THOR INDUSTRIES INC

Previous wording

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles (“RVs”) in the world based on units sold and revenue. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Statistical Surveys, Inc. (“Stat Surveys”), for the six months ended June 30, 2025, THOR’s current combined U.S. and Canadian market share based on units was approximately 39.1% for travel trailers and fifth wheels combined and approximately 48.3% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”), EHG’s current market share for the six months ended June 30, 2025 based on units was approximately 26.1% for motorcaravans and campervans combined and approximately 17.3% for caravans.

Current wording

We were founded in 1980 and have grown to become the largest manufacturer of recreational vehicles (“RVs”) in the world based on units sold and revenue. We are also the largest manufacturer of RVs in North America, and one of the largest manufacturers of RVs in Europe. In North America, according to Stat Surveys, for the six months ended June 30, 2026, THOR’s current combined U.S. and Canadian market share based on units was approximately 36.8% for travel trailers and fifth wheels combined and approximately 49.8% for motorhomes. In Europe, according to the ECF, EHG’s current market share for the six months ended June 30, 2026 based on units was approximately 27.0% for motorcaravans and campervans combined and approximately 16.6% for caravans.

Previous wording

We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Capital acquisitions of $121,616 in fiscal 2025 were made primarily for purchases of land, production building additions and improvements and replacing machinery and equipment used in the ordinary course of business. See Note 2 to the Consolidated Financial Statements for capital acquisitions by segment. The impact of consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during fiscal 2025, particularly in North America, and are expected to continue to impact the remainder of calendar year 2025 and into calendar 2026. These risks to our business are more fully described in Part 1, Item 1A “Risk Factors” of this Report.

Current wording

We generally have financed our growth through a combination of internally generated cash flows from operations and, when needed, outside credit facilities. Capital acquisitions of $154,632 in fiscal 2026 were primarily purchases of land, production building additions and improvements and replacements of machinery and equipment used in the ordinary course of business. See Note 2 to the Consolidated Financial Statements for capital acquisitions by segment. The impact of consumer confidence, which historically has been highly correlated with RV retail sales, and the impact of inflation on the availability of discretionary funds of our end consumers, combined with higher interest rates compared to recent years impacting both our independent dealers and the end consumer, had a negative impact on demand for our products at both the wholesale and retail levels during fiscal 2026, particularly in North America, and are expected to continue to impact the remainder of calendar year 2026. These risks to our business are more fully described in Part I, Item 1A “Risk Factors” of this Report.

Previous wording

Significant Fiscal 2025 Events

Current wording

Significant Fiscal 2026 and Fiscal 2025 Events

Previous wording

The One Big Beautiful Bill Act (“OBBB”) was signed into law on July 4, 2025. The OBBB includes a broad range of tax reform provisions affecting businesses including, but not limited to, 100% bonus depreciation, expensing of U.S.-based research and development costs, interest expense deduction limitations and changes to international tax provisions. The most relevant impact to the Company for fiscal 2025 is the 100% bonus depreciation for qualified property placed in service after January 19, 2025. The other relevant provisions of the OBBB will impact the Company in fiscal years 2026 and 2027. For fiscal year 2026, the Company will have the option to accelerate its previously capitalized and unamortized U.S. research and development costs over a one or two-year period. Changes to the international provisions will impact the Company in fiscal year 2027.

Current wording

The One Big Beautiful Bill Act (“OBBB”) was signed into law on July 4, 2025. The OBBB includes a broad range of tax reform provisions affecting businesses including, but not limited to, 100% bonus depreciation, expensing of U.S.-based research and development costs, interest expense deduction limitations and changes to international tax provisions. The most relevant impact to the Company for fiscal 2025 was the 100% bonus depreciation for qualified property placed in service after January 19, 2025. The other relevant provisions of the OBBB impact the Company in fiscal years 2026 and 2027. For fiscal year 2026, the Company had the option to accelerate its previously capitalized and unamortized U.S. research and development costs over a one or two-year period, and elected to accelerate and deduct all such costs in fiscal year 2026. Changes to the international provisions will impact the Company in fiscal year 2027.

Previous wording

North American RV independent dealer inventory of our North American RV products as of July 31, 2025 decreased 2.3% to approximately 73,300 units from approximately 75,000 units as of July 31, 2024.

Current wording

North American RV independent dealer inventory of our North American RV products as of July 31, 2026 decreased 12.7% to approximately 64,000 units from approximately 73,300 units as of July 31, 2025.

Previous wording

In September 2025, RVIA reconfirmed its June 2025 forecast for calendar year 2025 North American wholesale unit shipments. Under a most likely scenario, towable and motorized unit shipments are projected to increase to approximately 303,100 and 33,800, respectively, for an annual total of approximately 337,000 units, up 1.0% from the 2024 calendar year wholesale shipments. The RVIA most likely forecast for calendar year 2025 could range from a lower estimate of approximately 320,400 total units to an upper estimate of approximately 353,500 units.

