THO 10-K & 10-Q changes, risk factors and insider trading

The following risk factors should be considered carefully intogether addition towith the other information contained in this filing.Annual Report on Form 10-K.

The risks and uncertainties described below are not the only ones we face and represent risks that ourmanagement managementcurrently believes are currently material to ourthe Company and ourits business. Additional risks and uncertainties not presently known to us or that we currently deem not material may also harm our business. If any of the following risks actually occur, our business, financial condition orcondition, results of operations or cash flows could be harmed.

The RV industry has historically been characterized by cycles of growth and contraction in consumer demand, generally reflecting prevailing overall economic and market conditions (such as the level of inflation, interest rates and tariffs), consumer sentimentsentiment, andconsumer behavior and demographic conditions which affect disposable income for leisure-time activities. ChangesThese changes can impactaffect the RV industry suddenly and severely.significantly. Consequently, the results of any prior period may not be indicative of results for any future period. Furthermore, if RV industry RV sales were to decline to levels significantly below our planning assumptions, the decline could have a substantial adverse effect on our financial condition, results of operations and cash flows.

In addition to the cyclicality of the RV industry cyclicality,industry, we have experienced, and expect to experience in future periods, significant variability in quarterly production rates, sales andsales, net income and cash flows as a result of annual seasonality in our business. Because recreational vehicles are used primarily by vacationers and campers, demand, salessales, profits and profitscash flows in the RV industry generally decline during the fall and winter months, while demand, salessales, profits and profitscash flows are generally highest during the spring and summer months. Various factorsfactors, suchincluding aseconomic conditions, desired dealer stocking levels, supply chain disruptions and constraints in the labor pool, supply chain disruptions, economic conditions and desired dealer stocking levels have disrupted, and may disrupt in the future, the historical trends in the seasonality of our business in both North America and Europe.

Our business is structured, particularly in the United States, to quickly align production rates and our cost structure to meet rapidly changing market conditions. However, if we are unable to ramp production,production and the corresponding workforce,workforce up or down quickly enough in response to rapid changes in demand, we may not be able to effectively manage our costs, which could negativelyadversely impactaffect operating results, and we may also lose sales and market share.

Due to the interconnectedness of the global economy, the challenges of a financial crisis, economic downturn or recession, trade policy volatility, geopolitical tensions, armed conflicts, sanctions, export controls, natural disaster, war, geopolitical crisis,disasters, public health emergencyemergencies or other significant eventevents in one area of the world can have a sudden material adverse impacteffect on marketsglobal aroundmarkets, international trade, supply chains and the world.regions in which we operate and sell our products. RV industry sales volume in our key markets can be volatile and could decline if there is a financial crisis, recession or significant geopolitical event. Our results of operations are generally sensitive to changes in overall economiceconomic, political and politicalgeopolitical conditions, including recessionary conditions, inflationary or deflationary pressures, changeschanging intrade tariffpolicies, rate,tariffs, sanctions, export controls, geopolitical fragmentation, restrictions on cross-border commerce, prolonged high unemployment rates,unemployment, significant changes in the cost and/orenergy availability of fuel or energy,prices, consumer confidence, interest rates, restrictions and/or shortages of natural gas or other fuels, terrorismterrorism, military conflicts and militaryother conflicts.disruptions affecting the global economy. Historically, we have seen that in times of economic uncertainty, consumers who have less discretionary income generally defer spending on high-cost, discretionary products, such as RVs. Recently,In recent periods, we have seen demand for RVs remain depressed amid ongoing conflicts, inflation, persistently higher interest rates, political and trade policy uncertainty and numerous other macroeconomic indicesindicators whichthat have generally remained challenging in the regions in which we operate. If economic and political conditions worsen and RV salesdemand continues to decline, our operating results and financial condition wouldcould be negativelyadversely affected.

The RV industry in which we operate is highly competitive in both in North America and in Europe and our requirements as a public company may put us at a competitive disadvantage.

The RV industry is generally characterized by relatively low barriers to entry, which results in a highly competitive business environment. According to Stat Surveys and CIVD, respectively, there are approximately 80 RV manufacturers in the U.S. and Canada and approximately 30 RV manufacturers across Europe. Competition within the industry is based uponon price, design, value, quality, service, brand awareness and reputation, as well as other factors. Competitive pressures have, from time to time, resulted in a reduction of ourreduced profit margins and/or in our market share. In periods of economic downturn, these competitive pressures can increase as RV manufacturers compete for a share of a smaller RV market. Sustained increases in these competitive pressures could have a material adverse effect on our results of operations. In addition, as a public company, we are required to disclose certain information that may put us at a competitive disadvantage compared to certain of our competitors who are either non-publicprivately owned or are not required to disclose specific industry-related information due to the immateriality of that information to their parent company’s consolidated operations.

Due to the anticipated long-term interest in the RV lifestyle, a number of start-up companies in North America, and certain automotive manufacturers, in both North America and Europe, have in the recent past entered the RV industry within the last few years and introduced products that directly compete with our products. If existing or new competitors develop products that are superior to, are more innovative than, achieve better consumer acceptance than,than or are offered at a lower net price to dealers than our products, our market share, sales volume and profit margins may be adversely affected. NotIn only does our Company compete against numerous existing RV manufacturers, butaddition, a number of our operating subsidiaries compete directly compete with each other.

In addition to direct competition from other RV manufacturers, weWe also continuously compete against consumer demand for used recreational vehicles, particularly during periods of economic downturn. Increased availability of used recreational vehicles and significant price differences between new and used recreational vehicles, as a result of an economic downturn or otherwise, could have a material adverse effect on demand for our products and our results of operations. We also compete with other discretionary leisure and vacation alternatives. Changes in the availability or relative value of these alternatives could reduce demand for new recreational vehicles and adversely affect our sales and profitability.

FluctuationsIncreases in the pricescost of raw materialmaterials and component parts maycould adversely affect our business.business, financial condition and results of operations.

