Welcome to Winnebago Industries Q4 and Fiscal 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Raymond Posadas, Vice President of Investor Relations and Market Intelligence. Please go ahead, sir.

Thank you, Tawanda. Good morning, everyone, and thank you for joining us to discuss our fiscal 2025 fourth quarter and full year earnings results. 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 released with our fourth quarter and fiscal 2025 results was issued and posted to our website earlier this morning. Please note that the earnings slide deck that follows along with our prepared remarks is also available on the investor section of our website under quarterly results. Turning to slide two, 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 the actual results to differ materially from these statements. These factors are identified in our SEC filings, which we encourage you to read. In addition, on today's call, management will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures are available in our earnings press release. One additional housekeeping item. Beginning with our Q4 and full year 2025 results, we are transitioning our segment profitability measure from adjusted EBITDA to operating income. To assist with modeling, our investor supplement provides a table detailing segment quarterly operating income, along with depreciation and amortization for fiscal 2025 and 2024. It should be noted that operating income at the segment level excludes both interest expense and tax expense, which is held at the corporate level. Please turn to slide three. Joining me on today's call are Michael Happy, President and Chief Executive Officer of Winnebago Industries, and Brian Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our Q4 performance. Brian will then discuss the associated drivers of our financial results, in addition to sharing our forward view of the market and our fiscal year 2026 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions. With that, please turn to

slide four as I hand the call over to Mike. Thanks, Ray, and good morning, everyone. On our Q3 call in June, I spoke with you about the importance of staying focused on the areas of the business within our control. As I reflect on our fourth quarter performance, the entire Winnebago Industries team has reasons to be proud. We ended a challenging fiscal year with a strong fourth quarter that reflects the resilience of our team and the strength of our diversified portfolio. Our results also demonstrate the progress of the strategic actions we've taken to begin transforming our Winnebago-branded RV businesses, complementing our healthy stable of industry-leading brands. These initiatives and others across the enterprise enabled us to return to positive operating cash flow in the quarter, improve working capital, and meaningfully reduce our net leverage ratio. We generated adjusted diluted earnings per share of 71 cents on net revenues of $777.3 million. Momentum across brands and product lines more than offset operating margin pressure from the ongoing turnaround at our Winnebago-branded businesses. Our improved Q4 performance enabled us to achieve the high end of our revised 2025 financial guidance. Driving our growth in Q4 were standout motorized RV products like Numar's Class A Summit Air and Grand Design's Lineage Series M, which is rapidly gaining momentum in the Class C diesel category. On the towable side, the affordable Grand Design Transcend series is resonating with new consumers to the RV lifestyle. We also continue to see a strong performance in our marine segment from multiple Barletta products, including the Aria, which have become the definition of affordable luxury in the aluminum pontoon segment. Turning to key RV trends on slide 5, following a brief uptick earlier in the summer, RV retail registrations declined in August. On a trailing three-month basis, retail demand remained stable and dealer inventories continued to improve. This environment is contributing to a healthier channel, even as monthly results remain variable. From a wholesale perspective, total RV shipments declined low single digits in August. The industry continues to demonstrate discipline, with manufacturers closely aligning