Image: Thor Industries.

Interest in recreational vehicles has increased as gasoline prices have fallen, and Thor Industries (NYSE:THO) has sought to benefit from favorable trends in the industry. Coming into its fiscal second-quarter financial report on Monday, Thor investors had hoped that the company would outperform industry peer Winnebago (NYSE:WGO) and find ways to accelerate its growth. Thor's results were better than many had expected and pointed to continued strength in the RV market for the foreseeable future. Let's look more closely at how Thor Industries did during the quarter and whether better times are ahead for the RV-maker.

Thor Industries produces thunderous results
Thor Industries' fiscal second-quarter results confirmed the growth trends that investors had hoped to see. Revenue from continuing operations climbed 14% to $852.4 million, and net sales of $975.1 million were well above the $910 million consensus figure among those following the stock. Thor managed to do well on the bottom line as well, producing net income of $44.7 million. That was up more than 55% from the year-ago quarter, and adjusted earnings of $0.86 per share on a continuing basis compared extremely favorably with the $0.62 per share that investors were expecting to see.

A closer look at the results in the various product lines that Thor Industries has showed consistent growth. Towable RV sales were up a modest 3% from the year-ago quarter, but that produced a rise of nearly a third in pre-tax income. Thor attributed the gains to an increase in towable sales generally as well as a more favorable product mix that generated greater profits. In addition, improvements in warranty costs also contributed to the bottom line. Backlogs in the towable RV category climbed 13% to $708.4 million.

Meanwhile, the motorized RV segment showed even healthier growth. Sales climbed 37%, and pre-tax income was up by nearly three-quarters from the year-ago period. Strong dealer and consumer responses to new products in Thor's lineup showed how well-received the company's efforts have been. Thor claimed better results than the industry as a whole, and although some of the gains were attributable to a one-time acceleration of shipments into the quarter, backlogs overall climbed by more than 25% to $396.8 million.

Inventory figures also climbed. Total dealer inventory was up 2% to 78,000 units, up from 76,400 units at the end of the year-ago period.

Thor Industries CEO Bob Martin celebrated the news. "Our second-quarter results reflect the success of our operating strategy, the popularity of Thor's products, and the breadth of our RV dealer base," Martin said. He also pointed to acquisitions and internal investments as playing a key role in generating growth.

Can Thor Industries stay out in front?
Moreover, prospects for Thor Industries continue to look favorable. "The retail market remains positive," noted Martin, "as evidenced by strong attendance and sales at the early spring retail shows." The CEO also pointed out that Thor's dealer network is optimistic about its future, and Thor is responding by increasing production at its new western facility.

Thor didn't provide any hard numbers for guidance, but it did give some general views on its outlook. Thor still expects revenue to grow in the second half of the fiscal year, but it will come at a more modest pace. Recent reductions in material costs will start to flatten out, and that will keep margins from spreading out any further. In addition, Thor expects its income tax rate to rise on a year-over-year basis.

Overall, Thor Industries investors were pleased with the report, sending the stock up nearly 5% in the first couple hours of after-market trading following the announcement. As long as the company can keep outpacing Winnebago and compete more effectively in the RV market going forward, Thor Industries appears to have a lot going for it in 2016 and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.