Certain key components are currently produced by only a small group of suppliers that have the capacity to supply large quantities, primarily: (1) motorized chassis, where there are a limited number of chassis suppliers, and (2) doors, towable frames, slide-out mechanisms, axles and upholstered furniture for our recreational vehicles, where LCI Industries is a major supplier for these items within the North American RV industry.

Continued consolidationConsolidation within our North American RV industry supplier base, including announced or future mergers, acquisitions or other strategic transactions involving significant key component suppliers, could reduce the number of available suppliers for certain products, increase supplier baseconcentration, inhibitsenhance the bargaining position of our suppliers, inhibit our ability to source components from alternative supplierssuppliers, and could result in increased component costs or inadequate supply. For example, in June 2026 Patrick Industries and/or LCI Industries, two of the largest component suppliers to the North American RV industry, announced a lackproposed ofmerger adequatewhich, supply,if whichcompleted, inwould turnfurther increase supplier concentration within our industry. These conditions may result in decreased margins, higher wholesale product costs or limited production output, which could,could ultimately,ultimately result in lower demand for our products, decreased sales and reduced operating results.

Our motorized chassis suppliers may need to substantially modify their product offerings to comply with regulations related to emissions, fuel economy, autonomous driving technology, environmental and other regulationsregulations, which could result in increased costs and/or a lack of adequate motorized chassis supply to us, which in turn may result in higher wholesale product input costs and decreased margins, which would have an adverse impacteffect on our financial condition and results of operations.

Product recalls, customer satisfaction actions and complying with our recall obligations for both our products and for component parts supplied by vendors could adversely affect our financial condition and harm our reputation.

We provide warranties on the products we sell. These warranties vary depending on the type of product and geographic location of the sale; however, in general, our warranties promise, within certain specified time periods following a retail sale, that we will repair, replace or adjust parts on our products that are not performing within acceptable standards or tolerances. These warranties extend to some, but not all, of our vendor-supplied raw materials and component parts as well. Estimated warranty costs are accounted for at the time of product sale and adjusted on a quarterly basis to reflect our best estimate of the amounts necessary to settle existing and future claims on our products. An increase in actual warranty claim costs as compared to our estimates could result in increased warranty liabilities and expenseexpense, which could have an adverse impacteffect on our earnings.

Government safety standards require manufacturers to remedy issues related to vehicle safety through safety recall campaigns, and we regularly engage in voluntary recalls when we determine our products may have a safety issue. Issues subject to recall include both materials and workmanship from our companies as well as component parts supplied by vendors, arising from their quality issues or otherwise. The costcosts of certain recall and customer satisfaction actions have been substantial in the past and future recalls or customer satisfaction actions to remedy issues in products that have beenpreviously sold could also be substantial and could have a material adverse effect on our financial condition and results of operations. In addition, multiple recalls to address safety or significant operating concerns could erode consumer confidence in our brands and adversely affect our reputation or the public perception and market acceptance of our products, resulting in lower sales and ancould adverseadversely impact onaffect our business and results of operations. Although we maintain appropriate reserves for such recall contingencies, from time to time we have been and likely will again be faced with specific campaigns that result in material expense. To mitigate this risk, we endeavor to compel our suppliers to maintain appropriate levels of insurance coverage and agree to commercially reasonable indemnification requirements. Our efforts may not be successful and the failure of suppliers to maintain sufficient insurance coverage or provide meaningful indemnification protection could result in increased expense and adversely affect our financial condition and results of operations.

We are subject, in the ordinary course of business, to litigation involving product liability, consumer protection and other claims against us. In North America, we generally self-insure a portion of our exposure to product liability and certain other claims and also purchase product liability coverage above our self-insured retention. In Europe, we generally fully insure similar risks with insurance offering relatively low deductibles and premiums. Not all risks we face are covered by insurance, nor can we be certain that our insurance coverage will be sufficient to cover all future claims against us. Any material change in the aforementioned factors could haveadversely an adverse impact onaffect our operating results. Any increase in the frequency and/or size of claims, as compared to our experience in prior years, may cause the premiums that we are required to pay for insurance to increase significantly, may negativelyadversely impactaffect future self-insured retention levels and may also increase the amounts we pay in punitive damages, not all of which are covered by our insurance policies.

While we record, and adjust on a quarterly basis, reserves for known claims or possible claims to reflect our best estimate of the amount necessary to settle the claim, litigation is inherently unpredictable by its nature and final adjudications may be materially worse than our estimate.

The loss of our largest independent dealer or an increase in independent dealer consolidations could have a material negativeadverse effect on our business.

Sales to FreedomRoads, LLC accounted for approximately 14.0%13.0% of our consolidated net sales for fiscal 2025.2026. During recent years, FreedomRoads, LLC has acquired a number of formerly independent RV dealerships. The leverage to negotiate better terms with us arising from FreedomRoads, LLC’s acquisitions or the loss of independent dealers could have a material adverse effect on our business. In addition, deterioration in the liquidity or creditworthiness of FreedomRoads, LLC could negativelyadversely impactaffect our sales and accounts receivable and could, in the event of a financing default, trigger repurchase obligations under our repurchase agreements, which would have a significant adverse effect on our liquidity and results of operations.

Recently, a number of other U.S.-based independent dealers have acquired, and continue to acquire, formerly independent RV dealerships, resulting in further independent dealer concentration and improved negotiating leverage for these multi-location dealers. Continued consolidation in the U.S. independent dealer network could negativelyadversely impactaffect our sales or gross margins and increase the concentration of our exposure under repurchase obligations related to these independent dealers.

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 StatisticalStat Surveys, Inc. (“Stat Surveys”), for the six months ended June 30, 2025,2026, THOR’s current combined U.S. and Canadian market share based on units was approximately 39.1%36.8% for travel trailers and fifth wheels combined and approximately 48.3%49.8% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”),ECF, EHG’s current market share for the six months ended June 30, 20252026 based on units was approximately 26.1%27.0% for motorcaravans and campervans combined and approximately 17.3%16.6% for caravans.