shipments with retail demand. As we move through the remainder of calendar 2025, we expect dealers to remain selective in restocking, supporting channel stability in the offseason. We now expect wholesale RV shipments in the range of 320,000 to 340,000 units for calendar 2025, or a median of 330,000 units. For calendar 2026, we are estimating wholesale RV shipments of 315,000 to 345,000 units. Our production strategy centers on discipline planning and execution, enabling us to align output with market conditions. Our inventory turn rate of 1.9 times at the end of Q4 reflects seasonal dynamics and dealer demand. While we're targeting a higher turns over time to support operational efficiency and steady growth, We recognize that dealer behavior and market conditions ultimately drive those turns. Our strategy remains focused on maintaining a prudent, demand-driven approach. On slide six, our continued momentum in our core RV market segments underscores our strategic focus, product innovation, and deep customer engagement. Shown on this slide are some of our current success stories that our team here has every right to be very proud of. Numar's Dutch Star continues to be the number one brand in the Class A diesel category, a position it has held since 2021. In Class B, three Winnebago brands, Solus, Travato, and Rebel, have led all models in that category for the past five consecutive years. We also continue to win in Class C Diesel. The Winnebago Echo is currently the number one selling brand in this class. And while not shown on the slide, the Winnebago View is the second selling brand in that class. Additionally, in just its first full year on the market, the Lineage Series M has become the number three brand in the Class C diesel market for the August trailing three and trailing six-month periods. And a recent ad is the emerging Grand Design Transcend, which advanced three spots versus last year to the number eight position of the highly competitive travel trailer category, joining the Grand Design Imagine in the top ten. And finally, the Grand Design Momentum holds the number one position in both the fifth wheel and travel trailer toy hauler segments. Moving to the marine segment on slide 7, Barletta and Chris Craft have done an exceptional job managing inventory, building dealer relationships, and creating an outstanding boating experience for consumers. This discipline and customer-centric approach has enabled both brands to maintain strong performance despite significant industry headwinds. For the trailing 12 months ended August 31st, Barletta increased its market share 20 basis points to 9%. The brand's dealer network called Model Year 26 the best top-to-bottom product launch in Barletta's history, including new features, design elements, and technology updates. Now, turning to slide eight, in order to deliver a successful fiscal year 2026, we are focused on executional drivers that directly contribute volume, share, and profitability. We expect our Winnebago-branded motorhomes business to benefit from new product introductions, like the recently launched Class C Sunflyer, alongside stronger dealer partnerships and improved operational efficiency. We are positioning the Winnebago-branded travel trailer business for growth as well through innovative products, a revitalized dealer channel, and operational leverage. In addition, we expect to see the Grand Design Motorhomes business continue to capture share as a result of new products, continued dealer momentum, and strong, growing brand loyalty. Grand Design towables will drive share gains and profitability through continued quality enhancements and product innovations like its new foundation, the brand's first destination trailer. Numar and Barletta will contribute selective share gains and profit stability through sharper price points and competitive new offerings. We are also focused on a multitude of operational initiatives across manufacturing optimization, vertical integration, capacity utilization, sourcing coordination, quality improvement, and working capital management, all of which will further strengthen profitability and cash flow in fiscal year 26. I'll now turn the call over to Brian Hughes for the financial review.

