Thor Industries THO Form 10-Q filing Q2 FY2026

ITEM 1. FINANCIAL STATEMENTS

See Notes to the Condensed Consolidated Financial Statements.

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See Notes to the Condensed Consolidated Financial Statements.

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See Notes to the Condensed Consolidated Financial Statements.

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See Notes to the Condensed Consolidated Financial Statements.

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See Notes to the Condensed Consolidated Financial Statements.

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(All U.S. Dollar and Euro amounts presented in thousands except share and per share data or except as otherwise specified)

1. Nature of Operations and Accounting Policies

Nature of Operations

THOR Industries, Inc. was founded in 1980 and is the sole owner of operating subsidiaries (collectively, the “Company” or “THOR”), that, combined, represent the world's largest manufacturer of recreational vehicles (“RVs”) by units sold and revenue. The Company manufactures a wide variety of RVs primarily in the United States and Europe and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe. Unless the context requires or indicates otherwise, all references to “THOR,” the “Company,” “we,” “our” and “us” refer to THOR Industries, Inc. and its subsidiaries.

The July 31, 2025 amounts are derived from the annual audited financial statements of THOR. The interim financial statements are unaudited. In the opinion of management, all adjustments (which consist of normal, recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented have been made. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2025. Due to seasonality within the recreational vehicle industry, inflation and shifting consumer demand in our industry, among other factors, annualizing the results of operations for the six months ended January 31, 2026 would not necessarily be indicative of the results expected for the full fiscal year.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain income tax disclosures. Under this ASU, entities must disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires entities to disclose additional information about income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. ASU 2023-09 is effective for financial statements for annual periods beginning after December 15, 2024. This ASU is effective for the Company’s fiscal year 2026 beginning on August 1, 2025, and the Company adopted ASU 2023-09 effective August 1, 2025.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” as updated by ASU 2025-01, “Income Statement — Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, issued in January 2025. This guidance provides updates to qualitative and quantitative disclosure requirements over the disaggregation of relevant expense captions within the income statement to provide more transparency and useful information on expenses within the income statement including tabular presentation of prescribed expense categories such as the purchases of inventory, employee compensation, depreciation, intangible asset amortization, and inclusion of other specific expense, gains and losses required by existing GAAP with reconciliation of disaggregation to the face of the income statement. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The guidance may be applied prospectively or retrospectively. This guidance will be effective for our fiscal year ending July 31, 2028. We are currently evaluating the impact the guidance may have on our consolidated financial statements.

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2. Business Segments

The Company’s Chief Operating Decision Maker ("CODM") is the President and Chief Executive Officer. The CODM uses net sales, gross profit and income (loss) before income taxes to measure performance of the Company’s segments, allocate resources and make operating decisions. The CODM regularly evaluates these financial measures compared to prior year and forecasted results. Income (loss) before income taxes is utilized during the Company’s budgeting and forecasting process to assess segment profitability and enable decision making regarding strategic initiatives, capital investments and other resources. The Company has three reportable segments, all related to recreational vehicles: (1) North American Towable Recreational Vehicles, (2) North American Motorized Recreational Vehicles and (3) European Recreational Vehicles.

The North American Towable Recreational Vehicles reportable segment consists of the following operating segments that have been aggregated: Airstream (towable), Jayco (towable), Keystone and KZ. The North American Motorized Recreational Vehicles reportable segment consists of the following operating segments that have been aggregated: Airstream (motorized), Jayco (motorized), Thor Motor Coach and the Tiffin Group. The European Recreational Vehicles reportable segment consists solely of the Erwin Hymer Group (“EHG”) business. EHG manufactures a full line of motorized and towable recreational vehicles, including motorcaravans, campervans, urban vehicles and caravans in nine primary RV production locations within Europe. EHG produces and sells numerous brands primarily within Europe, including Buccaneer, Buerstner, Carado, CrossCamp, Dethleffs, Elddis, Eriba, Etrusco, Hymer, Laika, LMC, Niesmann+Bischoff, Sunlight and Xplore. In addition, EHG’s operations include other RV-related products and services.