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$154,632 in fiscal 20252026 were made primarily for purchases of land, production building additions and improvements and replacingreplacements 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 2025,2026, 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,I, Item 1A “Risk Factors” of this Report.

Significant Fiscal 2026 and Fiscal 2025 Events

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 iswas 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 havehad the option to accelerate its previously capitalized and unamortized U.S. research and development costs over a one or two-year period.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.

THOR’s total North American RV backlog as of July 31, 20252026 increased $200,352,$115,156, or 15.1%,7.5%, to $1,529,634$1,644,790 from $1,329,282$1,529,634 as of July 31, 2024,2025. with theThe increase drivenin backlog is primarily bya result of an increase in year-over-year orders for North American MotorizedTowable backlog, which was adversely impacted at July 31, 2024 by lower retail sales and dealer and consumer concerns over higher interest costs at that time.products.

In SeptemberJune 2025,2026, RVIA reconfirmedissued itsa June 2025revised forecast for calendar year 20252026 North American wholesale unit shipments. Under aRVIA's most likely scenario, towable and motorized unit shipments are projected to increase tobe approximately 303,100277,400 and 33,800,36,600, respectively, for an annual total of approximately 337,000314,000 units, upa 1.0%decrease of 8.2% from the 20242025 calendar year wholesale shipments. The RVIA most likely forecast for calendar year 20252026 could range from a lower estimate of approximately 320,400300,000 total units to an upper estimate of approximately 353,500328,100 units.

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.

The Company’s North American wholesale RV shipments, for the six months ended June 30, 20252026 and 2024,2025, to correspond with the industry wholesale periods noted above, were as follows:

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the six months ended June 30, 20252026 and 2024,2025, to correspond with the industry retail periods noted above, were as follows:

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 2026.2027. In addition, due to the impact of inflationary pressures, including the impact offrom highertariffs tariffs,and the Iran conflict, current interest ratesrates, 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, particularly in the fall and winter months which historically are lower retail sales periods.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,period; however, we currently believe the remainder of calendar 20252026, 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.

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, weWe believe many of thoseconsumers who have beenwere 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 are likely to continue opting for fewer vacations via air travel, cruise ships and hotels, while preferringprefer 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.

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 anypast and future increases in raw material or labor costs have had, and will continue to have, a negative impact on 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. WeDuring arefiscal closely2026, monitoringwe theintentionally impositiondid 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 newour products. Our margins were negatively impacted as a result and higherwill U.S.continue tariffsto 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 orbe 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 thatif we are oftenunable notto importing products or components directly but rather through third-party vendors and therefore do not have complete visibility regardingshare the timingburden orof impactfuture oninflationary cost increases across 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 alternativeRV supply sources with lower-priced components.chain.

Historically, we have generally been able to offset net cost increases over time,time. butHowever, given the size and nature of the tariffs currentlyimplemented insince early calendar 2025, and the processanticipated size and nature of beingany implementedfuture tariffs, it is more difficult and future tariffs being discussed, it may not be possible orless desirable for us to pass on the full impact of tariff increases immediately as we are conscious of the impact itsuch offset 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.

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 tariffsof maytariffs, havethe ongoing Iran conflict and the related disruption of shipping through the Strait of Hormuz, regulatory changes or supply chain constraints on the availability of goods.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.

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”).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%14.1% and 9.4%8.9% of the caravan and motorcaravan (including campervans) European marketmarket, respectively, for the six months ended June 30, 2025, respectively,2026, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Independent dealer inventory of our European RV products as of July 31, 20252026 was approximately 22,20020,500 units as compared to approximately 26,20022,200 units as of July 31, 2024.2025. 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 historichistorical seasonal levels, while campervanurban vehicle and towablecaravan inventory isremains slightly elevated.elevated, but improving.

Our European Recreational Vehicle backlog as of July 31, 20252026 decreasedincreased $425,201,$128,378, or 21.8%,8.4%, to $1,525,592$1,653,970 compared to $1,950,793$1,525,592 as of July 31, 2024, primarily due to improved chassis supply availability and a return to normalized dealer inventory levels at July 31, 2025.

Our European operations offer a full lineup of leisure vehicles including caravans and motorized products includingconsisting of small-to-large motorcaravans, urban vehicles,vehicles and campervans andas small-to-largewell motorcaravans.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.

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. FactorsIn 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. While confidence remains in our customer base, inIn the short term, we expect to continue to experience downwardrelatively stable market volume, but ongoing pressure on overallnet sales volumeprices and gross margins due to the current macroeconomiceconomic environment.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 positiveoptimistic due to favorable demographic trends and asdue to more people utilizeutilizing 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.

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 20252026 Caravan Salon show in Düsseldorf in September 2025,2026, experiencedwas near-recordonce attendance,again well attended and yielded strong sales, which demonstrates thea continuedsustained 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.

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. MaterialRaw material and labor costs are the primary factors determining our cost of products soldsold, and any future increases in theseraw material or labor costs couldhave negatively impacted, and are expected to continue to, negatively impact our profit marginsmargins. ifHistorically, 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 unable to offset those costs through a combinationconscious of productthe recontenting,impact materialsuch sourcingincreases strategies,likely efficiencywould improvements,have headcount reductions or raisingon the sellingretail pricesconsumer and their demand for our products by corresponding amounts.products.

While overall chassis supply has improved, disruptionDisruption in the sequence of chassis supply hasand the supply of other critical components has, in the past inhibited,past, and couldis incontinuing the future,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.

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.

Consolidated net sales for fiscal 20252026 decreasedincreased $463,918,$28,655, or 4.6%,0.3%, 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.2025. Approximately 32%34% of the Company’s consolidated net sales for fiscal 20252026 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% decreaseincrease in consolidated net sales in fiscal 20252026 is net ofincluded an increase of $54,492$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.