Thank you, Mike. Good morning, everyone. Starting on slide nine, higher consolidated net revenues were primarily driven by favorable product mix and targeted price increases, partially offset by higher discounts and allowances. In aggregate, volumes across our portfolio were roughly flat versus the prior year's fourth quarter. Consolidated gross profit increased on the higher revenues, although gross margin declined primarily due to costs associated with the ongoing transformation of the Winnebago-branded businesses, partially offset by targeted price increases. adjusted EBITDA increased 33.1% year-over-year. Consolidated operating income also improved significantly from the fourth quarter of fiscal 2024, which was impacted by an impairment charge we took against the Chris Craft goodwill. Adjusted EPS of 71 cents was up two and a half times from the prior year fourth quarter. Turning to our tollable RV segment results results on slide 10. Revenue, as anticipated, was down slightly year-over-year, reflecting a mixed shift toward a more value-oriented consumer and driving higher volumes in products such as our Grand Design Transcend series. Targeted price increases and improved operating efficiencies within our Winnebago Tollbos business drove a 210 basis point increase in operating income margin, outweighing higher warranty experience and slight de-leverage on the lower sales. As shown on slide 11, double-digit, top-line growth in the motorhome RV segment was powered by higher unit volume and favorable mix, driven by the continued ramp-up of Grand Design RV's motorized lineage lineup, as well as stronger quarter from Newmar. This growth was partially offset by higher discounts and allowances versus last year in the Winnebago-branded motorhome business. On the margin side, improved volume leverage and lower warranty expense partly offset costs associated with the ongoing transformation of the Winnebago-branded motorhome business and higher discounts and allowances. As part of this ongoing transformation, we took decisive action in Q4 to dramatically reduce production schedules and consolidate the brand's manufacturing footprint by closing two of our four Winnebago Motorhome manufacturing locations in Northern Iowa. While this had a meaningful negative impact to our operating income and our yield, on the positive side it drove significant cash conversion in the quarter. As shown on slide 12, our marine segment continues to perform well. Net revenues were up double digits from a year earlier on higher unit volume and targeted price increases. Both Chris Craft and Barletta have done an outstanding job managing production in a cautious retail environment. From a profitability standpoint, the year-over-year margin improvement largely reflects the prior year goodwill impairment as well as volume leverage and price increases on model year 26 products. While we are pleased with our performance, unit sales across the marine industry continue to show soft trends. Turning to balance sheet highlights on slide 13, we sharply reduced accounts receivable and inventories to improve working capital between the end of the third quarter and year-end. This resulted in $181.4 million in cash from operations in Q4 and when combined with a 33% year-over-year improvement in adjusted EBITDA contributed to a net leverage ratio of 3.1 at the end of the year, a substantial improvement from our 4.8 net leverage ratio at the end of third quarter. For fiscal 2025 we We returned $88.9 million to our shareholders, consisting of $50 million in share repurchases and $38.9 million in dividends. Our $0.35 per share cash dividend paid on September 24 marked our 45th consecutive quarterly dividend payment. This underscores our commitment to creating shareholder value and our confidence in the future of the business. Importantly, while not highlighted on this page, we also repaid $159 million of debt during the past year. We remain committed to our targeted range for net leverage, and we will continue to prioritize improvements to growth and net leverage in the near term. On slide 14, let me update you on our tariff mitigation initiatives in Fiscal 26. As we enter Fiscal 26, our proactive strategies to address ongoing tariff challenges remain front and center. Over the past year, we've strengthened supplier engagement, tracking policy shifts, reassessing sourcing, and prioritizing high-duty materials. Our sourcing and engineering teams have diversified supply routes, identified alternate vendors, redesign bills of materials to enhance supply chain agility. Looking ahead, we are assessing the tariff structure and the rates and their impacts on us going forward. We remain vigilant and adaptable and will continue to provide timely insights as market and trade conditions evolve. Turning to our fiscal 2026 outlook on slide 15, based on the current market environment our expectations for North American RV wholesale shipments of 315,000 to 345,000 units in calendar year 2026, we expect consolidated net revenues in the range of $2.75 billion to $2.95 billion, reported earnings per diluted share of $1.25 to $1.95, and adjusted earnings per diluted share of $2 to $2.70. The midpoint of $2.35 represents an increase of 41% from our fiscal year 2025 results. Our outlook takes into account prevailing trends in the RV sector, including competitive dynamics, shifts in consumer preferences, key macroeconomic factors that may influence overall demand, and current trade policy positions and tariff rates, with the exception being the most recent 100% additional tariffs that were the Administration's reaction to rare earth mineral restrictions threatened by China. We have held that risk aside for now, pending the upcoming scheduled talks between the US and China. All of these factors remain dynamic, and we will continue to provide further updates to our expectations as we progress through the year. Let me share a couple of additional data points to help frame the business trajectory for fiscal 2026. First, as it relates to our sales growth, we are not building in or counting on an improvement to retail units sold in the industry, as mentioned earlier. Instead, we expect growth in our portfolio to be driven in part by healthy growth in the motorhome RV segment due to the success of the Grand Design RV Motorhome's expanded Lineage lineup. Lineage has seen exceptionally strong dealer and end consumer demand to date, which gives us tremendous confidence in the success of this portfolio. We look for flat to modest low single digit growth in the towable RV segment. The marine segment is expected to produce a decline in sales due to continuing soft retail trends in that part of the market. As we continue executing on our margin improvement initiatives, we expect to deliver meaningful annualized cost savings. These savings are driven by targeted operational actions including footprint optimization, supply chain enhancements, and strategic workforce alignment that are already underway and will continue to generate meaningful efficiencies. Specifically, we expect operating income margin in the motorhome RV segment to improve to low single digits for Fiscal 2026 from negative 0.6% in Fiscal 2025. This expectation reflects both the impact of our enterprise-wide margin improvement initiatives and the focused margin recapture efforts within our Winnebago-branded motorhomes business, including a targeted and refreshed product line, cost structure optimization, most of which has already been executed during the fourth quarter of our fiscal 2025, the footprint consolidation that has also already been accomplished, focused mix improvements, and other cost efficiencies. From a capital allocation perspective, we are aiming for a net leverage ratio approximating two times by the end of fiscal 2026. This remains a strategic priority in the coming year. Now, please turn to slide 16 as I hand the call back to Mike for his closing comments.

