Winnebago Industries Fiscal Q4 2026 Earnings Call: Cost Actions Support FY2027 EPS Outlook

Winnebago Industries (NYSE: WGO) reported fiscal fourth-quarter revenue of $645.1 million and adjusted diluted EPS of $0.49. Retail demand remained subdued, but management expects cost reductions, operating efficiencies and selected market-share gains to support higher adjusted EPS in fiscal 2027.

Key Takeaways

• Fiscal Q4 2026 net revenue was $645.1 million, adjusted EBITDA was $32.6 million with a 5.1% margin, and adjusted diluted EPS was $0.49.
• Full-year revenue was approximately $2.7 billion, adjusted diluted EPS was $1.79 and free cash flow increased to $144.6 million from $89.5 million in fiscal 2025.
• Motorhome RV operating margin improved by more than 250 basis points year over year to 2.4%, reflecting operational efficiencies, lower discounts and disciplined cost management.
• Management guided fiscal 2027 revenue to $2.65 billion-$2.8 billion and adjusted diluted EPS to $1.65-$2.25. The $1.95 midpoint implies 9% growth from fiscal 2026.
• Manufacturing and structural cost initiatives are expected to generate $70 million-$80 million in cumulative gross savings over fiscal 2027 through fiscal 2029, although a significant portion will offset inflation.
• RV dealer inventory turns improved to 1.8x. Management continues to target approximately 2x, while acknowledging the possibility of further dealer destocking.

Core Financial Data

Business and Operating Performance

Towable RV

Towable RV revenue fell to $220.3 million as dealers ordered cautiously and competition remained elevated. Lower unit volume and a shift toward lower-priced models more than offset pricing.

Winnebago-branded travel trailers reached 1.7% retail unit share for the trailing 12 months ended August 31, up approximately 30 basis points. Grand Design Towables dealer inventory turns improved to 2.0x from 1.6x in the third quarter.

The company is relocating Winnebago Towables production to Grand Design’s Middlebury campus and consolidating selected Grand Design manufacturing lines to improve utilization and efficiency.

Motorhome RV

Motorhome RV delivered the strongest margin improvement among the company’s segments. Operating margin rose by more than 250 basis points to 2.4%, supported by transformation initiatives, reduced discounts and allowances, and cost discipline.

Newmar helped lift enterprise Class A Diesel retail unit share to 35.4% and dollar share to 41%. Grand Design Motorized reached 3.6% Class C retail unit share, up 170 basis points from the prior-year period.

Management expects Motorhome RV to remain the largest contributor to fiscal 2027 earnings improvement. However, the company said further work is required at Winnebago Motorhome to improve product performance, costs and execution.

Marine

Marine generated $92.3 million of revenue and a 7.1% operating margin. Barletta’s trailing 12-month share of the U.S. aluminum pontoon segment increased by approximately 70 basis points to 9.7%.

Management said Barletta continued to outperform the broader market, while Chris-Craft maintained disciplined production and inventory management.

Balance Sheet and Capital Allocation

Full-year free cash flow rose to $144.6 million, helping reduce net leverage to 2.2x. Winnebago renewed and extended its $350 million revolving credit facility through 2031 and increased its quarterly dividend by 3%.

The company plans to prioritize cash generation, working-capital efficiency and leverage management while selectively investing in its core businesses, aftermarket operations and strategic mobility opportunities.

Management Guidance

For fiscal Q1 2027, management expects net sales to decline at a mid- to high-single-digit rate year over year, led by Towable RV. Adjusted EBITDA margin is expected to be in line with or slightly below the prior-year quarter.

Management expects fiscal 2027 improvement to be weighted toward the second half because the first two quarters are seasonally weaker. The outlook does not assume a broad recovery in RV or marine retail demand.

The company expects $70 million-$80 million in cumulative gross savings over fiscal 2027 through fiscal 2029 from sourcing, SG&A reductions, manufacturing consolidation, facility efficiencies and the rationalization of selected legacy vertical operations. Management said nearly half of the target is tied to structural, non-material cost reductions, but a significant portion of total savings will offset inflation.

Risks and Areas to Watch

• Affordability pressure, elevated financing costs and macroeconomic uncertainty continue to delay new RV and boat purchases.
• Dealers remain cautious about taking inventory, and management sees the possibility of further destocking in both RV and marine channels.
• Competitive intensity and a mix shift toward lower-priced products remain margin headwinds, particularly in Towable RV.
• The company is planning for same-SKU inflation of 2.5%-3.5% in fiscal 2027, with higher pressure in some commodities, including aluminum.
• Management identified evolving trade policy, fuel costs and uncertain retail demand as variables that could affect the outlook.
• Winnebago believes the RV industry has more dealer locations than current retail volumes can support and would not be surprised to see lower-volume locations reduced.

Analyst Q&A Highlights

How can adjusted EPS grow without an industry recovery? Management said fiscal 2027 revenue growth is expected to be limited, with the guidance midpoint implying roughly 1% growth. The projected 9% adjusted EPS increase at the midpoint depends mainly on material savings, operating efficiencies, SG&A controls and selected market-share gains.

When should performance improve? Management expects fiscal Q1 EPS to decline year over year and described fiscal Q2 as relatively immaterial. It expects the stronger contribution to come in the seasonally higher second half.