Current wording

In June 2026, RVIA issued a revised forecast for calendar year 2026 North American wholesale unit shipments. Under RVIA's most likely scenario, towable and motorized unit shipments are projected to be approximately 277,400 and 36,600, respectively, for an annual total of approximately 314,000 units, a decrease of 8.2% from the 2025 calendar year wholesale shipments. The RVIA most likely forecast for calendar year 2026 could range from a lower estimate of approximately 300,000 total units to an upper estimate of approximately 328,100 units.

Previous wording

We anticipate that near-term demand will be influenced by many factors, including consumer confidence and the level of consumer spending on discretionary products. We believe future retail demand over the longer term will grow from the current levels as consumer confidence and general economic conditions improve, as we believe interest in the RV lifestyle remains high as consumers continue to value the perceived benefits offered by the RV lifestyle, which provides people with the ability to connect with loved ones and nature as well as the potential to get away for short, frequent breaks or longer adventures.

Current wording

We anticipate that near-term demand will be influenced by many factors, including consumer confidence and the level of consumer spending on discretionary products. We believe future retail demand over the longer term will grow from the current levels as consumer confidence and general economic conditions improve, as we believe interest in the RV lifestyle remains high as consumers continue to value the perceived benefits offered by the RV lifestyle, which provides people with the ability to connect with loved ones and nature as well as the potential to get away for both short, frequent breaks or longer adventures.

Previous wording

The Company’s wholesale RV shipments, for the six months ended June 30, 2025 and 2024, to correspond with the industry wholesale periods noted above, were as follows:

Current wording

The Company’s North American wholesale RV shipments, for the six months ended June 30, 2026 and 2025, to correspond with the industry wholesale periods noted above, were as follows:

Previous wording

Retail statistics of the Company’s RV products, as reported by Stat Surveys, for the six months ended June 30, 2025 and 2024, to correspond with the industry retail periods noted above, were as follows:

Current wording

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the six months ended June 30, 2026 and 2025, to correspond with the industry retail periods noted above, were as follows:

Previous wording

Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the level of consumer confidence, the rate of unemployment, the rate of inflation, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices. We believe these factors will continue to affect retail sales in fiscal 2026. In addition, due to inflationary pressures, including the impact of higher tariffs, current interest rates and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis, particularly in the fall and winter months which historically are lower retail sales periods. It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period, however, we currently believe the remainder of calendar 2025 will continue to be negatively impacted by these factors.

Current wording

Historically, RV industry sales have been impacted by a number of economic conditions faced by RV dealers, and ultimately retail consumers, such as the level of consumer confidence, the rate of unemployment, the rate of inflation, the disposable income of consumers, interest rates, credit availability, the health of the housing market, tax rates and fuel availability and prices. We believe these factors will continue to affect retail sales in fiscal 2027. In addition, due to the impact of inflationary pressures, including the impact from tariffs and the Iran conflict, current interest rates, retail sales trends and other factors, we believe that RV dealers will be continuously reevaluating their desired stocking levels, which may result in lower than historical dealer inventory stocking levels on a unit basis. It is difficult to predict the extent to which any or all of these factors will impact the RV industry or our business in a particular future period; however, we currently believe the remainder of calendar 2026, and potentially beyond, will continue to be negatively impacted by these factors. In particular, elevated fuel prices resulting from the ongoing Iran conflict and the related disruption of shipping through the Strait of Hormuz may negatively impact retail demand for our products.

Previous wording

Despite the continuing near-term challenges, we remain optimistic about the future of North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the ongoing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. The growth in industry-wide RV sales during late calendar year 2020 through early calendar year 2023 resulted in exposing a wider range of consumers to the RV lifestyle. As a result, we believe many of those who have been exposed to the industry for the first time will become future owners once general economic conditions improve, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities. We also believe many consumers are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferring vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home. In addition, we believe that the availability of camping and RV parking facilities will be an important factor in the future growth of the industry and view both the significant recent investments and the committed future investments by campground owners, states and the federal government in camping facilities and accessibility to state and federal parks and forests to be positive long-term factors.

Current wording

Despite the continuing near-term challenges, we remain optimistic about the future of North American retail sales in the long term, as there are many factors driving product interest. Surveys conducted by THOR, RVIA and others show that Americans of all generations love the freedom of the outdoors and the enrichment that comes with living an active lifestyle. RVs allow people to be in control of their travel experiences, going where they want, when they want and with the people they want. The RV units we design, produce and sell allow people to spend time outdoors pursuing their favorite activities, creating cherished moments and deeply connecting with family and friends. Based on the ongoing value consumers place on these factors, we expect to see long-term growth in the North American RV industry. We believe many consumers who were exposed to the industry for the first time over the last few years will become future owners once general economic conditions improve, and that those who became first-time owners since the onset of the pandemic will become long-term RVers, resulting in future repeat and upgrade sales opportunities. We also believe many consumers prefer vacations that RVs are uniquely positioned to provide, allowing consumers the ability to explore or unwind, often close to home. In addition, we believe that the availability of camping and RV parking facilities will be an important factor in the future growth of the industry and view both the significant recent investments and the committed future investments by campground owners, states and the federal government in camping facilities and accessibility to state and federal parks and forests to be positive long-term factors.

