High fuel prices crimping Winnebago motor home sales

Volatile fuel prices are starting to affect sales of Winnebago recreational vehicles, a situation that recalls the last time the prices for gasoline and diesel fuel headed north in 2008.

Forest City-based Winnebago Industries reported a 4 percent drop in second-quarter revenues as its profit jumped nearly fivefold. The company attributed the higher profit to higher prices for its products, fewer discounts and a one-time gain related to its inventory.

Winnebago posted net income of $3.32 million, or 11 cents per share, for the three-month period that ended Feb. 26. That compares with net income of $706,000, or 2 cents a share, a year earlier.

Second-quarter revenue declined 4 percent to $106.6 million from $110.5 million in the same period last year.

The manufacturer of motor homes said earnings were helped by a special gain of $3.5 million related to lower-than-normal inventory scrap and production losses. The company said its dealer inventory increased 7.8 percent while its sales order backlog dropped 17.4 percent from last year.

Winnebago Chairman and Chief Executive Officer Bob Olson said the company remains cautious “in light of the volatility of fuel prices due primarily to the violence and turmoil in the Middle East, as well as increasing commodity costs.”

When fuel prices soared in 2008, Winnebago sales and earnings took a major hit. The company lost $12.7 million in the final quarter of fiscal 2008 as sales plummeted 64.1 percent.