What supports the $70 million-$80 million savings target? The program includes sourcing, structural cost reductions, manufacturing and facility consolidation, and vertical-operation rationalization. Benefits will build through fiscal 2027, fiscal 2028 and fiscal 2029 as projects are completed and operations stabilize.

What are the longer-term growth priorities? Winnebago outlined three strategic pillars: strengthening its core RV and marine businesses, expanding aftermarket revenue from parts, accessories, service and related offerings, and developing strategic mobility opportunities in portable power and specialty vehicles. Management expects aftermarket investment in fiscal 2027, with benefits building in fiscal 2028 and beyond.

What is the dealer inventory outlook? Management said inventory quantity is in a good position and older model year 2025 inventory is low. Dealers are showing more hesitation toward model year 2027 products while working through model year 2026 inventory. No dealer accounts for more than 10% of consolidated sales.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Welcome to the Winnebago Industries Fourth Quarter and Full Year Fiscal 2026 Financial Results Conference Call.

[Operator Instructions]

Please be advised that today's conference is being recorded.

I would now like to hand the call over to Joan Ondala, Vice President, Treasury and Investor Relations. Ms. Ondala, please go ahead.

Joan Ondala

Thank you, operator. Good morning, everybody. And thank you for joining us to discuss our fiscal 2026 fourth quarter and full year results. This call is being broadcast live on our website at investor.wgo.net, and an audio replay of the call will be available on our website later today.

Our earnings release was issued and posted to our website earlier this morning. Please note that the earnings slide deck, which accompanies our prepared remarks, is also available in the Investors section of our website under Quarterly Results.

Turning to Slide 2. Certain statements made during today's conference call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions you that forward-looking statements involve a number of risks and uncertainties, many of which are beyond the company's control and could cause the actual results to differ materially from these statements. These risks and uncertainties are identified in our SEC filings, including our annual report on Form 10-K, which we encourage you to read. We undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after today's call, except as required by law.

In addition, on today's call, we will refer to GAAP and non-GAAP financial measures. The reconciliation of the non-GAAP measures to the comparable GAAP measures are available in our earnings press release and in the appendix of today's presentation, both available on the Investors page of our website.

Please turn to Slide 3. Hosting today's call are Michael Happe, President and Chief Executive Officer of Winnebago Industries; and Bryan Hughes, Senior Vice President and Chief Financial Officer. Mike will begin with an overview of our fourth quarter performance and our perspective of the market outlook. Bryan will discuss the associated drivers of our financial results and our fiscal year 2027 guidance. Mike will conclude our prepared remarks, and then management will be happy to take your questions.

And with that, please turn to Slide 4 as I hand the call over to Mike.

Michael Happe

Good morning, everyone. I want to begin by thanking our employees across Winnebago Industries. Fiscal 2026 was another challenging year for the RV and marine industries, requiring us to make difficult decisions about the structure and size of our organization in response to market conditions. Through it all, our teams demonstrated tremendous agility and discipline, while continuing to serve our customers and dealer partners at the highest levels possible. I am incredibly grateful for their commitment and hard work. Their dedication and ingenuity give me great confidence in our ability to drive stronger, more durable performance over time.

Starting on Slide 4. Consumer interest in the RV and boating lifestyle remains healthy with continued engagement across shows, digital channels, campgrounds, marinas, and the used market. At the same time, affordability pressures, elevated financing costs and broader macroeconomic uncertainty continue to weigh on consumers and delay the conversion of that interest into new product purchases. That caution is also reflected in dealer ordering with dealers continuing to manage inventory carefully. Against that backdrop, we remain focused on the areas within our control, bringing relevant new products to market, improving operational execution, and managing our product offerings, costs and cash with discipline.

As a result, our fourth quarter results were substantially in line with our expectations. We maintained disciplined production and wholesale shipment levels. And while there are pockets of softness, dealer inventory quality remained broadly within acceptable ranges. RV dealer inventory turns improved to 1.8x, reflecting our continued focus on aligning shipments with retail demand and supporting the health of our dealer network.

Moving to Slide 5. The latest SSI retail results provide encouraging evidence of our brand's competitiveness. At a time when affordability remains a significant consideration for consumers, our premium portfolio is holding its overall RV position, while gaining unit and dollar share in select categories. We believe this performance reflects the strengths of our brands, the appeal of our new products and strong dealer advocacy, reinforced by the steps we have taken to make our offerings accessible across a broader range of price points.

For the trailing 12 months ended August 31, Newmar expanded its leadership in Class A Diesel, helping drive enterprise retail unit share to 35.4% and dollar share to 41%. We also gained share in Class C, where Grand Design Motorized reached 3.6% retail unit share, up 170 basis points from the prior year period. In travel trailers, we gained share in the trailing 12-month period in both units and dollars, even as industry retail units declined approximately 13%. Within that category, Winnebago-branded travel trailers reached 1.7% retail unit share, up approximately 30 basis points from the prior year period. At Grand Design Towables, our largest business, dealer inventory turns improved to 2x exiting the fiscal year, up from 1.6x in the third quarter. This turns improvement reflects healthier channel inventory and provides a stronger foundation for the business in the future.