Previous wording

Economic and industry-wide factors that have historically affected, and which we believe will continue to affect, our operating results include the costs of commodities, the availability of critical supply components and labor costs incurred in the production of our products. Material and labor costs are the primary factors determining our cost of products sold, and any future increases in raw material or labor costs will impact our profit margins negatively if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. We are closely monitoring the imposition of new and higher U.S. tariffs on imports, as well as retaliatory tariffs or other measures certain other countries have already or may impose on U.S. imports, that may increase our material costs, disrupt our supply of materials or negatively impact our sales into other countries. We are currently uncertain as to the ultimate impact these measures may have given the rapidly changing environment surrounding tariffs and other related political topics. The impact of increased or new tariffs in our fiscal 2025 third and fourth quarters was relatively modest due to the timing of, and changes in, both the announced tariff rates and effective dates and our engagement with our vendors regarding the extent and timing of any resultant cost increases. We would expect additional tariff impacts on our upcoming fiscal 2026 results, but it is difficult to assess the ultimate impact they may have given the ongoing changes in tariff rates, what components will be impacted and when, plus the fact that we are often not importing products or components directly but rather through third-party vendors and therefore do not have complete visibility regarding the timing or impact on the pricing of components we purchase. We intend to continue negotiations with our vendors regarding the timing and extent of any tariff pass-through costs, and where possible, will seek alternative supply sources with lower-priced components.

Current wording

Economic and industry-wide factors that have historically affected, and which we believe will continue to affect, our operating results include the costs of commodities, the availability of critical supply components and labor costs incurred in the production of our products. Material and labor costs are the primary factors determining our cost of products sold, and past and future increases in raw material or labor costs have had, and will continue to have, a negative impact on our profit margins if we are unable to offset those cost increases through a combination of product recontenting, material sourcing strategies, efficiency improvements or raising the selling prices for our products by corresponding amounts. During fiscal 2026, we intentionally did not fully pass along cost increases we incurred, including tariff-related costs, relative to raw material input costs in an effort to manage end-consumer affordability of our products. Our margins were negatively impacted as a result and will continue to be negatively impacted if we are unable to share the burden of future inflationary cost increases across the RV supply chain.

Previous wording

Historically, we have generally been able to offset net cost increases over time, but given the size and nature of the tariffs currently in the process of being implemented and future tariffs being discussed, it may not be possible or desirable for us to pass on the full impact of tariff increases immediately as we are conscious of the impact it likely would have on the retail consumer and their demand for our products. Once a clearer and more certain picture of the tariff environment is established, we will be in a position to more fully assess the potential impact tariffs may have on our product selling prices and our operating results.

Current wording

Historically, we have generally been able to offset net cost increases over time. However, given the size and nature of the tariffs implemented since early calendar 2025, and the anticipated size and nature of any future tariffs, it is more difficult and less desirable for us to pass on the full impact of tariff increases immediately as we are conscious of the impact such offset likely would have on the retail consumer and their demand for our products.

Previous wording

It is extremely difficult to predict when or whether future supply chain issues related to chassis or other components used in the production of RVs will arise, especially when considering the impact tariffs may have on the availability of goods. Modifying available chassis for certain motorized products to use for other products is not a viable alternative, particularly in the short term, due to engineering requirements. Uncertainties related to changing state and federal emission standards may also negatively impact the availability of chassis used in our production of certain North American motorized RVs and could also impact consumer buying patterns. The North American recreational vehicle industry has, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays or other production issues and work stoppages at the chassis manufacturers.

Current wording

It is extremely difficult to predict when or whether future supply chain issues related to chassis or other components used in the production of RVs will arise, especially when considering the impact of tariffs, the ongoing Iran conflict and the related disruption of shipping through the Strait of Hormuz, regulatory changes or supply chain constraints on the availability of chassis or other components. Modifying available chassis for certain motorized products to use for other products is generally not a viable alternative, particularly in the short term, due to engineering requirements. Uncertainties related to changing state and federal emission standards may also negatively impact the availability of chassis used in our production of certain North American motorized RVs and could also impact consumer buying patterns. The North American recreational vehicle industry has, from time to time in the past, experienced shortages of chassis for various reasons, including component shortages, production delays or other production issues and work stoppages at the chassis manufacturers.

Previous wording

The Company monitors industry conditions in the European RV market using a number of resources including its own performance tracking and modeling. The Company also considers retail trends in the European RV market as reported by the European Caravan Federation (“ECF”) and its members. On a monthly basis, the Company receives OEM-specific reports for most of the individual member countries that make up the ECF through the Caravaning Industrie Verband e.V. (“CIVD”). The timing of these reports may vary, but typically they are issued on a one-to-two-month lag. While most countries provide OEM-specific information, the United Kingdom, which made up 15.2% and 9.4% of the caravan and motorcaravan (including campervans) European market for the six months ended June 30, 2025, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Current wording