The operations of the Company’s Airxcel and Postle subsidiaries are included in “Other”. Net sales included in Other relates primarily to the sale of specialized component parts and aluminum extrusions. Intercompany eliminations primarily adjust for Postle and Airxcel sales to the Company’s North American Towables and North American Motorized segments, which are consummated at established transfer prices generally consistent with the selling prices of products to third parties.

Corporate results include items such as corporate governance expenses, interest expense and certain product development expenses.

Other expense (income) includes the gains or losses on the sales of fixed assets, foreign currency changes and equity method investment gains and losses, as well as market value changes in the Company's deferred compensation plan assets and other non-operational items.

Total assets include those assets used in the operation of each reportable and non-reportable segment, and the Corporate assets consist primarily of cash and cash equivalents, deferred income taxes, deferred compensation plan assets, equity and other investments and certain Corporate real estate holdings primarily utilized by THOR’s U.S.-based operating subsidiaries.

The accounting policies of the reportable segments are the same as those described in Note 1 to the Consolidated Financial Statements included in the Fiscal 2025 Form 10-K.

The following tables summarize the Company's financial performance by reportable segment:

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The following tables provide other supplemental financial information by reportable segment:

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3. Earnings Per Common Share

The following table reflects the weighted-average common shares used to compute basic and diluted earnings per common share as included on the Condensed Consolidated Statements of Income and Comprehensive Income:

(1) Due to losses for both the three and six months ended January 31, 2025, zero incremental shares are included because the effect would be antidilutive.

For the three months ended January 31, 2026 and 2025, the Company excluded 11,745 and 222,029 unvested restricted stock units and performance stock units that have an antidilutive effect from its calculation of weighted-average shares outstanding assuming dilution. For the six months ended January 31, 2026 and 2025, the Company excluded 74,301 and 372,593 unvested restricted stock units and performance stock units that have an antidilutive effect from its calculation of weighted-average shares outstanding assuming dilution.

4. Derivatives and Hedging

As of January 31, 2026 and July 31, 2025 there were no derivative instruments designated as hedges, except for the net investment hedge discussed below.

Net Investment Hedge

The foreign currency transaction gains and losses on the portion of the Euro-denominated term loan designated and effective as a hedge of the Company’s net investment in its Euro-denominated functional currency subsidiaries are included as a component of the foreign currency translation adjustment. There were no amounts included in the foreign currency translation adjustment for the three months ended January 31, 2026 and there were losses, net of tax, of $1,611 for the six months ended January 31, 2026. Gains, net of tax, included in the foreign currency translation adjustments were $1,487 for the three months ended January 31, 2025 and $238 for the six months ended January 31, 2025.

There were no amounts reclassified out of accumulated other comprehensive income pertaining to the net investment hedge during the three and six-month periods ended January 31, 2026 and January 31, 2025.

Derivatives Not Designated as Hedging Instruments

The Company has certain other derivative instruments which have not been designated as hedges. These other derivative instruments had a notional amount totaling approximately $31,268 and a fair value asset of $9,658 as of January 31, 2026. These other derivative instruments had a notional amount totaling approximately $31,820 and a fair value asset of $9,675 as of July 31, 2025. For these derivative instruments, changes in fair value are recognized in earnings.

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5. Inventories

Major classifications of inventories are as follows:

Of the $1,739,940 and $1,500,608 of inventories at January 31, 2026 and July 31, 2025, $1,214,662 and $1,089,453, respectively, was valued on the first-in, first-out (“FIFO”) basis, and $525,278 and $411,155, respectively, was valued on the last-in, first-out (“LIFO”) basis.

6. Property, Plant and Equipment

Property, plant and equipment consists of the following:

The Company anticipates strategic sales of certain RV facilities and related equipment to occur during fiscal 2026 and as a result, property, plant and equipment with total net carrying values of $29,314 and $49,740, primarily consisting of North American Towable buildings and improvements, were classified as assets held for sale and included in Prepaid income taxes, expenses and other current assets in the Condensed Consolidated Balance Sheets as of January 31, 2026 and July 31, 2025, respectively.