On Slide 6, Barletta increased its 12-month trailing market share of the U.S. Aluminum Pontoon segment to 9.7%, up approximately 70 basis points from the prior year. That share gain against both established competitors and a growing field of newer entrants reinforces our confidence in the strength of the Barletta brand and the appeal of its differentiated products. Across our portfolio, we are committed to driving profitable share growth. bringing new products to market and maintaining healthy dealer inventories. A financially strong dealer network is essential to delivering sustainable performance for our partners, and for Winnebago Industries.

Throughout fiscal 2026, we took deliberate actions across 4 strategic initiatives outlined here on Slide 7 to improve efficiency, strengthen financial flexibility and position the business for future growth. Our objective is a more resilient and higher-performing enterprise with a disciplined and efficient cost structure, stronger through-cycle margins and, over time, EPS growth that outpaces revenue growth. Some of these initiatives are already contributing to our competitive position, while others will take some time to implement, mature and then translate into improved financial performance. First, we took further steps to improve operational efficiency and align our manufacturing footprint with demand. During the fourth quarter, we announced plans to relocate Winnebago Towables production to Grand Design's Middlebury campus, consolidate select Grand Design manufacturing lines and also bring Winnebago B van production together with our core motorhome operations in Forest City.

These collective actions are designed to improve facility utilization, simplify operations and increase the efficiency and flexibility of our manufacturing network. Our focus now is on executing these transitions well with the financial benefits expected to build over time, as implementation progresses and operations stabilize. Second, we continue investing in innovation that matters to our owners. Grand Design's Omega Frame platform and the expanded use of the composite roof technology across that brand's portfolio are some examples of our focus on product quality and durability. These investments are intended to strengthen quality and the ownership experience, reinforcing the premium positioning of our brands and giving consumers additional reasons to choose them.

Third, we maintained a prudent approach to costs, working capital and liquidity. Throughout the year, our teams aligned spending and inventory levels with prevailing demand, while continuing to support key product and growth priorities. We ended the quarter with net leverage of 2.2x, down meaningfully from 3.1x in the prior year, strengthening our balance sheet and increasing our capacity to invest selectively in the business. We also successfully renewed our $350 million asset-based lending facility, preserving ample liquidity as we enter fiscal 2027. Fourth, we broadened our product portfolio and expanded access to our brands. The products introduced during fiscal 2026 expand our participation across customer segments, use cases and price points.

Taken together, these actions are designed to strengthen our ability to compete through the cycle. There is more work ahead, and our focus in fiscal 2027 is on disciplined execution in translating these initiatives into sustained financial improvement.

Slide 8 shows several of the products introduced during the year. These launches represent deliberate extensions of our portfolio, designed to reach new customer segments, enter additional categories and offer a broader range of price points. At multiple retail, trade and dealer meeting events in September, dealer feedback across our brands was encouraging and reinforced that the investments we have made to broaden our portfolio and reach more consumers are well aligned with evolving consumer preferences.

With that, I'll turn the call over to our CFO, Bryan Hughes, to review the quarter and our fiscal 2027 outlook in more detail. Bryan?

Bryan Hughes

Thank you, Mike. Turning to our consolidated results on Slide 10. Fourth quarter net revenues were approximately $645.1 million, while adjusted EBITDA was approximately $32.6 million, representing a 5.1% margin. Adjusted earnings per diluted share was $0.49. For the full year, net revenues were approximately $2.7 billion and adjusted earnings per diluted share was $1.79. Consolidated revenue declined from the prior year quarter due to lower unit volume and an unfavorable product mix, partially offset by selective price adjustments. Retail demand remained subdued and dealers continued to order cautiously. We deliberately improved dealer inventory turns across our brands, which, along with retail trends, was a significant driver of volume decline. Profitability reflected the impact of lower volume, partially offset by lower SG&A expense, focused cost management and improving performance within the Motorhome RV segment.

Looking at our Towable RV segment on Slide 11. Fourth quarter revenue was approximately $220.3 million, down from the prior year quarter as lower unit volume and a greater mix of lower-priced models more than offset pricing realization. Dealer ordering patterns remained cautious and competitive intensity remained elevated across the category. Operating income was approximately $9.3 million, representing an operating margin of 4.2%. Throughout fiscal 2026, our teams remained focused on balancing affordability, dealer inventory health and profitability. While market conditions continue to be challenging, we believe the operational and manufacturing actions announced during the fourth quarter position us to improve execution and efficiency over time.

Turning now to Motorhome RV on Slide 12. Segment revenue was approximately $323.6 million, while operating income was approximately $7.9 million, representing a 2.4% operating margin. Operating margin improved more than 250 basis points compared with the prior year quarter. The improvement demonstrates the early benefits of the transformation actions underway in Motorhome RV. While revenue declined as lower unit volume and a mix shift toward lower-priced models more than offset improved pricing realization, operating income margin expanded through operational efficiencies generated from transformation initiatives, reduced discounts and allowances and disciplined cost management. Newmar and Grand Design Motorized continued to perform well, while additional work remains at Winnebago Motorhome to improve product performance, cost structure efficiency and operating execution.

Turning to Marine on Slide 13. Fourth quarter revenue was approximately $92.3 million and operating income was approximately $6.6 million, representing a 7.1% operating margin. Barletta continued to perform well relative to the broader market and remained an important contributor to segment profitability. Chris-Craft also managed production and inventory thoughtfully and with discipline throughout the quarter.