The Company monitors industry conditions in the European RV market using a number of resources including its own performance tracking and modeling. The Company also considers retail trends in the European RV market as reported by the ECF and its members. On a monthly basis, the Company receives OEM-specific reports for most of the individual member countries that make up the ECF through CIVD. The timing of these reports may vary, but typically they are issued on a one-to-two-month lag. While most countries provide OEM-specific information, the United Kingdom, which made up 14.1% and 8.9% of the caravan and motorcaravan (including campervans) European market, respectively, for the six months ended June 30, 2026, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Previous wording

Independent dealer inventory of our European RV products as of July 31, 2025 was approximately 22,200 units as compared to approximately 26,200 units as of July 31, 2024. In both Germany, which accounts for approximately 60% of our European product sales, and in the other various countries we serve, independent RV dealer inventory levels of our motorized European products are generally in line with historic seasonal levels, while campervan and towable inventory is slightly elevated.

Current wording

Independent dealer inventory of our European RV products as of July 31, 2026 was approximately 20,500 units as compared to approximately 22,200 units as of July 31, 2025. In both Germany, which accounts for approximately 60% of our European product sales, and in the other various countries we serve, independent RV dealer inventory levels of our motorized and campervan European products are generally in line with historical seasonal levels, while urban vehicle and caravan inventory remains slightly elevated, but improving.

Previous wording

Our European operations offer a full lineup of leisure vehicles including caravans and motorized products including urban vehicles, campervans and small-to-large motorcaravans. Our product offerings are not limited to vehicles only but also include accessories and services, including vehicle rentals. We address European retail customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions. With the assistance of data-based and digital marketing, we intend to continue expanding our retail customer reach to new and younger consumer segments.

Current wording

Our European operations offer a full lineup of leisure vehicles including motorized products consisting of small-to-large motorcaravans, urban vehicles and campervans as well as non-motorized caravans. Our product offerings are not limited to vehicles only but also include accessories and services, including vehicle rentals. We address European retail customers through a sophisticated brand management approach based on consumer segmentation according to target group, core values and emotions. With the assistance of data-based and digital marketing, we intend to continue expanding our retail customer reach to new and younger consumer segments.

Previous wording

The impact of current macroeconomic factors on our business, including inflation and interest rates, environmental and sustainability regulations and geopolitical events, is uncertain. Our outlook for future European RV retail sales depends upon the various economic and regulatory conditions in the respective countries in which we sell our products. End-customer demand for RVs depends strongly on consumer confidence. Factors such as the rate of unemployment, the rate of inflation, private consumption and investments, the level of disposable income of consumers, interest rates, the health of the housing market, tax rates and regulatory restrictions and, since the pandemic, travel safety considerations all influence retail sales. While confidence remains in our customer base, in the short term, we expect to continue to experience downward pressure on overall sales volume due to the current macroeconomic environment. Our long-term outlook for future growth in European RV retail sales remains positive due to favorable demographic trends and as more people utilize RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose vehicle to escape urban life and explore outdoor activities and nature.

Current wording

The impact of current macroeconomic factors on our business, including consumer confidence, inflation and interest rates, environmental and sustainability regulations and geopolitical events, is uncertain. Our outlook for future European RV retail sales depends upon the various economic and regulatory conditions in the respective countries in which we sell our products. End-customer demand for RVs depends strongly on consumer confidence. In addition, factors such as the rate of unemployment, the rate of inflation, private consumption and investments, the level of disposable income of consumers, interest rates, the health of the housing market, tax rates and regulatory restrictions and, since the pandemic, travel safety considerations all influence retail sales. In the short term, we expect to experience relatively stable market volume, but ongoing pressure on net sales prices and gross margins due to the current economic environment is expected to continue, partly due to the negative impact of material cost increases, in part as a result of the current situation in the Strait of Hormuz. Our long-term outlook for future growth in European RV retail sales remains optimistic due to favorable demographic trends and due to more people utilizing RVs as a way to support their lifestyle in search of independence and individuality, as well as using the RV as a multi-purpose vehicle to escape urban life and explore outdoor activities and nature.

Previous wording

We and our independent European dealers market our European recreational vehicles through multiple avenues including at numerous RV fairs at the country and regional levels which occur throughout the calendar year. These fairs have historically been well-attended events that allow retail consumers to see the newest products, features and designs and to talk with product experts in addition to being able to purchase or order an RV. The most recent major industry fair, the 2025 Caravan Salon show in September 2025, experienced near-record attendance, which demonstrates the continued high level of interest in the RV lifestyle. In addition to our attendance at various strategic trade fairs, we have and will continue to strengthen and expand our digital activities to reach high potential target groups, generate leads and steer customers directly to dealerships. With approximately 1,100 active independent dealers in Germany and throughout Europe with whom we do business, we believe our European brands have one of the strongest and most professionally structured dealer and service networks in Europe.

