Coming off a record fiscal quarter, Winnebago Industries (WGO -1.99%) looks to haul a bigger piece of the thriving recreational vehicle market. A string of acquisitions over the past few years, including its entry into the boating segment, shows investors that Winnebago is looking to gain more market share.

To do so, the company will have to overcome burdens including inflation and supply chain inconsistencies, all while fending off robust competition. But with visionary CEO Michael Happe driving the ship, and the imminent launch of its all-electric RV, Winnebago could really go places.

A family eats at a picnic table next to a parked Winnebago RV.

Image source: Winnebago.

A time-honored classic, reimagined

Winnebago is practically synonymous with RVs, and the household name is well-ingrained in American culture. That's helpful, but against fierce competition such as Thor Industries (THO -1.28%) and Forest River, the RV maker has a long uphill climb ahead. Thor and Forest River collectively accounted for roughly 80% of RV sales last year.

To set itself apart, Winnebago's aiming to be a "differentiator" in the industry, targeting discerning buyers of premium RVs. One of Winnebago's secret weapons is its CEO. Recruited to Winnebago in 2016, Michael Happe transformed the company over the next few years with strategic acquisitions.

Starting with the purchase of Grand Design RV in 2016, Happe looked to cover more of the towables market, specifically "fifth wheel" trailers that attach to pickup trucks. This move not only made Winnebago a more well-rounded RV company, but also provided a financial boost to further grow the business.

In 2018, Happe boldly broke the company into the marine industry with the acquisition of Chris-Craft, a premium boat builder. The following year, Winnebago purchased Newmar Corporation, a manufacturer of luxury motorhomes. Its most recent acquisition was Barletta Pontoon Boats in 2021, "the fastest-growing boat company in the fastest-growing recreational boating segment."

Challenges and opportunities ahead

Supply chain disruptions present Winnebago's most immediate challenge. They've caused a shortage of RV components and eaten into profit margins. Additionally, higher operating costs, along with rising commodity prices have dragged on company performance.

From customers' standpoint, high inflation, fears of an impending recession, and rising interest rates could all contribute to a reduction in demand.

Despite those headwinds, Winnebago continues to claim more and more market share, reporting 13.2% of the RV retail market, including travel trailers, fifth wheels, and motorhomes. Last year, the company held 11.6% market share, meaning the company's cut of its market grew by 13.8%  year over year. Considering Winnebago's market share was only 3% when Happe took the helm in 2016, that is indeed impressive growth. 

This rapid growth can be attributed to Happe's astute assessment of the RV market and strategic acquisitions. With its substantially expanded line of RVs on the market, thanks to purchases of Grand Design and Newmar, Winnebago is steadily gaining traction. 

Thanks to its bigger slice of the total RV market, Winnebago posted record Q3 fiscal 2022 results last month, citing 41% organic growth and record revenue of $1.5 billion, up 52% year over year.

How Winnebago's embracing the future

Introduced earlier this year, Winnebago's e-RV is an all-electric motorhome currently in concept phase. Last month the company proudly announced the e-RV's completion of a 1,300-mile road trip. While the e-RV still needs more testing, Winnebago's hoping to be a leader in this emerging market. 

And during its annual Grand National Rally event for owners earlier this month, Winnebago launched its first-ever mobile app. Providing information including vehicle key features and nearby service providers, Winnebago's new app is another selling point to draw in tech-savvy customers.

A cultural phenomenon for nearly 65 years, Winnebago can be summed up in the words of founder John K. Hanson: "You can't take sex, booze, or weekends away from the American people." Although the immediate road ahead looks tough, if Winnebago can keep its foot on the accelerator, RV stock investors could soon be turning their heads.