Stepping back from the individual segments, I also want to highlight the actions we have taken to manage SG&A across the enterprise. SG&A was lower year-over-year, driven by a disciplined approach to spending and ongoing cost reduction efforts. In addition, we continue to pursue gross margin improvement through material cost management, manufacturing efficiencies and quality initiatives, including leveraging enterprise capabilities such as strategic sourcing. Importantly, our path to stronger margins is not primarily dependent on price increases. We are focused on lasting productivity and cost improvements that can support stronger margins through the cycle while continuing to invest in products that resonate with consumers.

Moving to our balance sheet and cash flow highlights on Slide 14. We delivered strong cash flow in the fourth quarter, reflecting disciplined working capital management and our ability to flex the business in response to market conditions. For the full fiscal year, free cash flow totaled $144.6 million compared with $89.5 million in fiscal 2025. While our cash flow can be seasonal, the fourth quarter performance reinforced the underlying cash-generating capability of the business and supported further leverage reduction. During the fourth quarter, we renewed and extended our $350 million revolving credit facility through 2031 and increased our quarterly dividend by 3%. Together, these actions strengthen our financial flexibility, preserving capacity to invest in our core businesses, pursue attractive growth opportunities and continue to return capital to shareholders.

Turning to our fiscal 2027 business outlook on Slide 16. Our guidance is based on the current market environment and our expectation for North American RV wholesale shipments of 265,000 to 295,000 units in calendar year 2027. We expect consolidated net revenues in the range of $2.65 billion to $2.8 billion, reported earnings per diluted share of $0.90 to $1.50 and adjusted earnings per diluted share of $1.65 to $2.25. The midpoint of our adjusted earnings per share range, $1.95, would represent an increase of 9% from fiscal year 2026. For the first quarter of fiscal 2027, we expect net sales to decrease at a mid- to high single-digit percentage rate compared with the prior year period, reflecting continued headwinds in RV industry retail trends with our Towable RV segment being the primary driver of the decline.

We expect deleverage from a competitive operating environment and sales mix to continue as headwinds with cost savings initiatives helping to offset these pressures. With these factors as the primary drivers to year-over-year performance, we expect adjusted EBITDA margin to be on par to slightly below the prior year first quarter level.

Our outlook takes into account prevailing trends in the RV sector, including competitive dynamics, consumer preferences, macroeconomic conditions and evolving trade policy positions. These factors remain dynamic, and we will continue to provide further updates to our expectations as we progress through the year.

Let me provide a few additional observations to help frame the business trajectory for fiscal 2027. Our outlook does not assume a broad recovery in RV or marine retail demand. We expect improvement in our financial performance to be driven primarily by actions within our control, including product and share initiatives, structural cost reductions and operating efficiencies. The timing of these benefits will vary with certain initiatives building through fiscal 2027 and into fiscal 2028. Together, our previously announced manufacturing footprint actions and broader structural cost initiatives are expected to generate as much as $70 million to $80 million in cumulative gross savings over fiscal years 2027 through 2029.

These savings will come from enterprise sourcing, SG&A cost reductions, manufacturing line and facility efficiency initiatives and consolidation and the rationalization of select legacy vertical operations. We expect a significant portion of the gross savings to offset inflation in materials, labor, health care and other operating costs, with the remaining benefit contributing to margin improvement as the initiatives mature.

Within RV, we expect Motorhome RV to remain the largest contributor to earnings improvement. New products across the Winnebago and Grand Design Motorized portfolios continue to expand dealer distribution and consumer awareness, while the operational actions announced during fiscal 2026 and anticipated in fiscal 2027 will provide additional opportunities to improve profitability. Within Towable RV, our focus remains on strengthening market share, supporting dealer inventory health and improving operating efficiency in what continues to be a highly competitive environment. In Marine, while retail demand remains below historical levels, we believe the strength of the Barletta and Chris-Craft brands, combined with continued product development and disciplined dealer support, positions the segment to benefit as market conditions improve.

From a capital allocation perspective, maintaining financial flexibility remains a priority. We will continue to focus on cash generation, working capital efficiency and leverage management while investing selectively in the business. At the same time, we remain committed to returning cash to our shareholders through our dividend and as cash generation and leverage levels allow future share repurchases.

Now please turn to Slide 18 as I hand the call back to Mike for his closing comments.

Michael Happe

Thanks, Bryan. Before we move on to your questions, I want to spend a few minutes on how we see the longer-term growth opportunities for Winnebago Industries. Our strategic intent is centered on three pillars: Strengthening and growing our core RV and Marine businesses, building a more meaningful aftermarket business around the customer journey, and selectively expanding into strategic mobility markets, where our capabilities give us the right to win. Together, these pillars are designed to create more durable growth and a more resilient earnings profile over time.

Our first priority is the core, and that starts with selling more RVs and boats, predominantly in North America and doing so profitably. We are focused on optimizing our market share and earnings performance, whether industry demand remains near current levels or ultimately recovers towards more normalized conditions. We know our core business is significantly stronger today than it was at comparable industry volumes more than a decade ago. We have a stronger portfolio of brands and products, talented and experienced teams, broader participation across the RV market and a relevant marine platform that adds both growth potential and greater balance to our portfolio. All of this gives us substantial upside in a market recovery. But importantly, we are not waiting for a recovery. We are driving new products, attacking costs, improving quality and execution and working closely with our dealers to gain profitable share in the market we have today. Our expectation is that each of our organic businesses get stronger while preserving the significant earnings potential that exists when industry conditions ultimately improve.