Consolidated gross profit for fiscal 20252026 decreased $111,321,$128,011, or 7.7%,9.5%, compared to fiscal 2024.2025. Consolidated gross profit was 14.0%12.6% of consolidated net sales for fiscal 20252026 and 14.5%14.0% for fiscal 2024.2025. The decreases in consolidated gross profit and the consolidated gross profit percentage in fiscal 20252026 compared to fiscal 20242025 were both primarily due to theunfavorable impact of the decreasechanges in consolidatedNorth netAmerican salesTowable coupledand withEuropean increasedproduct salesmix discounting.toward lower-margin products in addition to absorbing more material cost increases in fiscal 2026 as compared to fiscal 2025.

Selling, general and administrative expenses for fiscal 20252026 increaseddecreased $27,023,$19,158, or 3.0%,2.1%, compared to fiscal 2024.2025. This increaseslight decrease was primarily drivendue byto a reduction in incentive compensation costs in correlation with the increasedecrease in certainincome Corporatebefore andincome Europeantaxes selling,in generalfiscal and2026 administrativecompared expensesto asfiscal discussed below.2025. Selling, general and administrative expenses were 9.6%9.4% of consolidated net sales for fiscal 20252026 and 8.9%9.6% for fiscal 2024,2025, with the increase in percentage due to the combination of the decrease in consolidatedpercentage netprimarily salesdue to a decrease in the incentive and other compensation cost percentage in fiscal 20252026 compared to fiscal 2024 and the increase in costs.2025.

The increase in otherOther income, net of $31,949$32,910 for fiscal 20252026 as compared to fiscal 20242025 includesincluded an increase of $14,867$12,232 in the gain on the sales of property, plant and equipment in fiscal 20252026 as compared to fiscal 2024,2025, primarilya 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 gainsmarket onvalue fluctuations between the salesfiscal years and a favorable improvement in the operating results of certainour productionequity-method facilitiesinvestments of $4,849. These favorable changes were partially offset by an impairment charge of $7,822 taken in fiscal 20252026 relatedon tocertain theNorth strategicAmerican organizationalTowable restructuringassets ofheld thefor Heartlandsale towableat operations.July In31, addition,2026 the fiscal 2025 other income, net total includesand $12,153 of insurance income in fiscal 2025 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 720 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.

Amortization of intangible assets expense for fiscal 20252026 decreased $13,517,$6,868, or 10.2%,5.8%, to $119,027,$112,159, compared to fiscal 20242025 primarily due to a reduction in dealer network amortization, which is amortized on an accelerated basis and therefore decreases over time.

The decrease of $52,653,$57,470, or 15.1%,19.4%, in income before income taxes for fiscal 20252026 compared to fiscal 2024,2025, was primarily driven by the impact of the decrease in consolidatedgross netprofit salesnoted andabove, partially offset by the increasedecreases in selling, general and administrative expensesexpense and amortization expense and the increase in other income, net noted above.

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

The $13,850$18,381 increasedecrease in Corporate expenses included in selling, general and administrative expenses for fiscal 20252026 compared to fiscal 20242025 includesincluded increasesa decrease in compensation costs of $15,738,$15,856, primarily due to employee separation costs related to certain restructuring headcount reductions in fiscal 2025, and incentivea compensationdecrease in research and development costs of $7,854. In addition, the prior-year period included income of $17,012 related to matters discussed in Note 14 to the Consolidated Financial Statements.$7,326. These increasesdecreases were partially offset by decreasesan increase of $6,302 in stock-based compensation expense of $7,029, legal and professional fees of $8,521 (primarily related to third-party fees of $7,175 incurred in fiscal 2024 with the debt refinancing discussed in Note 12 to the Consolidated Financial Statements),certain dealer promotional costs of $6,517 and repurchase costs of $3,300 related to our standby repurchase obligations reserve due to reductions in both dealer inventory levels and repurchase activity compared to the prior fiscal year.costs.

The increasedecrease in total North American Towable net sales of 2.9%16.1% compared to the prior fiscal year resulted from a 6.2%20.7% increasedecrease in unit shipments and a 3.3%4.6% decreaseincrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increasedecrease in unit shipments was primarily due to the heightenedlower demand for the lower-cost travel trailer units relative to the prior fiscal year, as comparedtravel totrailer unit shipments decreased 22.4% from the prior year. According to statistics published by RVIA, for the twelve months ended July 31, 2025,2026, combined travel trailer and fifth wheel wholesale unit shipments increaseddecreased 6.3%11.5% compared to the same period lastending year.July 31, 2025. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 20252026 and 2024,2025, our retail market share for travel trailers and fifth wheels combined was 38.4%37.4% and 40.3%,38.4%, respectively.

North American Towable cost of products sold increaseddecreased $35,405$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 compared to $3,252,285, or 88.4% of North American Towable net sales, for fiscal 2024.2025. Changes in material, labor, freight-out and warranty costs comprised $27,822$439,013 of the $35,405$467,580 increasedecrease 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 and 80.2% for fiscal 2024,2025, with the reductionincrease includingprimarily 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 material cost percentage, primarily due to lower sales discounting, and the warranty cost percentage also improved.percentage.

Total manufacturing overhead increaseddecreased $7,583$28,567 in correlation with the increasedecrease in net sales and decreasedemployee slightlycost savings from towable organizational restructuring initiatives implemented since the prior fiscal year, but increased as a percentage of North American Towable net sales from 8.2%8.1% to 8.1%,8.8% as a result of the increaseddecreased net sales levels resulted in lower overhead costs per unit sold.sales. Variable costs included in manufacturing overhead increaseddecreased $7,746$22,946 in fiscal 20252026 compared to fiscal 20242025 asprimarily due to a result of the increasereduction in Northemployee Americanwage Towableand netbenefit sales.costs.

The increasedecrease of $69,590$140,399 in North American Towable gross profit for fiscal 20252026 compared to fiscal 20242025 iswas driven primarily by the increasedecrease in North American Towable net sales coupled withwhile the increasedecrease in the gross profit percentage, whichpercentage is due to the decreaseincrease in the cost of products sold percentage noted above.

