Boomers herald good times for Winnebago-Barron's

NEW YORK, June 13, 2004; Reuters reported that the sheer number of baby boomers set to pass the age of 50 over the next few years should offset concerns that rising gas prices and pending interest rate hikes will hurt sales of Winnebago Industries Inc.'s recreational vehicles, according to Barron's.

In an interview with the paper, Winnebago's Chief Executive Officer Bruce Hertzke notes that motor home loan rates are currently at a historical low and the average Winnebago customer has about $60,000 in annual income.

"Even with rates 2 to 2.5 percentage points higher, we could still have a very good business," he said.

Investors are also too concerned about rising gas prices, according to Jason Schrotberger, a portfolio manager at Turner Investments, which owns shares in Winnebago.

"The reality is fundamentally different from the sentiment shifts we've seen (on Winnebago) in the last four to six months," he told Barron's. He said that increased gas prices will add costs by about $300 to $400 a year to the average owner.

"It's a drop in the bucket," Schrotberger said.

Shares of Winnebago, the country's largest maker of motor homes have come under pressure in recent months. Last month the stock fell a third to $25 from a 52-week high of $38. They have since bounced back somewhat to $29.36,

While Hertzke declined to give earnings guidance, he told Barron's that "my board expects us to do as well or better" than the industry. He said operating-profit margins should range from 11 percent in good times to 9 percent in weak times.