Our second pillar is aftermarket. We want to be more present and impactful throughout the entire customer journey, including well beyond the initial purchase. That means building incremental revenue and profit opportunities across parts, accessories, service, solutions and experiences. Our existing factory service operations provide a foundation, but our ambition is broader. We are allocating real dollars and talent to this opportunity in fiscal 2027, with the expectation that the benefits will build in fiscal 2028 and beyond. Over time, we believe a larger aftermarket business can generate incremental and more recurring revenue, attractive margins and stronger customer loyalty, while also reducing some of our exposure to new unit cyclicality by serving the growing installed base of Winnebago Industries products already in use. Simone Silva's recent appointment to lead these efforts provides dedicated leadership as we build those capabilities.

The third pillar is strategic mobility, where we see two particularly attractive areas of opportunity. The first is strategic technology verticals around house electrification and mobile and portable power. Lithionics has been an important first step, and we intend to build on that foundation over time through additional power and energy solutions that can serve both our existing businesses and select adjacent applications.

The second is building a presence in select specialty vehicle markets, where our history, engineering and manufacturing capabilities can be relevant and differentiated. We already understand key elements of these markets through our past experience at Winnebago and Newmar, and we see the potential to participate selectively in areas that can offer less cyclical demand, attractive margins, greater B2B exposure and opportunities to develop and apply new technologies. Across all three of these pillars, we will be disciplined, but we will not sit still. We feel very good about the earnings potential embedded in our existing RV and boat portfolio when industry demand eventually recovers, but our strategy cannot depend on the timing or magnitude of that recovery. We are aggressively strengthening the core today, while investing in aftermarket and strategic mobility opportunities designed to create more durable growth, stronger margins and a more resilient earnings profile over time. We enter fiscal 2027 confident in the opportunity ahead and clear-eyed about the work required to capture it. Our focus now is on execution.

With that, Bryan and I would be happy to take your questions. Operator, please open the line for the Q&A session.

Operator

[Operator Instructions]

And our first question comes from James Hardiman of Citi.

Question-and-Answer Session

James Hardiman

I was hoping you could help us, sort of, bridge just at a high level. Obviously, the most recent retail numbers aren't very encouraging, right, call it, down mid-teens, and if anything, interest rates have gone up since we've seen those numbers. So I'm curious to hear sort of how you think that's trended even since the most recent data. But just maybe connect, where we are from a retail perspective to what you're modeling or guiding with respect to earnings growth up almost 10%. And obviously, there's a lot of steps along the way, right? The retail wholesale relationship, the improvement in retail, presumably based on easier comps, but help us bridge that in any way you can.

Michael Happe

Good morning, James. This is Mike. Well, let me start with your comment on retail in the market currently, and we would agree that retail continues to be consistently challenged in the area that you referenced from a number standpoint. That being said, we have recently been gaining momentum on market share across several of our brands and businesses and feel optimistic that as we go into fiscal '27 regardless of what the market ultimately ends up doing that our businesses have a strong chance of continuing to sustain current market share position and in several places grow it.

The midpoint of our fiscal '27 guidance on the top line, I believe, is a 1% increase in sales over fiscal '26 actuals. And so we are acknowledging that top line growth will be challenged. And our ambition is to maintain the net sales at least at the fiscal '26 level, if not greater. Some of that top line growth will come from businesses like Grand Design Motorized, Winnebago Towables, we believe some of the work we've done on Grand Design Towables in terms of turns improvement helps us position ourselves well with the dealers in the coming year.

The profit contribution on the bottom line, where the midpoint of our guidance for fiscal '27 EPS, I believe, is a 9% increase over fiscal '26 full year actuals. That is a combination of what we believe will be margin improvement incrementally due to many activities, including material cost savings, stronger operational efficiency combined with, as Bryan described, a lot of work in the rest of the P&L on cost management, specifically around SG&A, but really almost all lines of the income statement.

So your question is a fair one. We don't anticipate much relief from the market being challenged, but we believe we have enough levers within our control to issue the guidance that we did. And if we execute, we feel that's realistic.

Bryan Hughes

And the only thing I'd add to that, if I could, Mike, is pointing to fiscal '26 as some evidence that we can outperform what the market did. If you look at retail and wholesale, both were down significantly at the industry level in our fiscal '26. And what you saw us deliver was top line down 3% roughly and earnings that were up year-over-year. So we feel good about our performance in '26, and it certainly gives us confidence as we head into '27 to do so again.

James Hardiman

Got it. And then maybe if you could help us with phasing a little bit. Obviously, you gave us an indication of how to think about the first quarter, maybe down modestly, when do you expect to sort of bend that curve back towards growth? And I know you gave us, sort of, how to think about the industry in terms of calendar '27, I guess, maybe part of the answer, your fiscal '27 is obviously different than your calendar '27 and with the first quarter being, sort of, the key delta between those two. But maybe connect a couple of those dots for us, that would be great.

Bryan Hughes

Yes. Thanks, James. As you know, Q1 and Q2 are our seasonally lowest quarters. And so that's not going to be the key driver. We pointed out Q1 being modestly lower to on par from a margin perspective, but down in sales. So that is going to equate to an EPS that is down year-over-year. And then you've got Q2, which is a pretty immaterial quarter for us. So if you look at the first half, that's not likely where it is to occur. We think we feel better about the second half of our year being the seasonally strong part of the year as well.