The increasedecrease of $10,206$35,082 in North American Towable selling, general and administrative expenses for fiscal 20252026 compared to fiscal 20242025 was primarily due to the impact of the increasedecreases in North American Towable net sales and income before income taxes, which causedcausing related commissions, incentive and other compensation to increasedecrease by $7,679.$37,843. TheThis slightdecrease was partially offset by an increase in thesales-related travel, advertising and promotional costs of $6,777. The overall selling, general and administrative expense as a percentage of North American Towable net sales isincreased 0.2% primarily due to anthe increasedecrease in theNorth incentiveAmerican compensationTowable costnet percentage due to the increase in income before income taxes.sales.

The decreaseincrease in total North American Motorized net sales of 11.0%12.8% compared to the prior fiscal year resulted from ana 8.6%12.4% decreaseincrease in unit shipments and a 2.4%0.4% decreaseincrease 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.price. The decreaseincrease in unit shipments was primarily due to aan softeningincrease in current dealer and consumer demand incompared comparison withto the demand in the prior fiscal year. According to statistics published by RVIA, for the twelve months ended July 31, 2025,2026, combined motorhome wholesale unit shipments decreasedincreased 11.6%6.8% compared to the same period lastended year.July 31, 2025. According to statistics published by Stat Surveys, for the twelve-month periods ended June 30, 20252026 and 2024,2025, our retail market share for motorhomes was 47.7%48.5% and 47.8%, respectively.

The decreaseincrease in the overall change in product mix and price per unit within the Class A product line of 4.5%4.1% was primarily due to product mix changes, primarily a higher concentration inof fiscal 2025sales of the generally higher-priced diesel units as opposed to the more moderately-priced gas units as opposed to the higher-priced diesel units, in additionfiscal to higher discounting levels.2026. The decreaseincrease in the overall net price per unit within the Class C product line of 1.8%2.1% was primarily due to higherproduct discountingmix levels,changes and selective selling price increases, and the Class B product line increasedecrease of 2.7%1.6% was primarily due to increases from product mix changes andtowards selectivemore netmoderately-priced sellingClass priceB increases being partially offset by higher discounting levelsunits compared to fiscal 2024.2025.

North American Motorized cost of products sold decreasedincreased $203,040$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 compared to $2,168,010, or 88.6% of North American Motorized net sales, for fiscal 2024.2025. The changes in material, labor, freight-out and warranty costs comprised $188,009$255,278 of the $203,040$274,340 decreaseincrease primarily due to the decreasedincreased salesnet volume.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 compared to 82.4% for fiscal 2024,2025, with the slight increase primarily due to ana modest 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.

Total manufacturing overhead decreasedincreased $15,031$19,062 in correlation with the decreaseincrease in net sales butand remained the sameincreased as a percentage of North American Motorized net sales atslightly 6.2%.from 6.2% to 6.3%. Variable costs in manufacturing overhead decreasedincreased $14,829$16,947 in fiscal 20252026 compared to fiscal 20242025 primarily in employee costs as a result of the decreaseincrease in North American Motorized net sales.

The decreaseincrease of $67,206$5,216 in North American Motorized gross profit for fiscal 20252026 compared to fiscal 20242025 was driven by the decreaseincrease in North American Motorized net sales coupled withand the decrease in the gross profit percentage,percentage which iswas due to the increase in the cost of products sold percentage noted above.

This report includes certain statements that are “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon THOR,THOR and inherently involve uncertainties and risks. These forward-looking statements are not a guarantee of future performance.performance We cannot assure you thatand actual results will notmay differ materially from our expectations. Factors which could cause materially different results include, among others:

•the ability to realize anticipated benefits of strategic initiatives including realignments or other reorganizational actions;

•a shortage of necessary personnel for production and increasing labor costs and related employee benefits costs to attract and retain production personnel in times of high demand;

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 calendarthree yearmonths ended DecemberMarch 31, 2025,2026, THOR’s current combined U.S. and Canadian market share based on units sold was approximately 38.6%36.2% for travel trailers and fifth wheels combined and approximately 47.5%47.8% for motorhomes. In Europe, according to the European Caravan Federation (“ECF”), our European market share for the calendarthree yearmonths ended DecemberMarch 31, 20252026 was approximately 25.5%26.3% for motorcaravans and campervans combined and approximately 16.8%16.7% for caravans.

North American RV independent dealer inventory of our North American RV products as of JanuaryApril 31,30, 2026 decreased 8.2%13.7% to approximately 79,10079,200 units, compared to approximately 86,20091,800 units as of JanuaryApril 31,30, 2025.

As of JanuaryApril 31,30, 2026, we believe North American dealer inventory levels for most products are generally in line with the levels that dealers are comfortable stocking given the current retail sales levels and associated carrying costs. We believe dealers will continue to closely evaluate the unit stocking levels that they will elect to carry in future periods, which may be less than historical unit stocking levels, due to a combination of factors such as current retail activity, current RV wholesale prices as well as current interest rates and other carrying costs.

THOR’s North American RV backlog as of JanuaryApril 31,30, 2026 decreased $534,805,$365,952, or 24.3%,24.1%, to $1,663,688$1,152,105 compared to $2,198,493$1,518,057 as of JanuaryApril 31,30, 2025. The decrease in backlog is primarily a result of a decrease in year-over-year orders for North American Towable products, as North American Motorized backlog was similar to the prior year.products.

Key wholesale statistics for the North American RV industry, as reported by RVIA for the periods indicated, arewere as follows:

In DecemberJune 2025,2026, 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 311,900277,400 units and 37,10036,600 units, respectively, for an annual total of approximately 349,000314,000 units, upa 2.0%decrease of 8.2% from the 2025 calendar year wholesale shipments. The RVIA’s most likely forecast for calendar year 2026 of 349,000314,000 total units could range from a lower estimate of approximately 332,100300,000 total units to an upper estimate of approximately 366,000328,100 total units.

