Someday, historians may look back on the financial crisis in 2008 and mark it as the beginning of the end of a national pastime. Packing up the Winnebago
It certainly has been anything but a relaxing drive on the highways and byways for Winnebago. The company's sales have crashed hard since the end of the 2007 fiscal year, and from August 2007 to August 2009, revenue fell almost 76% as consumers reeled in their spending. Once a sure bet to consistently turn out a profit each year, the company posted its first fiscal year loss since 1994 last year. While revenue declined for sales of other leisure vehicles like Harley-Davidson
Like Davy Crockett, industry leader Winnebago isn't going down without a fight. The company has turned out two consecutive profitable quarters and after downsizing operations because of decreased demand, things are looking a lot rosier. Revenues increased 114.6% for the first nine months of fiscal 2010. Net income for the first nine months of fiscal 2010 was $5.4 million versus a loss of $28.5 million for the first nine months of fiscal 2009. Perhaps more importantly, dealer inventory has leveled off, signaling that the supply and demand for the company's RVs is returning to equilibrium. Competitor Thor Industries
You can't help but be impressed with Winnebago's fortitude, but what if the economy does enter a double-dip recession as some are forecasting? While Winnebago is financially strong and has proven to be resourceful, another downturn could spell disaster. Since motor homes are a luxury good and not a necessity, further belt-tightening by consumers could have grave repercussions for the company's sales. Unless you're confident the recovery will continue for the foreseeable future, then your best bet is to play it safe and stay away from this stock for now.
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