Operator

And our next question comes from Joseph Altobello of Raymond James.

Joseph Altobello

First question on the $70 million to $80 million of gross savings that you guys you talked about earlier. Can you break that down in terms of what sort of areas that's coming from? And maybe how much of that gets reinvested, do you think?

Bryan Hughes

Good morning, Joe. Thanks for the question. I'll start and give you some better context around that. The timing of the initiatives is going to vary. The benefits are expected to build as implementation progresses and operations stabilize. Mike alluded to some of that in his comments. With certain initiatives contributing through fiscal '27 and others extending into fiscal '28 and even fiscal '29. We're not providing annual savings targets at this time. We gave you a cumulative $70 million to $80 million of what those initiatives that we're undertaking in '27 should produce.

A good portion, I'd say nearly half of the cost savings initiatives target is linked to structural cost reductions across our business. So in other words, nonmaterial-related in various stages of deployment. Our intent and expectation is that many of these benefits would represent incremental profitability improvements, structurally improving our profit profile over time. Some of the opportunity has already seen action. Some actions have a longer tail to them, and won't be completed until later even in fiscal '28 with benefits accruing in '29 as we stated. Vertical rationalization is a good example of the longer tail.

But we have already taken some actions that will contribute to profit improvement in fiscal '27, such as the projects to consolidate locations in the Winnebago Motorhome business and consolidating the Winnebago Towable campus onto the Grand Design campus, which we have already mentioned earlier today. You'll also note that our guidance included expected restructuring charges of approximately $6 million to occur in fiscal '27. And these charges will result in cost structure reductions that will help to achieve a portion of that $70 million to $80 million in fiscal '27. So you can expect us to have an aggressive approach to cost structure optimization and profitability enhancement during the fiscal '27.

Joseph Altobello

Got it. Very helpful, Bryan. Maybe just to pivot off of that in terms of your outlook for fiscal '27. You mentioned your wholesale outlook, your turns are at 1.8, and I know you guys have talked about getting above 2. So is it reasonable to assume that retail will outpace shipments next year?

Michael Happe

Joe, this is Mike. Our guidance on calendar year '27 wholesale shipments would obviously suggest a flat to slightly down environment versus calendar year '26. We believe there is a possibility that there could be a little more destocking done by both the RV and marine dealer channels. The turns goal that we have for fiscal '27 remains at 2x for a consolidated number for each of our segments. Now we have some businesses like Winnebago Towables, where we continue to load the channel with new products, where we continue to upgrade dealers as partners in that particular initiative. In other businesses like Newmar, where inherent turns are just slightly -- historically lower than 2x, that we will not reach that level. But we still are targeting 2 turns. There's a seasonal element to that throughout our fiscal year, but we see no reason why we can't achieve that 2 turn level when we're having this conversation a year from now.

Operator

And our next question comes from Craig Kennison of Baird.

Craig Kennison

Mike, on the aftermarket side, what do you need to build a more meaningful business in that category? And maybe you could help us frame what success looks like at maturity.

Michael Happe

Yes. Craig, thanks for the question. Obviously, this morning, you heard near the end of our opening comments that we are putting more emphasis on the aftermarket element of our business. We haven't talked about that enough in the past. We sell parts today. We have several factory service centers today with dozens of service bays. So we are already participating in the aftermarket journey with our customers in several ways. We need to do more of it. We believe we have permission and brand credibility with our consumers to be able to support them in their experience, complementing our dealers' capabilities along that journey.

And so Craig, we have active teams today around selling more parts and accessories. We have a team around selling more factory service. We've got a team around financial services. We are exploring a number of different avenues to potentially create larger, more profitable, less cyclical revenue streams in the future. But as my comments indicated, this will be a multiyear journey. We recently appointed a great teammate named Simone Silva to be our dedicated Vice President of the aftermarket business here at the company, and she will be working across our enterprise and across our brands to build the strategies and action plans and candidly, the tools that we need to do so.

So our aftermarket business today is buried within our segment results. It's not separated and lifted up, but we believe there's an opportunity to add some energy to those efforts that we already do today and potentially create some incremental pathways to aftermarket growth in the future. So teasing the market a bit, I understand. But I want the market to understand that this is a real strategy here at the company to make this a bigger part of our performance in the future.

Craig Kennison

Yes. And I guess a similar question on the, let's call it, the mobility strategy and some of the non-RV end markets. What is the potential there? And what assets do you have to execute there?

Michael Happe

Yes. Craig, we talked about two elements to strategic mobility. One is what we internally call portable power. We invested in a company called Lithionics in 2023. We believe Lithionics is one of the leading mobile battery solutions and battery management systems companies candidly in the world for recreational and mobile portable power solutions. As consumers make a decision to get away from gas or diesel generators around their products, they are converting to essentially battery or portable power systems. Lithionics has been an excellent addition to our portfolio. We serve ourselves with their components and their product catalog for our brands, but we are also selling to other OEMs in the RV industry, and we are advancing on our progress to penetrate other adjacent markets, such as work trucks, service vehicles and other critical infrastructure in the U.S.