Current wording

We and our independent European dealers market our European recreational vehicles through multiple avenues including at numerous RV fairs at the country and regional levels which occur throughout the calendar year. These fairs have historically been well-attended events that allow retail consumers to see the newest products, features and designs and to talk with product experts in addition to being able to purchase or order an RV. The most recent major industry fair, the 2026 Caravan Salon show in Düsseldorf in September 2026, was once again well attended and yielded strong sales, which demonstrates a sustained high level of interest in the RV lifestyle. In addition to our attendance at various strategic trade fairs, we continue to strengthen and expand our digital activities to reach high potential target groups, generate leads and steer customers directly to dealerships. With approximately 1,100 active independent dealers in Germany and throughout Europe with whom we do business, we believe our European brands have one of the strongest and most professionally structured dealer and service networks in Europe.

Previous wording

Economic or industry-wide factors affecting our European RV operating results include the availability and costs of commodities and component parts and the labor used in the manufacture of our products. Labor agreements and various governmental regulations are primary drivers in the cost of our labor force and impact how and when we can adjust our labor force to align with changing production needs. Adjusting our full-time workforce downwards in most of the locations where we operate in Europe generally results in negotiated separation costs, which may be material depending on the size of the workforce reduction. Material and labor costs are the primary factors determining our cost of products sold and any future increases in these costs could negatively impact our profit margins if we are unable to offset those costs through a combination of product recontenting, material sourcing strategies, efficiency improvements, headcount reductions or raising the selling prices for our products by corresponding amounts.

Current wording

Economic or industry-wide factors affecting our European RV operating results include the availability and costs of commodities and component parts and the labor used in the manufacture of our products. Labor agreements and various governmental regulations are primary drivers in the cost of our labor force and impact how and when we can adjust our labor force to align with changing production needs. Adjusting our full-time workforce downwards in most of the locations where we operate in Europe generally results in negotiated separation costs, which may be material depending on the size of the workforce reduction. Raw material and labor costs are the primary factors determining our cost of products sold, and increases in raw material or labor costs have negatively impacted, and are expected to continue to, negatively impact our profit margins. Historically, we have generally been able to offset net cost increases over time, however, given the current economic environment, it is more difficult and likely less desirable for us to pass on the full impact of rising material costs as we are conscious of the impact such increases likely would have on the retail consumer and their demand for our products.

Previous wording

While overall chassis supply has improved, disruption in the sequence of chassis supply has in the past inhibited, and could in the future, inhibit our ability to efficiently and consistently maintain our planned production levels. Uncertainties related to changing emission standards may also negatively impact the availability of chassis and/or other components used in our production of certain European motorized RVs and could also impact consumer buying patterns.

Current wording

Disruption in the sequence of chassis supply and the supply of other critical components has, in the past, and is continuing to, inhibit our ability to efficiently and consistently maintain our planned production levels. Uncertainties related to changing emission standards may also negatively impact the availability of chassis and/or other components used in our production of certain European motorized RVs and could also impact consumer buying patterns.

Previous wording

In addition to potential future material supply constraints, labor shortages have in the past impacted, and could in the future, impact our European operations given the numerous locations where our manufacturing sites are located and the differing availability of skilled labor in those locations. As previously noted, high levels of labor costs and limitations on our ability to reduce those costs commensurate with market conditions have in the past, and could in the future, negatively impact our European operations.

Current wording

In addition to potential future material supply constraints, labor shortages have in the past impacted, and could in the future, impact our European operations given the numerous locations where our manufacturing sites are located and the differing availability of skilled labor in those locations. As previously noted, high levels of labor costs and limitations on our ability to reduce those costs commensurate with market conditions have in the past, and could in the future, negatively impact the profitability of our European operations.

Previous wording

Consolidated net sales for fiscal 2025 decreased $463,918, or 4.6%, compared to fiscal 2024. The decrease in consolidated net sales is primarily due to lower current dealer and consumer demand in comparison to fiscal 2024 in the North American Motorized and European segments, partially offset by an increase in net sales from our North American Towable segment. Approximately 32% of the Company’s consolidated net sales for fiscal 2025 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The $463,918, or 4.6% decrease in consolidated net sales in fiscal 2025 is net of an increase of $54,492 from the change in currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative periods.

Current wording

Consolidated net sales for fiscal 2026 increased $28,655, or 0.3%, compared to fiscal 2025. Approximately 34% of the Company’s consolidated net sales for fiscal 2026 were transacted in a currency other than the U.S. dollar. The Company’s most material exchange rate exposure is sales in Euros. The increase in consolidated net sales in fiscal 2026 included an increase of $179,432 from the change in foreign currency exchange rates between the two periods. To determine this impact, net sales transacted in currencies other than U.S. dollars have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative periods.

Previous wording

Consolidated gross profit for fiscal 2025 decreased $111,321, or 7.7%, compared to fiscal 2024. Consolidated gross profit was 14.0% of consolidated net sales for fiscal 2025 and 14.5% for fiscal 2024. The decreases in consolidated gross profit and the consolidated gross profit percentage in fiscal 2025 compared to fiscal 2024 were both primarily due to the impact of the decrease in consolidated net sales coupled with increased sales discounting.