Key retail statistics for the North American RV industry, as reported by Stat Surveys for the periods indicated, arewere as follows:

The Company’s North American wholesale RV shipments, for the calendarthree yearsmonths ended DecemberMarch 31, 20252026 and 20242025 to correspond to the North American industry wholesale periods noted above, were as follows:

Retail statistics of the Company’s North American RV products, as reported by Stat Surveys, for the calendarthree yearsmonths ended DecemberMarch 31, 20252026 and 20242025 to correspond to the North American industry retail periods noted above, were as follows:

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 the impact of inflationary pressures, including the impact from tariffs,tariffs and the Iran conflict, current interest ratesrates, 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, particularly in the fall and winter months which historically are lower retail sales periods.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 our fiscal 2026 will continue to be negatively impacted by these factors.

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 anypast and future increases in raw material or labor costs have had, and will have, a negative 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 closelyactively monitoringmanaging our response to the imposition and effect of U.S. tariffs on imports, including the impact of the recently announced opinion by the U.S. Supreme Court issued in February 2026 addressing the legality of certain tariffs introduced in the last year, the potential for refunds of tariffs imposed under the International Emergency Economic Powers Act as a consequence of the Supreme Court decision, and the current administration’s announcement of its intention to impose new tariffs. We are also monitoring potential retaliatory tariffs or other measures certain other countries have already or may impose on U.S. imports into those countries, that may increase our material costs, disrupt our supply of materials or negatively impact our sales into other countries. The impact of increased or new tariffs on our fiscal 2026 first and second quarteryear-to-date results was relatively modest due to the timing of, and changes in, both the announced tariff rates and their effective dates and our engagement with our vendors regarding the extent and timing of any resultant cost increases.increases, but the impact has increased as our fiscal year has progressed. While we anticipate that tariffs will continue to affect our business and financial results, there is significant uncertainty as to the ultimate impact tariffs and tariff-related matters may have on our business and our remaining fiscal 2026 results given the rapidly changing environment surrounding tariffs in general, in addition to other related political topics. As an additional consideration, with the exception of Airxcel, Inc. and its subsidiaries, we are often not importing products or components directly, but rather through third-party vendors, meaning we do not have complete visibility regarding the timing or impact of tariffs on the pricing of those components. 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. We also intend to seek refunds for tariffs previously paid, however, the amount of any such refunds at this time has not been quantified, and the timing of the receipt of any such refunds is highly uncertain.

Historically, we have generally been able to offset net cost increases over time,time. butHowever, given the size and nature of the tariffs implemented since early calendar 20252025, and the anticipated size and nature of any future tariffs, it makes itis more difficult and likely less desirable for us to pass on the full impact of tariff increases immediately as we are conscious of the impact itsuch offset likely would have on the retail consumer and their demand for our products.

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 current situation in 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.

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 approximately 17.2% and 10.3%7.5% of the caravan and motorcaravan (including campervans) European market for the calendarthree yearmonths ended DecemberMarch 31, 2025,2026, respectively, does not provide OEM-specific information. Industry wholesale shipment data for the European RV market is not available.

Independent dealer inventory of our European RV products as of JanuaryApril 31,30, 2026 decreased 9.3%11.3% to approximately 23,30020,400 units as compared to approximately 25,70023,000 units as of JanuaryApril 31,30, 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.

THOR’s European RV backlog as of JanuaryApril 31,30, 2026 increased $188,087,$13,822, or 11.4%,1.0%, to $1,832,102$1,357,430 compared to $1,644,015$1,343,608 as of JanuaryApril 31,30, 2025, primarily due to the increase in the foreign currency exchange rate between the two periods.2025.

Our European operations offer a full lineup of leisure vehicles including caravans and motorized products includingconsisting of small-to-large motorcaravans, urban vehicles,vehicles and campervans andas small-to-largewell motorcaravans.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.

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. FactorsIn 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 overallnet sales prices and gross margins due to the current economic environment.environment are expected to continue, partly due to the negative impact of material cost increases 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.

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 soldsold, and anypast and future increases in theseraw material or labor costs couldhave and are expected to continue to negatively impact our profit marginsmargins. ifHistorically, 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 unable to offset those costs through a combinationconscious of productthe recontenting,impact materialsuch sourcingincreases strategies,likely efficiencywould improvements,have headcount reductions or raisingon the sellingretail pricesconsumer and their demand for our products by corresponding amounts.products.

Disruption in the sequence of chassis supply and the supply of other critical components has, in the past, inhibited—and could,is incontinuing the future,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.

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.

Three Months Ended JanuaryApril 31,30, 2026 Compared to the Three Months Ended JanuaryApril 31,30, 2025

Consolidated net sales for the three months ended JanuaryApril 31,30, 2026 increaseddecreased $107,749,$113,278, or 5.3%,3.9%, compared to the three months ended JanuaryApril 31,30, 2025. Approximately 32.2%35.5% of the Company’s consolidated net sales for the quarter ended JanuaryApril 31,30, 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 $107,749$113,278 increasedecrease in consolidated net sales includes an increase of $69,424$71,985 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.

The increase in Other income,income (expense), net of $18,357$55,562 for the three months ended JanuaryApril 31,30, 2026 as compared to the three months ended JanuaryApril 31,30, 2025 iswas due primarily due to both an increase of $9,162$24,163 onin the gains on the sales of property, plant and equipment, primarily within the North American Towable segment, a current-period gain of $14,031 in the fair value of certain warrants and includesstock investments at Corporate and a favorable change at Corporate of $11,867 on the fair value of the Company’s deferred compensation plan assets due to market value fluctuations between the two periods. In addition, there was a favorable change in consolidated foreign currency gains of $5,842$4,200 between the two periods.