Thanks, Brian. In closing, we ended the year with a strong fourth quarter, delivering solid results across revenue, profitability, and cash flow, a testament to the strength of our diversified portfolio and disciplined execution. We're energized by the momentum building across our enterprise. The strategic actions we're taking to revitalize the Winnebago motorhome and towables lineup, align operations with market demand, and streamline our cost structure are beginning to generate a meaningful improvement to results. We're seeing the early stages of what we believe will become a powerful flywheel effect. Great products attracting top-tier dealers, stronger retail performance reinforcing brand strength, and renewed energy across our distribution network. After all, Winnebago remains the most recognized brand in the entire RV industry. Across our outdoor portfolio, the trends are encouraging. Grand Design Motorized is off to an outstanding start in its first full year. Newmar continues to lead in core motorized Class A segments. And Grand Design Towables is expanding with new offerings that balance quality and affordability. Our marine brands, Crisscraft and Barletta, remain pillars of innovation and premium customer experiences. As we look ahead to fiscal 2026, our optimism is grounded in execution, not assumptions about market recovery. With a strong foundation in place, we expect a cadence of improvement to accelerate through the year as we continue to execute on our strategic initiatives. Now, Brian and I are happy to take your questions this morning. Operator, please open the line for the Q&A session.

Thank you. Ladies and gentlemen, to ask the question, please press star 1-1 on your telephone, then wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Scott Stember with Roth. Your line is open.

Good morning. Thanks for taking my questions.

Good morning, Scott.

Maybe we can dig into tariffs a little. Last quarter, you guys had talked about some unmitigated expense in that 50 to 75 cents worth of EPS range, and it sounds like there's still a lot of variability, at least within your guidance. Can you talk about how much or where the unmitigated portion is? Is it at the lower end of your guidance, or maybe just frame out what that number is?

Scott, good morning. Brian, thanks for the question. As we had indicated at our Open House Investor event, this morning's guidance does include what we currently anticipate to be the full impact of tariffs on our business performance in the next 12 months. As Brian highlighted in his comments, The tariff subject continues to be very dynamic, and there certainly could be changes in the tariff environment in the future. And as those happen, we will certainly continue to keep the investor community updated as to the relevance and the impact on our business. But we chose for this morning's purpose of providing fiscal 26 guidance to include the full impact in the guidance. So we won't be calling out this morning a specific number for tariffs in terms of the net impact to the business. But our teams continue to do an outstanding job of finding avenues to mitigate the tariff exposure. And as we also indicated in our Q4 commentary, we have made difficult decisions to do some disciplined pricing actions as well to cover some of those costs where we believe the market can take that. But the tariff environment continues to be very dynamic, and we imagine it will remain that way throughout the year. But we think we've built muscles and processes to mitigate that subject as effectively as most of our competitors are doing.

Got it. And last question on the cadence of guidance. I know you touched on it briefly. A lot of stuff going on, you know, retail, back and forth, and we're coming out of the, you know, some of the actions that Winnebago motorized, but can you just maybe help us for modeling purposes, maybe a little bit more granular, what we should be looking at near term in the quarters ahead versus maybe the first half versus the back half of the year?

Pat, I'll comment and then ask Brian to provide certainly more substance. You know, many of our fiscal years tend to be a bit back half loaded in terms of profit generation in Q3 and Q4, especially. Fiscal 26 will be similar in that regard. You know, we do believe that we'll be able to get off to a better start in the first half of the year than we had a year ago. But a majority of the upside will likely happen in the back six months of the year. I do want to reiterate, and we stated it on the call, that our assumptions for fiscal 26 are based on a relatively flattish retail and wholesale shipment environment. And so we believe most of the opportunity to drive stronger results in fiscal 26 is really a result of actions that we can control. And some of the very difficult decisions we made in fiscal 25, we believe that we are in a better position in fiscal 26 to drive the business forward, especially on the bottom line. Brian, what would you add?

Not much more than that, Mike. I guess the only other add that I would have is that we do expect each quarter to show improvement year-over-year at this stage. That's the additional color I would provide.

Got it. That's all I have for now.

Thank you. Our next question comes from the line of James Hardiman with Citi. Your line is open.

Hey, good morning. So I wanted to dig into the guidance a little bit. Let's start with the industry numbers. So I'm having a tough time getting the sort of full year shipment numbers to foot. I guess, what are your assumptions for retail for 25 and 26? I think you said slattish for 26, but where do you expect that to finish in 2025? It seems like based on your wholesale assumption that we're still going to be looking at a pretty meaningful inventory reduction at the industry level in 25. Is that right?

