Amid soft demand for RVs and motor homes, Thor Industries decides to buy back shares
- The RV manufacturer believes the stock price doesn’t fully reflect the Fortune 500 company’s true value and authorized purchasing stock back through the end of July 2027. CEO Bob Martin said the move is a ‘testament to our ability to generate cash even in tougher markets’.
Thor Industries will buy back stock amid an ongoing industry slump, expressing its view equity markets are not properly valuing the world’s largest manufacturer of recreational vehicles.
On Tuesday, the company said its board authorized a program to purchase up to $400 million worth of shares over the next 25 months expiring at the end of July 2027. The move comes amid a marked underperformance versus the broader equity market, with Thor Industries dropping 9% since the start of this year versus a 3.7% gain in the S&P 500 benchmark index.
Chief Executive Bob Martin said the decision reflects its commitment to enhancing shareholder value as well as its financial discipline.
“Our ability to repurchase this volume of shares is a testament to our ability to generate cash even in tougher markets,” Martin said in a statement.
Thor is forecasting wholesale RV shipments between 320,400 and 337,000 for the industry, which would likely mean a decline over the 333,733 towable and motorized vehicles achieved last year. At present the company expects little relief for 2026, when tariffs start to be felt more acutely by customers.
Steel and aluminum tariffs bite
The RV market has been mired with too much inventory relative to soft demand; higher costs from steel and aluminum tariffs; as well as warranty costs stemming from manufacturing quality problems covered this week by the Wall Street Journal.
On Wednesday, competitor Winnebago Industries cut its financial guidance for the second straight quarter, further trimming its revenue forecast but more importantly slashing its fiscal full year profit target to the bone.
Instead of the $2.40 to $3.90 earnings per share it saw originally, or even the $2.10-$3.10 it most recently anticipated, it now expect EPS of just $0.50-1.00 for the fiscal year to end-August.
Thor Industries was founded in 1980, when two entrepreneurs acquired Airstream, the manufacturer of towable trailers best know for their distinctive bullet shape and polished aluminum bodies popular in the vintage 50s aesthetic. Through a series of domestic and cross border acquisitions, the company rose to become the world’s largest RV manufacturer.
“As we look ahead, we will continue to be buyers of our stock as long as its price is disconnected with our long-term value proposition, underscoring our confident in the strength of our company and the potential for future growth,” CEO Martin said.
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