We intend to add more weight around that portable power offering in the future, both organically but possibly inorganically, should the right opportunity present itself. And we believe this is a higher margin, less cyclical adjacent opportunity for us that strengthens candidly our capabilities to electrify our own products in the future as that technology and the consumer merge together. So that's the first element.

The second element is specialty vehicles. Winnebago Industries has a long history in specialty vehicles. One of our largest competitive peers has a big presence in specialty vehicles. We believe that there are specific segments and specialty vehicles where we have the ability to be relevant and win, and we have the in-house capabilities, particularly in our Motorhome businesses, Winnebago and Newmar to be able to contribute to that path. And again, it allows us to get after adjacent markets with higher margin, less cyclical, more durable growth opportunities that leverage very closely our current capabilities, including our relationships with chassis manufacturers, engine manufacturers and the rest of the supply chain. So more work is being done on that. And again, that's an extension of what we have already done in the past, particularly around our Winnebago brand of specialty vehicles that some of you know we have been in for many, many years, if not decades.

Operator

And our next question comes from Patrick Scholes of Truist.

Charles Scholes

I know you touched on this more from a high level, but can you give a little bit more granularity on expectations for share gains and/or losses, particularly in Grand Design and Winnebago brands for fiscal '27?

Michael Happe

Yes. Good morning, Patrick. This is Mike. We're not sharing market share targets for any of those businesses. I'll just try to efficiently quickly give you an update on the momentum. We did mention in the script that Winnebago Towables continues to advance its market share, I believe, up to 1.7% at the end of August. And we believe that progress has even continued in the last couple of months, primarily through a combination of great new products and the channel network that is increasingly supportive and even upgraded in terms of its quality.

Grand Design Motorized market share continues to advance. I believe we also shared a number in our materials this morning as well in the mid-3s, growing closer to 4% in terms of retail market share unit-wise. And that product line continues to expand, dealer support continues to grow. We're getting good feedback from consumers. And so we expect that business to grow as well. We're particularly pleased in the stabilization of Grand Design Towables market share. Grand Design travel trailers here recently has, in fact, grown market share again. And so a lot of the work that the Grand Design Towables team has been doing on their product line is a testimony to that. We're also introducing more innovation to the market. I mentioned some of that with the composite roof technology as well as increased quality in many places across the Grand Design Towables brand. All of that is combining for overall Grand Design share to stabilize the travel trailer share to begin to grow there.

Barletta is the other business that I'll mention. 9.7% market share at the end of fiscal '26, a 70 basis point increase over the end of fiscal '25 in a down market with intense legacy competitors and several new startups in the Pontoon space. I believe the model year '27 Barletta product line is as good as any model year lineup that we've ever introduced. We continue to have strong dealer support. And we believe that, that is a business, while solidly in the #3 aluminum pontoon slot in the industry can continue to grow share year-over-year as long as we execute our playbook.

So we believe there are a lot of opportunities to continue to grow share. It won't be easy. Our competitors won't give up that showroom space. We'll have to fight for every retail consumer in this challenged environment, but the businesses are pulling the right levers on innovation and affordability and the way we're partnering with our retailers.

Operator

And our next question comes from Tristan Thomas of BMO Capital Markets.

Tristan Thomas-Martin

Bryan called out selective price adjustments. Maybe just, kind of, clarify or quantify what those are?

Bryan Hughes

Yes, Tristan, we don't historically get specific in what exactly comprises the price increases. It's a dynamic environment, as you well know. I would say that across the Towables business, in particular, we had still heightened market support in one form or another during fourth quarter. So I think that, that is where it was most notable on the market support. The pricing itself was really elevated in previous quarters in the reaction to -- and I'm going back into Q1, Q2 of fiscal '26, where we are still reacting to marketplace passing through tariff impacts. I'd say it moderated in Q3 and Q4. and it's really specific business by business, but I don't care to break things down at that brand level.

Tristan Thomas-Martin

Okay. And then just a question on the Motorized product lineup. How should we, kind of, think about that, like, evolving moving forward? And then how does kind of Class A fits into that in terms of mix.

Michael Happe

Tristan, this is Mike. We really think about the Motorized segment strategy across all three brands. And what's fantastic in 2026 compared to where we were a decade ago is we have three brands that cover many, many different segments of Motorized product. Obviously, Class A Gas and Diesel, we're very pleased with our Super C progress, but we're also, as you know, very active in traditional Class Bs and Class Cs. So we have three brands across all of the Motorized segments in the market, and each of them has a series of swim lanes, which are complementary to the other brands. There are some cases, certainly primarily between our Winnebago and Grand Design brand, where their Class B and Class C offerings are a little bit more competitive with each other. But we don't think that's a bad thing. In an industry structure where there are multi-brand dealers. It's okay to have dealer distribution points, with multiple brands across a category like Motorize.

We don't believe the Motorized category is going to grow significantly in our fiscal '27. So any top line growth will really need to be the result of market share. We believe that market share will come from the Super C segment. It will come from the Class C segment, primarily around the Lineage line and some of the new products that Winnebago has introduced specifically here recently, the Elora and the Resa. But we believe that our innovation in several spots, the Arka from Winnebago is a good example of that, combined with price points that cover a broad range make us an attractive set of brands to look at. So today, with 3 brands in the Motorized segment, we believe we're well positioned, at least on a historical basis. But it's a very competitive and intense environment right now, and we'll need to compete very smartly going forward.