James, I think that assumption is right. When we started both fiscal but also calendar year 25, I think there was certainly stronger optimism amongst the industry participants that we had finished most of the destocking from the prior two or three years, 2022 through 24. But that, in fact, was not the case. And, you know, retail in calendar 25 did not show itself to the degree that I think, again, everybody in the industry would have liked. And dealers continued to be disciplined in how they managed, obviously, their inventory, both in terms of quality and quantity. For our fiscal 26-year and calendar 26-year as well, we really aren't anticipating a significant increase in dealer inventory. We think in many of our categories that we are near a situation where the industry can ship at a one-to-one level. I would say that there are pockets of the motorhome category where that may not be the case, and we are watching the pontoon segment very carefully from the marine side. So I think your characterization of 25 is correct, is that there's potentially a little bit more destocking than we had anticipated. We are not necessarily building in significant destocking into our assumptions in 26, but as Brian noted, the category we're probably watching the closest is some weakness in the marine space as dealers continue to probably have slightly elevated inventory on pontoons that they're managing downward.

That makes sense. But then I guess if, you know, putting Marine aside for a second, if I just think about a 2025 in which there was significant de-stock and then a 2026 where, you know, if we assume sort of one-to-one wholesale to retail, that would seem to suggest material growth in wholesale if retail is in fact flat. And so help me sort of understand, you know, like RVIA, for example, has a has a meaningfully higher shipment number at their midpoint. I just want to make sure I'm not missing something. And maybe maybe one way to talk about it is in the context of your business. I think you finished that one point nine turns for the fiscal year. Do you expect that number to go higher next year?

how should I think about that? I would tell you that we're striving for two turns in all of our businesses and brands. We've got some of our businesses and product segments. We're a little further away from that than we'd like. But in a couple other segments, I think we're almost right on top of that number. So there may be places, James, where we undership the market a bit with the ambition of pursuing that turns goal. But there'll be other parts of our business that just have natural momentum in terms of the strategies we're executing. Grand Design Motorized, Winnebago Towables are two that come to mind. Again, I would tell you that I think For calendar year 2026, we anticipate that both for the RV business, that industry retail and industry wholesale can potentially be around that 330,000 unit mark. That's roughly the midpoint of our 315 to 345 forecast. And that being said, over the course of those 12 months, you would not see significant dealer de-stocking in the RV industry. So, you know, we've got that modeled, you know, in a detailed fashion within our business for planning purposes. But at the end of the day, we think 330,000 units for calendar year 26 is a reasonable assumption for us to use for planning purposes. If the market's healthier, fantastic. If it's a little softer, we still believe we have the levers within the business to be able to generate profitability in the guidance range that we

offered this morning. Okay. And just, sorry, just to put a finer point on it, if 330 is the expectation for wholesale and retail next year, what do you have penciled in for retail this year? Because at least based on my numbers, that would suggest a much bigger decline than where we've been year to date. Do you expect the last, I don't know, four or five months of the year to be down significantly in terms of retail? Or is my math off here somewhere? Thanks.

Well, we don't know what retail will be, obviously, for sure in the last several months. Obviously, the gross number for August was a little bit higher than the industry had hoped it would be, but we think that net number will settle, you know, settle in a little bit more healthy place. It would not surprise us to see retail in the remaining months of the calendar year be, you know, be down, you know, slightly, you know, in that low, you know, to mid-single-digit range. But the variability of the industry is difficult to forecast, you know, right now. So I'm not trying to evade an answer, James, here. It's just really, really hard to forecast either over an extended period of time, but also to know what, you know, month to month the industry is going to give us. And so we are focused on our business, trying to drive our turns to as close to 2.0 as we can. We believe we have share gain opportunities in multiple spots within our portfolio, Grand Design Motorized, Winnebago Towables, Barletta, Pontoons, travel trailers on the Grand Design side. And so regardless of what the market gives us, you know, we believe we can deliver within the numbers for fiscal 26 that were offered today.

Got it. That's really helpful. Thanks, guys.

Thank you. Please stand by for our next question. Our next question comes from the line of Craig Kennison with Baird. Your line is open.

Hey, good morning. Thanks for taking my question. I had a question around market share. You've had a really good story in the last five years with respect to market share in RVs and in marine, But at least in RVs, it appeared to take a step back in fiscal 2025, and that's probably due to a mixed shift favoring some low-end units where you just don't play aggressively. I guess I'm wondering, you know, what's your view on market share trends for your brands, especially if this trend towards low-end RV units persists?

