when and in what magnitude we go to the market to do share repurchases. That will continue to be the case, but we view going forward that our allocation priorities really will remain as I stated.

Great. Thank you.

Thank you. And one moment for our next question. And our next question comes from the line of Brandon Roll with DA Davidson.

Your line is open. Please go ahead.

Good morning. Thank you for squeezing me in here. Just a follow-up on towable margins. Are you saying that, you know, we shouldn't see a sequential decline from here, or are you expecting to see? a little more stabilization in the first half before settling out in the second half of fiscal year 2023?

Yeah, thanks, Brandon. I guess I'd point to a little bit of history. We've referenced in our prior answers that we expect margins to normalize. If you look back at some of the prior margins or EBITDA margins we've realized in the Tobles business specifically, they have been in that 10, 10.5% range in Previous q1 you know we've mentioned that here in in our fall q4 period that we pulled forward some of the program Discounting for open house that affected the margins in part here in q4 So even in those years previously where we've had ten ten and a half percent margins in q1 we ended the year and that thirteen fourteen percent range and I think that that's the message we're trying to convey here is hey look it's one quarter and We still have a lot of confidence in our product line and the strength of our portfolio to deliver in that 13%, 14% EBITDA margin range for the tollables business over the long term. And we don't necessarily view our calendar year 2023 any differently sitting here today. It's a very volatile environment we're dealing with in terms of the inflationary pressures, the cost. Mike cited some of the commodity volatility and a lot of which are coming down here as one of those factors, and we're trying to weigh the forward view of costs and what's going on as it relates to our cost input and the impact that that has on our near-term pricing decisions. So very clearly, we're not managing the quarters. We always have our eyes on the quarters, certainly, and believe that we're doing our best to manage within a quarter, but that's not how we make decisions. We make decisions for the long term and what we think is best for the portfolio. So I guess that hopefully that additional color and just helping all of you recall the margins that we've had in the fall periods in past years while still delivering very healthy margins in the total segment for the full fiscal year.

Great. And just one quick follow-up. On your retail guidance for next year kind of implies down 10%. You know, kind of where do you see your brand shaking out versus the industry? Do you feel like you'll be able to outpace the market by 10, 15 percentage points or your brand's kind of trending in line with that guidance?

Brandon, this is Mike. I would answer that with this phrase. You know, the standard is the standard here. You know, we have been taking share consistently over the last, you know, six to seven years in the RV business. we've acquired brands and then or grown them organically after they're in our portfolio and we expect to continue to do that we're well aware of the competitive landscape and but the expectations at Winnebago industries is for each of our five brands to take share in their respective outdoor categories and so some years that will be more some years that will be less but the the expectation is similar year to year. I can tell you, and I usually do this each call, retail through the first part of the first quarter is relatively stable versus what we saw at the end of Q4, and in fact has been trending a little healthier from a comp percentage standpoint. And so we're not seeing in some of our latest retail results on the RV side specifically a comp percentage decline that is as steep as it was in the July-August months. And so that's a little bit of a factor of the comparatives getting a little bit easier. But this industry... If this industry retails 400,000 units in calendar year 2023, which is our current estimate as of this date, that's a healthy amount of consumer retail historically in this space, and especially in a post-COVID environment. So we'll compete for everything we can get.

Great. Thank you.

Thank you. And one moment for our next question. And our next question is a follow-up question from Tristan Thomas Martin with BMO. Your line is open. Please go ahead.

I thought I hopped out. Everything I was going to ask has been answered. Thanks, guys. Thanks, Tristan.

Thank you, and I'm showing no further questions at this time, and I would like to hand the conference back over to Ray Posadas for any further remarks.

Thank you, everyone, for joining today's call. Enjoy.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.