Winnebago (NYSE:WGO) stock recently jumped after rival Thor Industries (NASDAQ:THOR) made positive comments about the RV market. Despite supply chain issues, Thor is enjoying strong sales and earnings growth heading into late 2021. 

In this Backstage Pass video, which aired Sept. 23, 2021, Motley Fool contributor Demitri Kalogeropoulos talks with Fool contributor Brian Withers about what that good news might mean for Winnebago, which is expected to announce its earnings results soon.

Brian Withers: Let's move on to RVs. Something completely different here.

Demitri Kalogeropoulos: RVs. Yes. Winnebago will be reporting, this is a tentative date. This is when they released earnings a year ago. Usually, the last around there the 20th of October. I don't know if you recall, we had a really big down day on the market yesterday. I'm sure you're aware of that.

But Winnebago is one of just a few companies that was up pretty significantly. The reason Winnebago was up is because a major competitor, Thor Industries, reported their earnings yesterday. It was just really some blowout numbers.

As you might expect, there's new cars in general are seeing a lot of good demand right now. But RVs in particular, because in part because of the pandemic has added a new premium on vacationing, I guess outdoors and close to home.

It's a lot harder to do international travel, for example. A lot of people are looking into these RVs and what Thor said yesterday was just confirming what a lot of people expected that the RV market is still just just booming. Their demand was up 54 percent compared to last year. That includes motorhomes and total products.

There's a lot of expectations for Winnebago to announce similarly positive stuff as you see here in the slide, we've got expectations for about 28% increase in revenue and earnings to go up 35% to nearly two dollars a share are both can be records for Winnebago.

There's a lot of good news like I said in the industry, not only because demand is so high, but supply is so low. Inventories Thor said are down 44% from two years ago. Dealership inventories are down something like 40% from around what you might consider a normal level at this point in 2019. As soon as these RVs hit the dealers, they're just snapped up. A lot of cases people are committing to these really expensive RVs before they even see them.

It's an interesting process I don't know if these companies have dealt with this before, but selling the product before it's even manufactured and delivered. That's just an example. Another example of how crazy high demand is. Then obviously that's pushing RV prices up higher.

But Winnebago has an edge in this department too because it's got a lot of luxury brands. It's got that new more brand. It owns Chris craft boating supplies too which allows us to get into that booming industry too. I would expect Winnebago's earnings to be a little bit better than Thor and that's part of the reason why the stock has been up the last couple of days. But of course, it's going to have to deal with that production issue that there could be a challenge there with supply.

Thor said the same thing. Thor is not able to even get close to meeting its capacity or the demand that it has. Operating a total capacity right now so that'll be something to watch Winnebago say, you've got a pretty good distribution of manufacturing chain here. But if there's slowdown in one of those things that we can't fully staffed.

One of those factors that can really just impact the next quarter or two. But that would be the one negative surprise to watch out for. Then finally, inventory and backlog is really interesting one to watch here. Like I said, in lot of cases, dealerships are ordering these RVs. The wait time is expanding Thor is sitting on a record $16 billion of backlog right now which is more in revenue than they did all of the last year. Meaning theoretically they've almost got these are not made in stone.

These are just orders that haven't been paid yet, but it's nice to be looking at orders that already eclipsed last year's total revenue. That's what I think Winnebago is going to be looking at to some questions. Then it's going to be can they make these products and fulfill them in enough time while demand is still high.

Withers: What was that backlog number that you've said?

Kalogeropoulos: Thor's is $16 billion.

Withers: Oh, Thor is $16 billion. I was looking at $943 million going. Holy cow, [laughs] that's four years.

Kalogeropoulos: Thor has a little bit of a bigger footprint there and they have a big footprint in Europe too.

Withers: Yes, I love how some of the companies you cover when competitors announced earnings, it moves the stock. It'll be interesting to see when they come to announce their actual results.

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