The increasedecrease of $22,592$22,107 in income before income taxes for the three months ended JanuaryApril 31,30, 2026 as compared to the three months ended JanuaryApril 31,30, 2025 was primarily driven by the combined impact of the decrease in consolidated net sales coupled with the decrease in the consolidated gross profit percentage noted above, partially offset by the increase in Other income,income (expense), net noted above.

The overall effective income tax rate for the three months ended JanuaryApril 31,30, 2026 was 30.3%28.4% compared withto (93.1)%13.9% for the three months ended JanuaryApril 31,30, 2025. The year-over-year change is a result of the jurisdictional mix of earnings between foreign and domestic operations, inclusive of the non-deductiblenon-taxable foreign exchange lossesgains not subject to taxation in the three months endingended JanuaryApril 31,30, 2025,2025. which had a greater percentage impact on the effective incomeThe tax rate. The rate for the three months endingended JanuaryApril 31,30, 2026 was negatively impacted by certain losses in foreign jurisdictions without an associated tax benefit and changes in statutory tax rates in certain foreign jurisdictions. This negative impact was partially offset by foreign exchange gains not subject to taxation in the three months ending January 31, 2026.

Corporate costs included in consolidated selling, general and administrative expenses decreasedincreased $3,062$11,183 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025,2025. withThis increase was primarily due to an increase in deferred compensation expense of $10,858 due to market value fluctuations between the primarytwo changeperiods, beingwhich awas decreaseessentially ofoffset $1,904by the increase in researchother andincome developmentrelated costs.to the deferred compensation plan assets noted below.

Analysis of the change in net sales for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025:

The decrease in total North American Towable net sales of 14.2%24.6% compared to the prior-year quarter resulted from a 23.0%25.0% decrease in unit shipments due to lower consumer demand partially offset by ana 8.8%0.4% 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 is primarily due to lower demand for the lower-cost travel trailer units relative to the prior-year quarter, as travel trailer unit shipments decreased 28.2% from the prior-year quarter. According to statistics published by RVIA, for the three months ended JanuaryApril 31,30, 2026, combined North American travel trailer and fifth wheel wholesale unit shipments decreased 8.4%17.8% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended DecemberMarch 31, 20252026 and 2024,2025, our North American market share for travel trailers and fifth wheels combined was 36.2% and 36.1%,38.3%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increasemodest increases in the overall net price per unit within the travel trailer product line of 6.0%2.8% and the decrease within the fifth wheel product line of 2.9%1.2% were primarily due to product mix changes as compared to the prior-year quarter. The lower increase in the overall net price in the North American Towable segment of 8.8%0.4% was primarily due to the greater percentage of sales of the higher-pricedlower-priced fifthtravel wheeltrailer units as compared to travelthe trailerhigher-priced fifth wheel units in the current-year quarter.

North American Towable cost of products sold decreased $101,633$202,476 to $634,987,$792,085, or 89.4%89.8% of North American Towable net sales, for the three months ended JanuaryApril 31,30, 2026 compared to $736,620,$994,561, or 88.9%85.1% of North American Towable net sales, for the three months ended JanuaryApril 31,30, 2025. The changes in material, labor, freight-out and warranty costs comprised $96,121$197,362 of the $101,633$202,476 decrease in cost of products sold and decreased primarily due to the decrease in North American Towable net sales. Material, labor, freight-out and warranty costs as a combined percentage of North American Towable net sales decreased slightlyincreased to 79.6%81.2% for the three months ended JanuaryApril 31,30, 2026 compared to 79.8%78.2% for the three months ended JanuaryApril 31,30, 2025, primarily due to a decrease in the warranty cost percentage being mostly offset by an increase in the material cost percentage.percentage due to the combined unfavorable impacts of increased sales discounting, current product mix trending toward generally lower-margin products and absorbing increased raw material costs.

Total manufacturing overhead decreased $5,512,$5,114, primarily due to the decrease in net sales and employee cost savings from the towable organizational restructuring initiatives implemented since the prior-year quarter,quarter but increased as a percentage of North American Towable net sales from 9.1%6.9% to 9.8%8.6% as the decreased net sales levels resulted in higher overhead costs per unit sold.

The decrease in North American Towable gross profit of $16,148$84,624 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025 was driven by the decrease in North American Towable net sales, and the decrease in the gross profit percentage is due to the increase in the cost of products sold percentage noted above.

The decrease in North American Towable selling, general and administrative expenses of $9,254$16,077 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025 was primarily due to a decrease of $4,670 in commissions and other employee compensation cost due to the decreasedecreases in North American Towable net sales and costincome savingsbefore fromincome thetaxes, towablecausing organizationalrelated restructuringcommissions, initiativesincentive notedand above. Incentiveother compensation alsoto decreaseddecrease $3,598.by $18,116. These decreases were partially offset by an increase in sales-related travel, advertising and promotional costs of $1,126. The overall selling, general and administrative expense as a percentage of North American Towable net sales decreased 0.2% due to the cost savings noted above.$2,589.

The increasedecrease in North American Towable income before income taxes of $3,043$44,904 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025 included the decrease in North American Towable gross profit noted above being more thanpartially offset by the reduction in selling, general and administrative expenses noted above and an increase in other income of $9,355,$23,056, primarily from increased gains on the sales of assets relative towithin the Towable segment. North American Towable income before income taxes as a percentage of North American Towable net sales increaseddecreased primarily due to the increase in otherthe incomecost of goods sold percentage, partially offset by the increase in Other income, net as a percentage of net sales.

