The recovery of the market for recreational vehicles will slow down due to the stalling economy, leading to lower profits for RV makers, Baird analysts said.
RV sales have recovered from a sharp decline during the recession last year, growing 10 percent at retail through June, Baird analysts wrote in a note to investors. But stagnating consumer spending is a bad sign for an industry that relies on customers having extra cash to spend on leisure activities. Stubbornly high unemployment is hurting consumer wealth and confidence.
The analysts lowered their 2011 fiscal-year earnings targets for Thor Industries Inc. and Winnebago Industries Inc. They now expect Thor to post 2011 earnings of $2.10 per share instead of a previous forecast of $2.35. Winnebago is expected to make 24 cents per share, down from 43 cents per share.
Winnebago shares fell 55 cents, or 6 percent, to close at $8.50, while Thor shares slid 78 cents, or 3.2 percent, to finish at $23.45.
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