Thor Earnings: Quality Improvements and Inventory Accounting Enable Good Finish to Fiscal 2024

Thor finished fiscal 2024 with a solid quarter despite continued soft demand. We are leaving our fair value estimate unchanged but will update our model for the 10-K shortly. A fair value reduction may occur as fiscal 2025 revenue guidance of $9.0 billion to $9.8 billion is below the $11.1 billion we model, as is the EPS guidance of $4.00-$5.00 versus our $7.65. Dealers remain wary of restocking North American inventory, and management, in our view prudently, does not expect improved sentiment until some time in second-half fiscal 2025. The Europe segment should decline from fiscal 2024 record sales due to dealer restocking there not repeating in fiscal 2025. Management feels its European inventory level is adequate but North America could be a bit lower given dealer sentiment. We and Thor management believe further US interest rate cuts are needed to meaningfully boost demand.