Analysis of the change in net sales for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025:

The increase in total North American Motorized net sales of 29.3%7.7% compared to the prior-year quarter resulted from a 28.3%9.1% increase in unit shipments and a 1.0%1.4% increasedecrease in the overall net price per unit due to the impact of changes in product mix and price. The increase in unit shipments is primarily due to an increase in current dealer and consumer demand incompared comparison withto the demand in the prior-year quarter. According to statistics published by RVIA, for the three months ended JanuaryApril 31,30, 2026, combined North American motorhome wholesale unit shipments increased 5.7%14.6% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended DecemberMarch 31, 20252026 and 2024,2025, our North American market share for motorhomes was 45.9%47.8% and 46.1%,46.6%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The increase in the overall net price per unit within the Class A product line of 15.5%5.1% was primarily due to a higher concentration of sales of the generallycertain higher-priced diesel units as opposed to the more moderately-priced gas units in the current-year quarter compared to the prior-year quarter. The modest increasedecreases in the overall net price per unit within the Class C product line of 1.4%0.9% was primarily due to product mix changes. The decrease in the overall net price per unitand within the Class B product line of 4.1%4.5% waswere primarily due to product mix changes towards more moderately-priced units compared to the prior-year quarter.

North American Motorized cost of products sold increased $110,874$58,400 to $522,431,$654,789, or 90.5%91.2% of North American Motorized net sales, for the three months ended JanuaryApril 31,30, 2026 compared to $411,557,$596,389, or 92.2%89.5% of North American Motorized net sales, for the three months ended JanuaryApril 31,30, 2025. The changes in material, labor, freight-out and warranty costs comprised $105,944$51,228 of the overall $110,874$58,400 increase primarily due to the increased net sales volume.sales. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales decreasedincreased to 83.8%85.4% for the three months ended JanuaryApril 31,30, 2026 compared to 84.6%84.3% for the three months ended JanuaryApril 31,30, 2025, with the decrease mainlyincrease due to amodest decreaseincreases in the directmaterial laborand warranty cost percentage.percentages.

Total manufacturing overhead increased $4,930$7,172, primarily due to higher employee wages, insurance and benefit costs in correlation with the net sales increaseincrease, butas decreasedwell as increased depreciation, and overhead increased as a percentage of North American Motorized net sales from 7.6%5.2% to 6.7%5.8% asprimarily due to the increaseadditional inemployee netand sales levels resulted in lower overheaddepreciation costs pernoted unit sold.above.

The increasedecrease in North American Motorized gross profit of $19,899$7,350 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025 was driven by the increase in North American Motorized net sales,sales andbeing more than offset by the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

The increase in North American Motorized selling, general and administrative expenses ofincreased $4,136a slight $360 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 20252025, wasand primarilythere duewere tono changes of significance within its major cost components, and the increases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $3,616. The0.3% decrease in the overall selling, general and administrative expense as a percentage of North American Motorized net sales is due to the increase in North American Motorized net sales.

The increasedecrease in North American Motorized income before income taxes of $16,606$7,534 for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 20252025, wasand the decrease in the income before income taxes percentage, were primarily due to the increase in North American Motorized net sales, and the primary reasons for the increase in percentage were the decreases in both the cost of products sold and selling, general and administrative expense percentages noted above.

Analysis of the change in net sales for the three months ended JanuaryApril 31,30, 2026 compared to the three months ended JanuaryApril 31,30, 2025:

The increase in total European Recreational Vehicle net sales of 11.8% compared to the prior-year quarter resulted from a 0.2%4.2% increase in unit shipments and ana 11.6%7.6% increase in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and selling prices. The increase in European Recreational Vehicle net sales of $72,007$104,043 includes an increase of $69,424,$71,985, or 11.4%8.2% of the 11.8% increase, due to the increase in foreign currency exchange rates compared to the prior-year quarter. According to the most recently published statistics from the European Caravan Federation, our combined European market share for the three months ended DecemberMarch 31, 20252026 and 20242025 was approximately 20.3%24.4% and 22.0%,22.9%, respectively. Comparisons of Company shipments to industry shipments on a quarterly basis would not necessarily be indicative of the results expected for a full fiscal year.

The overall net price per unit increase of 11.6%7.6% includes an 11.4%8.2% increase due to the impact of foreign currency exchange rate changes and a 0.2%0.6% constant-currency increasedecrease due to the combined impact of product mix and price, primarily due to the slightly higher concentration of Motorcaravan sales in the current-year quarter.price.

The constant-currency decreasedecreases in the overall net price per unit within the Motorcaravan product line of 1.2%4.9% wasand the Caravan product line of 5.7% were primarily due to a higher concentration of sales of lower-priced entry levelentry-level and special-edition motorcaravan products in the current-year quarter. The constant-currency decreaseincrease in the overall net price per unit within the Campervan product line of 1.5%1.0% was primarily due to the current-year quarter including a lower concentration of Campervanthe unitslower-priced withurban avehicle purchasedproducts chassiscompared that is included into the unitprior-year sales price as opposed to units with a customer-supplied chassis that is not included in the unit sales price. The constant-currency decrease in the Caravan product line of 9.3% was primarily due to increased sales discounting.quarter.

European Recreational Vehicle cost of products sold increased $77,807$104,844 to $609,343,$845,556, or 89.0%85.6% of European Recreational Vehicle net sales, for the three months ended JanuaryApril 31,30, 2026 compared to $531,536,$740,712, or 86.8%83.8% of European Recreational Vehicle net sales, for the three months ended JanuaryApril 31,30, 2025. The changes in material, labor, freight-out and warranty costs comprised $70,247$100,641 of the $77,807$104,844 increase primarily due to the increased net sales and the increased material costs noted below. Material, labor, freight-out and warranty costs as a combined percentage of European Recreational Vehicle net sales increased to 76.1%76.2% for the three months ended JanuaryApril 31,30, 2026 compared to 73.6%73.7% for the three months ended JanuaryApril 31,30, 2025, primarily due to an increase in the material cost percentage as a result of the combined unfavorable impacts of increased chassis costs and a higher concentration of sales of entry-level and special-edition motorcaravan products, both of which generally have higher material cost percentages. The warranty cost percentage also increased.increased slightly.

Total manufacturing overhead increased $7,560$4,203 with the increase in sales but decreased slightly as a percentage of European Recreational Vehicle net sales from 13.2%10.1% to 12.9%9.4% as the increase in net sales levels resulted in lower overhead costs per unit sold.