Yeah, good morning, Craig. The most significant areas of pressure in the RV industry for us from a market share perspective have been the Class B category in motorhomes and some fifth-wheel retail share pressure we've also seen on the towable side. And I think those are due to similar but different reasons. winnebago the winnebago brand of vans has long been the industry leader both in terms of volume but also in terms of of innovation and in our comments this morning we did mention that we continue to have the top three performing singular product brands in the class b segment but the reality is that that segment has gotten incredibly crowded over the last three or four years. Literally, there has been an explosion of brands and floor plans in that space and, candidly, dealer distribution points. And almost by the default of math, with us only having one brand in Class B vans until recently with Grand Design's launch. And us having primarily one distribution network under that one brand, the explosion of competition there really mathematically has pressured our share. But we continue to make the best product in that segment without a doubt. On the fifth wheel side, that has been a combination of new competition that we've over the last three or four years, and some very competitive offerings from those competitors, along with some shifts in price point attractiveness from some of our higher volume competitors in the industry. Our fiscal 26 plans have us stabilizing volume in the RV market and slightly growing it for that particular fiscal year. And again, the two primary drivers are going to be Grand Design Motorized and the second year of their launch and some of the significant retail momentum continuing that we're seeing. And we intend to make meaningful strides on Winnebago toll bulls as well in fiscal year 26. We had the strongest dealer ordering open house for that particular business that we've ever had in September. and we feel well positioned to grow share in that space. We'll also see some share gains, we believe, continue in Class A Diesel with Numar and Grand Design Towables as we continue to work on the imagined and transcend lines within that particular brand. So we're well aware, Craig, certainly, as you stated, of some of the dilution in share here recently, But we believe we have plans in place to stabilize that and even in spots to strengthen our share in certain areas.

Thank you, Mike. And I wondered if you would also just compare the RV consumer versus the marine consumer today and then how those dealer bodies view the market differently.

Well, the RV consumer, candidly, is probably younger and more diversified in terms of a consumer base, and we think that has been helpful, even though, obviously, the RV industry has seen a significant volume pullback here in the last couple years. You know, I think the industry as a whole has done a good job attracting consumers from all walks of life and keeping the products as affordable as possible, given some of the cost pressures we've seen, to make sure that younger consumers are still participating in the lifestyle. The marine industry has some work to do, candidly, in that area. As an industry, we need to work within boating to bring the average age of the consumer down and get younger generations not only in the lifestyle, but candidly owning more boats. And the diversity has been moving in the right direction. We continue to believe that the marine industry is a little bit further behind the RV industry in terms of the cycle. You know, Craig, I think even your recent report cited that many of the marine dealers feel they still have too much inventory. And we agree with that. And we're working closely with our dealers to try to right size, you know, our particular inventory positions. We think we're in pretty good shape. But by and large, we think the marine consumer is a little bit more hesitant than the RV consumer right now. And the dealers are also probably more focused on de-stocking in many of those categories, even more so than the RV dealers have been lately. But we believe our brands are positioned well. I'm optimistic that our Barletta pontoon business especially will continue to unveil new strategies in the future to remain very competitive and continue to take share. And again, I think you can tell from us this morning that the theme of fiscal year 26 for us is control what we can control. And we believe we have a number of actions and strategies in place to, again, deliver the results that we foreshadowed this morning.

That's helpful. Thanks a lot, Mike. Thank you. Please stand by for our next question. Our next question comes from the line of Joe Alcibello with Raymond James. Your line is open.

thanks hey guys good morning um mike that was actually a good segue into my question but if we think about the guidance for 26 and i think at the midpoint it implies about 70 cents of earnings improvement call it um you know based on my math the improvement in the motorhome margins is all of that and then some so i guess my first question there is you know how much how much visibility or line of sight do you have into those cost improvements for this year brian i'll have you

would take that one. Yeah, sure. You know, I made some of the comments, Joe, in the script as it relates to the Winnebago Motorhome business in particular. A lot of the cost actions have already been taken in Q4 as it relates to some of our cost structure, both in cost of goods and in our SG&A. And then it is likewise related to product, as I mentioned, and having a product line and as well as a finished goods position that doesn't require the same level of incentives that were required here in 2025 fiscal. So those are the two biggest areas of improvement that we're expecting, some of which, as I mentioned, have already been executed. So we've got good visibility into it. We'll be tracking it very closely. Most importantly, I think, Joe, we've got the right team in place there, the right leadership. They're highly engaged. We sense a great improvement in culture and motivation of the team, and so we think we've got the right team in place to execute.