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During the six months ended January 31, 2026, the Company continued to evaluate the fair value of these assets held for sale based on available market data (a non-recurring ASC 820 level 3 input), less costs to sell, and compared that to their applicable carrying values. These evaluations resulted in no impairment charges during the three months ended January 31, 2026 and an impairment charge of $7,822 related to certain facilities included in Other expense (income), net in the North American Towable segment during the six months ended January 31, 2026.

7. Intangible Assets and Goodwill

The components of Amortizable intangible assets, net are as follows:

Estimated future amortization expense is as follows:

Changes in the carrying amount of Goodwill by reportable segment for the six months ended January 31, 2026 are summarized as follows:

Changes in the carrying amount of Goodwill by reportable segment for the six months ended January 31, 2025 are summarized as follows:

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8. Equity Investments

As discussed in Note 7 to the Company’s Consolidated Financial Statements included in the Fiscal 2025 Form 10-K, effective December 30, 2022, the Company formed a joint venture with TechNexus Holdings LLC (“TechNexus”), whereby the Company transferred TH2Connect, LLC d/b/a Roadpass Digital and its associated legal entities to TN-RP Holdings, LLC (“TN-RP”), following which the Company and TechNexus own 100% of the Class A-RP units and Class C-RP units, respectively, issued by TN-RP.

TN-RP is a variable interest entity (“VIE”), in which both the Company and TechNexus each have a variable interest. The Company’s equity interest, which entitles the Company to a share of future distributions from TN-RP, represents a variable interest. The Company has significant influence due to its Class A-RP unit ownership interest, non-majority seats on the TN-RP advisory board and certain protective rights, and therefore the Company’s investment in TN-RP is accounted for under the equity method of accounting and reported as a component of Equity investments in the Condensed Consolidated Balance Sheets. Similarly, the Company holds an additional investment that is also a VIE over which the Company has significant influence. This is also reported as a component of Equity investments in the Condensed Consolidated Balance Sheets.

The Company had the following aggregate investment and maximum exposure to loss related to these VIEs:

The Company’s share of income and losses accounted for under the equity method of accounting are included in Other income, net in the Condensed Consolidated Statements of Income and Comprehensive Income. The losses recognized in the three and six months ended January 31, 2026 were $640 and $1,065, respectively, and the losses recognized in the three and six months ended January 31, 2025 were $2,251 and $4,505, respectively.

9. Concentration of Risk

One dealer, FreedomRoads, LLC, accounted for approximately 15% of the Company’s consolidated net sales for the three-month period ended January 31, 2026 and approximately 16% of the Company’s consolidated net sales for the three-month period ended January 31, 2025, and accounted for approximately 15% of the Company’s consolidated net sales for the six-month period ended January 31, 2026 and 14% for the six-month period ended January 31, 2025. The majority of the sales to this dealer are reported within the North American Towable and North American Motorized segments. This dealer also accounted for approximately 16% and approximately 14% of the Company’s consolidated trade accounts receivable at January 31, 2026 and July 31, 2025, respectively. The loss of this dealer or a deterioration in the liquidity or creditworthiness of this dealer could have a material adverse effect on the Company’s business.

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10. Fair Value Measurements

The financial assets and liabilities that are accounted for at fair value on a recurring basis at January 31, 2026 and July 31, 2025 are as follows:

Cash equivalents represent investments in short-term money market instruments that are direct obligations of the U.S. Treasury and/or repurchase agreements backed by U.S. Treasury obligations. These investments are reported as a component of Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

Deferred compensation plan assets accounted for at fair value are investments in securities (primarily mutual funds) traded in an active market held for the benefit of certain employees of the Company as part of a deferred compensation plan. Additional plan investments in corporate-owned life insurance are recorded at their cash surrender value, not fair value, and therefore are not included above.