Current wording

Consolidated gross profit for fiscal 2026 decreased $128,011, or 9.5%, compared to fiscal 2025. Consolidated gross profit was 12.6% of consolidated net sales for fiscal 2026 and 14.0% for fiscal 2025. The decreases in consolidated gross profit and the consolidated gross profit percentage in fiscal 2026 compared to fiscal 2025 were both primarily due to unfavorable changes in North American Towable and European product mix toward lower-margin products in addition to absorbing more material cost increases in fiscal 2026 as compared to fiscal 2025.

Previous wording

The increase in other income, net of $31,949 for fiscal 2025 as compared to fiscal 2024 includes an increase of $14,867 in the gain on the sales of property, plant and equipment in fiscal 2025 as compared to fiscal 2024, primarily due to gains on the sales of certain production facilities in fiscal 2025 related to the strategic organizational restructuring of the Heartland towable operations. In addition, the fiscal 2025 other income, net total includes $12,153 of insurance income related to the weather event discussed in Note 19 to the Consolidated Financial Statements, and an improvement in the operating results of our equity method investments of $9,331 as discussed in Note 7 to the Consolidated Financial Statements. These favorable changes were partially offset by an increase in foreign exchange losses of $8,315 between fiscal 2025 and fiscal 2024.

Current wording

The increase in Other income, net of $32,910 for fiscal 2026 as compared to fiscal 2025 included an increase of $12,232 in the gain on the sales of property, plant and equipment in fiscal 2026 as compared to fiscal 2025, a favorable change in consolidated foreign currency gains of $12,996 between the two periods and increased gains of $16,391 in the fair value of certain warrants and stock investments at Corporate. In addition, there was a $5,373 favorable change at Corporate in the fair value of the Company's deferred compensation plan assets due to market value fluctuations between the fiscal years and a favorable improvement in the operating results of our equity-method investments of $4,849. These favorable changes were partially offset by an impairment charge of $7,822 taken in fiscal 2026 on certain North American Towable assets held for sale at July 31, 2026 and $12,153 of insurance income in fiscal 2025 related to the weather event discussed in Note 20 to the Consolidated Financial Statements.

Previous wording

Amortization of intangible assets expense for fiscal 2025 decreased $13,517, or 10.2%, to $119,027, compared to fiscal 2024 due to a reduction in dealer network amortization, which is amortized on an accelerated basis and therefore decreases over time.

Current wording

Amortization of intangible assets expense for fiscal 2026 decreased $6,868, or 5.8%, to $112,159, compared to fiscal 2025 primarily due to a reduction in dealer network amortization, which is amortized on an accelerated basis and therefore decreases over time.

Previous wording

The decrease of $52,653, or 15.1%, in income before income taxes for fiscal 2025 compared to fiscal 2024, was primarily driven by the impact of the decrease in consolidated net sales and the increase in selling, general and administrative expenses noted above.

Current wording

The decrease of $57,470, or 19.4%, in income before income taxes for fiscal 2026 compared to fiscal 2025, was primarily driven by the decrease in gross profit noted above, partially offset by the decreases in selling, general and administrative expense and amortization expense and the increase in other income, net noted above.

Previous wording

The overall annual effective income tax rate for fiscal 2025 was 13.4%, compared with 23.9% for fiscal 2024. The two primary reasons for the decrease in the overall annual effective income tax rate were the foreign tax law change in fiscal 2025 that resulted in the favorable revaluation of foreign deferred tax liabilities, and the rate was also favorably impacted by the year-over-year change in the jurisdictional mix of earnings between foreign and domestic operations, inclusive of certain foreign exchange gains not subject to taxation.

Current wording

The overall annual effective income tax rate for fiscal 2026 was 26.8%, compared with 13.4% for fiscal 2025. The year-over-year change is a result of the jurisdictional mix of earnings between foreign and domestic operations. The rate for the current year was negatively impacted by certain losses in foreign jurisdictions without an associated tax benefit and changes in statutory tax rates in certain foreign jurisdictions. The rate for fiscal 2025 was favorably impacted by a foreign tax law change that resulted in a favorable revaluation of foreign deferred tax liabilities.

Previous wording

Additional information concerning the changes in net sales, gross profit and selling, general and administrative expenses are addressed below in the segment reporting that follows.

Current wording

Additional information concerning the changes in net sales, gross profit, selling, general and administrative expenses and income before income taxes are addressed below and in the segment reporting that follows.

Previous wording

Net expense for Corporate interest and other income and expenses decreased $45,872 in fiscal 2025 compared to fiscal 2024. Net interest expense decreased by $36,198 due to lower average outstanding debt balances and lower interest rates coupled with the prior-year interest expense including debt extinguishment charges of $7,566 related to the November 2023 debt refinancing. In addition, the operating results of our equity method investments as discussed in Note 7 to the Consolidated Financial Statements improved by $9,331 in fiscal 2025 as compared to fiscal 2024, and there were favorable changes of $7,612 in certain other equity investments and warrants due to market value fluctuations. These favorable changes were partially offset by an unfavorable change of $2,377 in the fair value of the Company’s deferred compensation assets and an increase of $4,394 in non-cash foreign currency losses on certain Euro-denominated loans between the two periods.