Very helpful. Is there pricing involved here, too, particularly with tariffs?

Yeah, you know, pricing is some of the story, but that really is an offset to the increased cost, as you referenced, as it pertains to tariffs. So I wouldn't call that out as a margin improvement in terms of pricing through tariffs. I think it's more the better position product lineup and the reduction in the incentives that are required.

Got it. And maybe one quick one for Mike, if I could. I mean, if we think about sort of a big picture view of the industry, you know, the assumption of mid-cycle, I think, on the RV side has always been around, you know, call it 425,000, 450,000 units. You know, given where we've been the last three or four years, do you still think that's a good mid-cycle estimate? Joe, we're working on that model as

we speak, and it's likely here in the relative near future that we'll find an opportunity to share an updated mid-cycle model for Winnebago Industries with you. Specific to your question, I think you'll see in our next version of that mid-cycle model that we believe that the RV mid-cycle volume estimate specifically will be lower than what we offered last. It will probably be somewhere in that 400,000 to 425 range. We may choose to be even more specific when we release that. And that's just a byproduct, I think, of the reality that this trough in this particular down cycle has lasted longer than most of us have experienced in our careers in this industry, but also we believe the next peak may be a little lower than what we had been previously modeling. I do want to say this, though. The Winnebago industry's portfolio in its entirety has really not seen a mid-cycle environment yet. The acquisition of Numar in 2019, the acquisition of Barletta in 2021, and then the acquisition of Lithionics in 2023, plus new strategies of Grand Design Motorized and now even Winnebago Towables, as an example, being renovated. We believe we have a portfolio that really hasn't seen its full potential realized in a mid-cycle environment. And we hope that day comes someday. We can't predict the exact year when that will happen. But we're really excited about getting some tailwinds from a market stability standpoint, because we believe these five OEM brands and then our lithium-ionics business from a strategic technology vertical can really start to show some significant performance upside in the future. But stay tuned, Joe. We'll come back to you all shortly with an update on that topic.

Sounds good. Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Brett Jordan with Jeffries. Your line is open.

Hey, good morning, guys. This is Patrick Buckley on for Brett. Thanks for taking our questions. could you talk a bit more about uh any takeaways from the the rv open house uh anything notable as far as recent retail demand or year of year sales trends and i guess how did that general sentiment from the open house factor in the 26 outlook patrick good morning thanks for being

with us uh we thought the september open house in elkhart was a good event as it normally is attendance from the dealer community was very strong. I thought the engagement from the OEM and supply side was also fantastic. We have to answer that question almost brand by brand and given the state of our different businesses, but we were really pleased with dealer engagement on each of our three RV brands. It's not a huge order writing show for our Newmar business, just the rhythm of how we take orders in that business and work with the dealers you know that's a show at at newmar that is more about showing some of the latest products some of the uh some of the the beds or in the cab on some of the super seas were exciting there but not a huge order writing show however on the grand design uh and winnebago brands it is a meaningful order writing show and we were we were pleased with the orders that we took on on both grand design and winnebago and as i've already mentioned this morning on the call So, Winnebago Toables was a record-setting, order-taking event at Open House. And, obviously, Grand Design Motorized being a new business still going into its second full year, we saw good activity and reception there. So, Grand Design Toables continues to be a large business for us, our largest single revenue stream. We were pleased with the reception, too, especially the travel trailer segment there, the work we've done at Imagine and Transcend, the unveiling of the foundation destination trailer. And then, as Brian just recently mentioned, our Winnebago Motorhome team really has a lot of cultural momentum right now. We unveiled our Sunflyer affordable Class C product in Elkhart that month to very strong reviews, took a number of good orders on that, and really just more importantly, validated with the dealers around the Winnebago Motorhome brand that we're coming. that this business is headed in a stronger direction and that now is the time for many of them to get on board and support that business. So all in all, a really good show. Recent retail trends have been very similar to what you guys have public access to Visa SSI. We're seven or eight weeks into our fiscal year already, so we've got a decent amount of retail underneath us for Q1. Retail trends are similar to what you've seen in the July-August months, you know, some weeks are good and some weeks are a little weaker. And collectively, I wouldn't say that there's been a significant change in retail momentum, you know, up or down in the first month and a half of our fiscal 26 years. So again, it goes back to the theme of we're assuming the market will be flat and we believe we have the strategies in place to have a good fiscal 26 year, as we showed today with our guidance.