Operator

And our next question comes from Bret Jordan of Jefferies.

Patrick Buckley

This is Patrick Buckley on for Bret. I think you called out that the dealer inventory quality remained within acceptable ranges. Could you give some more color there around broader dealer health heading into the seasonally slow winter months? Any notable changes in willingness to take incremental inventory or any signs of increased consolidation across the channel?

Michael Happe

I'll comment on the health of the inventory and maybe Bryan can offer some comments on what we do to monitor the financial health of our dealer partners and other trends. We're pleased with the quantity of dealer inventory across both the RV and marine brands that we have in our portfolio. We are carefully monitoring the -- what I call, the quality of the inventory, which is really a proxy for aged -- the age of the inventory. There are usually 3 model years of inventory in the field at any one time, the current model year '27. Then there's model year '26 and model year '25 inventory. The model year '25 inventory is actually at a very low percentage of our total field inventory. In fact, model year '25 is lower today than a year ago where we were measuring model year '24 as that last bucket. What we are seeing in this particular time of year is a little more hesitation from dealers to take the latest model year product, partially because of their concern about retail conditions going forward, but also because they are comfortable with the model year '26 inventory that they have and that they are focused at working down.

So overall, the quantity is in a good place. The quality of the aged inventory is probably a little bit more weighted on model year '26 at that time, that middle bucket, but we think we'll see that transition happen from '26 to '27 here over the coming months, particularly in the southern part of the U.S. where retail conditions will still be conducive to moving units. Bryan?

Bryan Hughes

On your question on dealer health, that's something that we continue to monitor very closely. We have procedures inside and partnerships with the floor plan lenders specifically to make sure that we're well informed of the status of where dealers are. Now we won't comment on specific dealers, of course. But what I can say is that no dealer represents more than 10% of our consolidated sales. And so we are appropriately diversified as it relates to any risk tied to the health of the channel. We have stated historically, and we'll reiterate here that we believe the industry has too many rooftops to support the current level of retail units across the industry around that 300,000. So we wouldn't be surprised to see a reduction in the number of rooftops with some of the lower volume locations being pared. And so that's the way we are currently thinking about dealer health.

Patrick Buckley

Got it. That's helpful. And then as a follow-up on the pricing question, could you talk a bit more about maybe a ballpark range of what same-SKU inflation might look like in '27 based on where things are today?

Bryan Hughes

Yes, this is Bryan again. We're expecting in the 2.5% to 3.5% range. We do estimates as part of our planning process here in the fall, and do deep studies, and that's what it currently looks like. There's a lot of dynamic sort of inputs as it relates to our cost environment, all of which we're monitoring closely. But that's what we're currently planning on. We're going to work hard, of course, to on some of the cost savings initiatives across our materials that we referenced earlier. We've got our strategic sourcing group that is working closely with all of our business units and the purchasing functions within those businesses to make sure that we are capturing appropriately the opportunities across our various product lines. So we're currently expecting that 2.5% to 3.5% range, though.

Michael Happe

The only thing that I would add is there are spots in the business where inflation is running meaningfully higher than the range that Bryan provided, particularly around certain types of commodities. The metal space is a good example. We've seen significant cost escalation in the aluminum category as an example. And so that inflation range really varies by product line, by brand and even by material. And that all informs along with the retail marketplace our ability to manage margins and profitability through pricing going forward.

We'll take one more question, please.

Operator

Our next question comes from Scott Stember of ROTH MKM.

Scott Stember

Just high level, looking at your expectations for a flattish market in calendar -- '27. Obviously, things are still trending down in that mid-teen range and inflation and interest rates and fuel costs. Is there anything that is giving you comfort that we could get or we see some kind of a bottoming or re-acceleration in demand, particularly as we get to the spring and summer selling season, which will be the back half of the year?

Michael Happe

Yes. Good morning, Scott. Thanks for the question. Comfort is an interesting word, but I would tell you that we do believe that the consumer has been resilient in several parts of the economy, particularly around experiences and travel. Consumers continue to want to be outdoors. We mentioned in the call that engagement by RV-ers, campers, boaters continues to be very solid. And so we believe that there is a consumer engagement level and the resiliency as to what they'd like to spend their discretionary dollars on that remains in place for a stabilization and some day, a potential recovery of the outdoor recreation market. There's no doubt that we've certainly seen some factors rise significantly and unexpectedly over the last 9 months even. Gas prices would be the best example of that, in part due to some of the global challenges around energy and refining that everybody is aware of.

We are not anticipating at this time for our fiscal '27 that some of those elements that we saw rise in fiscal '26 would get meaningfully worse. So -- but you know as well as I do, Scott, that there continues to be a level of uncertainty around the marketplace that we have to manage. And as I said about 10 times, I think, in our prepared comments, we have to stay focused on levers within the business that we can control. And while we're offering what we believe to be fair sober assumptions about the future in terms of the industry and our own guidance. We believe that if those market assumptions hold that we have the ability to deliver stronger EPS on a relatively flat market in the next fiscal year, so we'll see. We're going to work very hard every day to, again, control what we can control.

Operator

This concludes our question-and-answer session. I'd like to hand it back to Joan Ondala for closing remarks.

Joan Ondala

Thank you all for joining us this morning and for your continued interest in Winnebago Industries.

Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.