Current wording

Corporate interest and other income, net changed favorably by $46,068 in fiscal 2026 compared to fiscal 2025, primarily due to an increase in the gains in the fair value of certain warrants and stock investments of $16,391 in fiscal 2026 compared to fiscal 2025, a favorable change of $5,373 in the fair value of the Company’s deferred compensation plan assets due to market value fluctuations between the fiscal years and a favorable change of $7,219 related to non-cash foreign currency gains on certain Euro-denominated loans between the fiscal years. Net interest expense also decreased $9,222 primarily due to lower overall average outstanding debt balances and slightly lower overall interest rates. In addition, there was a favorable improvement in the operating results of our equity-method investments of $4,849.

Previous wording

The increase in total North American Towable net sales of 2.9% compared to the prior fiscal year resulted from a 6.2% increase in unit shipments and a 3.3% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments was primarily due to the heightened demand for the lower-cost travel trailer units as compared to the prior year. According to statistics published by RVIA, for the twelve months ended July 31, 2025, combined travel trailer and fifth wheel wholesale unit shipments increased 6.3% compared to the same period last year. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2025 and 2024, our retail market share for travel trailers and fifth wheels combined was 38.4% and 40.3%, respectively.

Current wording

The decrease in total North American Towable net sales of 16.1% compared to the prior fiscal year resulted from a 20.7% decrease in unit shipments and a 4.6% increase in the overall net price per unit due to the combined impact of changes in product mix and price. The decrease in unit shipments was primarily due to lower demand for the lower-cost travel trailer units relative to the prior fiscal year, as travel trailer unit shipments decreased 22.4% from the prior year. According to statistics published by RVIA, for the twelve months ended July 31, 2026, combined travel trailer and fifth wheel wholesale unit shipments decreased 11.5% compared to the same period ending July 31, 2025. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2026 and 2025, our retail market share for travel trailers and fifth wheels combined was 37.4% and 38.4%, respectively.

Previous wording

The decrease in the overall net price per unit within the travel trailer product line of 9.5% during fiscal 2025 was primarily due to current product mix trending toward more moderately-priced units as compared to the prior year. The increase within the fifth wheel product line of 6.6% during fiscal 2025 was primarily due to product mix changes and lower sales discounting as compared to fiscal 2024.

Current wording

The modest increases in the overall net price per unit within the travel trailer product line of 3.6% and the fifth wheel product line of 1.5% during fiscal 2026 were both primarily due to product mix changes as compared to fiscal 2025. The slightly higher increase in the overall net selling price in the North American Towable segment of 4.6% was also impacted by a greater percentage of sales of the higher-priced fifth wheel units as compared to travel trailer units in the current fiscal year.

Previous wording

North American Towable cost of products sold increased $35,405 to $3,287,690, or 86.9% of North American Towable net sales, for fiscal 2025 compared to $3,252,285, or 88.4% of North American Towable net sales, for fiscal 2024. Changes in material, labor, freight-out and warranty costs comprised $27,822 of the $35,405 increase in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales were 78.8% for fiscal 2025 and 80.2% for fiscal 2024, with the reduction including a decrease in the material cost percentage, primarily due to lower sales discounting, and the warranty cost percentage also improved.

Current wording

North American Towable cost of products sold decreased $467,580 to $2,820,110, or 88.8% of North American Towable net sales, for fiscal 2026 compared to $3,287,690, or 86.9% of North American Towable net sales, for fiscal 2025. Changes in material, labor, freight-out and warranty costs comprised $439,013 of the $467,580 decrease in cost of products sold. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales were 80.0% for fiscal 2026 and 78.8% for fiscal 2025, with the increase primarily due to an increase in the material cost percentage due to more lower-margin product sales coupled with material cost increases, partially offset by a decrease in the warranty cost percentage.

Previous wording

The decrease of $67,206 in North American Motorized gross profit for fiscal 2025 compared to fiscal 2024 was driven by the decrease in North American Motorized net sales coupled with the decrease in the gross profit percentage, which is due to the increase in the cost of products sold percentage noted above.

Current wording

The decrease of $140,399 in North American Towable gross profit for fiscal 2026 compared to fiscal 2025 was driven primarily by the decrease in North American Towable net sales while the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

Previous wording

The decrease in total North American Motorized net sales of 11.0% compared to the prior fiscal year resulted from an 8.6% decrease in unit shipments and a 2.4% decrease in the overall net price per unit due to the combined impact of changes in product mix and price, which included elevated sales discounts compared to fiscal 2024. The decrease in unit shipments was primarily due to a softening in current dealer and consumer demand in comparison with the demand in the prior fiscal year. According to statistics published by RVIA, for the twelve months ended July 31, 2025, combined motorhome wholesale unit shipments decreased 11.6% compared to the same period last year. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2025 and 2024, our retail market share for motorhomes was 47.7% and 47.8%, respectively.