Got it. That's helpful. Thank you. And then just following on the tariff questions, are you expecting any specific or maybe incremental chassis impact from the most recent

tariffs on medium-duty trucks? We are not at this point. The whole tariff subject for us has many puts and takes. And as you all know, there will be some pretty significant decisions made here in the future, both in terms of any additional tariffs that the administration places on China, if they do so. And also, obviously, the entire subject of tariffs and the justification for tariffs is before the Supreme Court. So that whole topic continues to be very dynamic. You know, every day there seems to be a new wrinkle or curveball, and our teams continue to do both at the centralized sourcing level at the enterprise, but also within the businesses at a procurement level, we continue to be able to mitigate a good majority of those tariff costs before we have to face a decision as to whether to price or not. So, you know, again, we're never comfortable with tariffs, but unfortunately, we've gotten better at managing it, and we just have to do that every day now as part of our business model.

Got it. That's all for us. Thanks, guys.

Thank you. Please stand by for our next question. Our next question comes from the line of Patrick Scholes with Juer Securities. Your line is open.

Hey, good morning, everyone. Thank you. Good morning.

Good morning. Any color on ASP expectations for the upcoming year by segment category that you might be able to provide? Thank you.

Yeah, I'll take that one, Mike. Mike. Generally speaking, we'll have some favorability in the motorhome business just from a perspective of declining incentives that are required to move that product. I mentioned that earlier. For the most part, that's the story in motorized. And pullables, I think we'll have a couple different stories. I think we'll have pricing that will be a natural lift to ASPs in the coming year that will be offset in many respects by continued mix shift towards affordability minded consumers. And then on the marine side we expect again some negative mix. We've got growth that's occurring at the the lower end of Barletta's offering and then we also have within the Criss Craft business the Sportster which is showing high receptivity and that drives an unfavorable mix those being offset by some modest pricing activity so not as much volatility downward I'd say as what we've experienced in the past call it 18 months more stability still some negative mix impacts offset by some pricing thank you for the color thank

you please stand by for our next question um next question comes from the line of Noah Zaskin with KeyBank. Your line is open. Hi, thanks for taking my questions. I guess

most of my questions have been kind of asked and answered, but maybe just one on warranty expense.

Any way we should be thinking about warranty expenses in FY26 relative to 25 and just anything

to be aware of there? Brian, I'll have you comment on maybe the direction that you're willing to share there. Noah, thanks for the question. I want to reiterate that the warranty expense that is shared at times includes both real warranty expense that are often driven by quality issues that we can continue to address and do a better job of, but it also includes significant goodwill and other ways of us taking care of the customer. I'll give you an example, our Barletta pontoon business. Barletta makes, I believe, potentially some of the highest quality pontoons in the entire industry, yet we continue to run our warranty spending there at a level that incorporates a significant amount of customer goodwill to provide support coverage to our dealers and our consumers at a level higher than anybody else in the industry. There's no other montoon manufacturer that I'm aware of that has a significant holiday consumer hotline on 4th of July or Memorial Day or Labor Day when consumers are out on the water and something goes wrong. And we're there to support them and cover them. So warranty for us is not just a barometer of sort of the cost of quality, but it's also an investment at times in how we take care of our customers. But, Brian, any thoughts on Noah's question in terms of, you know, the trend line on that particular item?

Yeah, we've cited improved warranty from a year-over-year perspective in the motorhome segment and then slightly elevated warranty experience in the towable segment and marine segment. We don't see any significant changes or drivers to changing of warranty experience in 2026. I'm expecting, call it consistent types of rates, but no major drivers to OI yield in 2026 as we sit here

today. Very helpful. Thank you.

Thank you. Ladies and gentlemen, we have reached the end of the call. I would now like to turn the call back over to Raymond for closing remarks.

Thank you, Tawanda. That is the end of our fourth quarter earnings call. Thank you to everyone for joining us. We look forward to further updating you on future calls. Enjoy the rest of your day.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.