Current wording

The increase in total North American Motorized net sales of 12.8% compared to the prior fiscal year resulted from a 12.4% increase in unit shipments and a 0.4% increase in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments was primarily due to an increase in dealer and consumer demand compared to the demand in the prior fiscal year. According to statistics published by RVIA, for the twelve months ended July 31, 2026, combined motorhome wholesale unit shipments increased 6.8% compared to the same period ended July 31, 2025. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 2026 and 2025, our retail market share for motorhomes was 48.5% and 47.8%, respectively.

Previous wording

The decrease in the overall change in product mix and price per unit within the Class A product line of 4.5% was primarily due to product mix changes, primarily a higher concentration in fiscal 2025 of the more moderately-priced gas units as opposed to the higher-priced diesel units, in addition to higher discounting levels. The decrease in the overall net price per unit within the Class C product line of 1.8% was primarily due to higher discounting levels, and the Class B product line increase of 2.7% was primarily due to increases from product mix changes and selective net selling price increases being partially offset by higher discounting levels compared to fiscal 2024.

Current wording

The increase in the overall change in product mix and price per unit within the Class A product line of 4.1% was primarily due to a higher concentration of sales of the generally higher-priced diesel units as opposed to the more moderately-priced gas units in fiscal 2026. The increase in the overall net price per unit within the Class C product line of 2.1% was primarily due to product mix changes and selective selling price increases, and the Class B product line decrease of 1.6% was primarily due to product mix changes towards more moderately-priced Class B units compared to fiscal 2025.

Previous wording

North American Motorized cost of products sold decreased $203,040 to $1,964,970, or 90.3% of North American Motorized net sales, for fiscal 2025 compared to $2,168,010, or 88.6% of North American Motorized net sales, for fiscal 2024. The changes in material, labor, freight-out and warranty costs comprised $188,009 of the $203,040 decrease due to the decreased sales volume. Material, labor, freight-out and warranty costs as a combined percentage of motorized net sales was 84.1% for fiscal 2025 compared to 82.4% for fiscal 2024, with the increase due to an increase in the material cost percentage, primarily due to higher sales discounting and product mix changes, partially offset by a decrease in the warranty cost percentage.

Current wording

North American Motorized cost of products sold increased $274,340 to $2,239,310, or 91.2% of North American Motorized net sales, for fiscal 2026 compared to $1,964,970, or 90.3% of North American Motorized net sales, for fiscal 2025. The changes in material, labor, freight-out and warranty costs comprised $255,278 of the $274,340 increase primarily due to the increased net sales. Material, labor, freight-out and warranty costs as a combined percentage of motorized net sales was 84.9% for fiscal 2026 compared to 84.1% for fiscal 2025, with the slight increase primarily due to a modest increase in the material cost percentage.

Previous wording

The decrease of $11,683 in North American Motorized selling, general and administrative expenses in fiscal 2025 compared to fiscal 2024 was primarily due to the decreases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to decrease by $10,911. The increase in the overall selling, general and administrative expense as a percentage of North American Motorized net sales was primarily due to the decrease in North American Motorized net sales.

Current wording

The increase of $5,289 in North American Motorized selling, general and administrative expenses in fiscal 2026 compared to fiscal 2025 was primarily due to the increase in North American Motorized net sales, which caused related commissions and other compensation to increase by the same $5,289. The decrease in the overall selling, general and administrative expense as a percentage of North American Motorized net sales was primarily due to the increase in North American Motorized net sales.

Previous wording

The decrease of $41,153 in North American Motorized income before income taxes for fiscal 2025 compared to fiscal 2024 was primarily due to the impact of the decrease in North American Motorized net sales, partially offset by $11,180 of insurance income recognized in fiscal 2025 as discussed in Note 19 to the Consolidated Financial Statements. The primary reason for the decrease in the income before income taxes percentage was the increase in the cost of products sold percentage noted above.

Current wording

The decrease of $11,180 in North American Motorized income before income taxes for fiscal 2026 compared to fiscal 2025 was primarily due to the decrease in North American Motorized Other income, net of $12,890, which was primarily due to the insurance income recognized in fiscal 2025 related to the weather event discussed in Note 20 to the Consolidated Financial Statements.

Previous wording

The decrease in total European Recreational Vehicle net sales of 10.1% compared to the prior fiscal year resulted from a decrease of 19.7% in unit shipments and an increase of 9.6% in the overall net price per unit due to the total impact of changes in foreign currency, product mix and price. The decrease in European Recreational Vehicle net sales of $341,019 includes an increase of $54,492, or 1.7% of the net 10.1% decrease, due to the change in foreign exchange rates in fiscal 2025 compared to fiscal 2024. Sales on a constant-currency basis decreased by 11.8%.

Current wording

The increase in total European Recreational Vehicle net sales of 9.0% compared to the prior fiscal year resulted from an increase of 2.7% in unit shipments and an increase of 6.3% in the overall net price per unit due to the total impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $272,768 includes an increase of $179,432, or 5.9% of the net 9.0% increase, due to the change in foreign exchange rates in fiscal 2026 compared to fiscal 2025. Sales on a constant-currency basis increased by 3.1%. According to the most recently published statistics from the ECF, our combined European market share for the twelve-month periods ended June 30, 2026 and 2025 was approximately 23.9% and 23.4%, respectively.