Warrants to purchase shares represent certain warrants to purchase common and preferred shares of a non-public company that is not actively traded. Fair value is determined based upon prices paid by investors for the same or similar securities. These warrants are reported as a component of Other long-term assets on the Condensed Consolidated Balance Sheets.

The fair value of interest rate swaps is determined by discounting the estimated future cash flows based on the applicable observable yield curves.

11. Product Warranty

The Company generally provides retail customers of its products with a one- or two-year warranty covering defects in material or workmanship, with longer warranties on certain structural components.

Changes in our product warranty liability during the indicated periods are as follows:

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12. Long-Term Debt

The components of long-term debt are as follows:

As discussed in Note 12 to the Company’s Consolidated Financial Statements included in the Fiscal 2025 Form 10-K, the Company is a party to a term loan agreement, which consists of both a United States dollar-denominated term loan tranche (“USD term loan”) and a Euro-denominated term loan tranche (“Euro term loan”) and a $1,000,000 asset-based credit facility (“ABL”).

As of January 31, 2026, the outstanding USD term loan balance of $50,000 was subject to a Secured Overnight Financing Rate (“SOFR”)-based rate totaling 5.92%. The total interest rate on the January 31, 2026 outstanding Euro term loan tranche balance of $314,870 was 4.70%. The Senior Unsecured Notes were issued on October 14, 2021 in an aggregate principal amount of $500,000 and bear fixed interest at a rate of 4.00%.

As of January 31, 2026 and July 31, 2025, there were no outstanding ABL borrowings. ABL availability is based on borrowing base calculations of applicable eligible receivables and inventory, subject to certain limits. Availability based on January 31, 2026 borrowing base calculations was approximately $998,000.

For the three and six months ended January 31, 2026, interest expense on total long-term debt was $11,721 and $23,627, respectively. These interest expense amounts include the amortization of capitalized debt issuance costs of $1,460 and $2,392, for the three and six months ended January 31, 2026, respectively. For the three and six months ended January 31, 2025, interest expense on total long-term debt was $15,452 and $33,037, respectively, which includes amortization of capitalized debt issuance costs of $1,361 and $3,527, respectively.

The fair value of the Company’s term loan debt at January 31, 2026 and July 31, 2025 was $367,264 and $410,124, respectively. The fair value of the Company’s Senior Unsecured Notes at January 31, 2026 and July 31, 2025 was $478,750 and $469,100, respectively. The fair value of all other debt held by the Company approximates carrying value. The fair values of the Company’s long-term debt are primarily estimated using Level 2 inputs as defined by ASC 820, based on quoted prices in markets that are not active.

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13. Provision for Income Taxes

The overall effective income tax rate for the three months ended January 31, 2026 was 30.3%, and the effective income tax rate for the six months ended January 31, 2026 was 29.3%. These rates were both negatively impacted by certain losses in foreign jurisdictions without an associated tax benefit and changes in statutory tax rates in certain foreign jurisdictions. The negative impact was partially offset by foreign exchange gains not subject to taxation in both periods.

The overall effective income tax rate for the three months ended January 31, 2025 was (93.1)%, and the effective income tax rate for the six months ended January 31, 2025 was (43.7)%. These rates were both impacted by the jurisdictional mix of pre-tax earnings between foreign and domestic operations, including the impact of non-deductible foreign exchange losses not subject to taxation, and the Company’s consolidated pre-tax losses in both the quarter and year-to-date periods.

Within the next 12 months, the Company does not anticipate any material changes in its unrecognized tax benefits recorded as of January 31, 2026.

14. Contingent Liabilities, Commitments and Legal Matters

The Company’s total commercial commitments under standby repurchase obligations on dealer inventory financing were $3,673,431 and $3,484,235 as of January 31, 2026 and July 31, 2025, respectively. The commitment term is generally up to eighteen months.

The Company accounts for the guarantee under repurchase agreements of independent dealers’ financing by deferring a portion of the related product sale that represents the estimated fair value of the guarantee at inception. This estimate is based on recent historical experience supplemented by the Company’s assessment of current economic and other conditions affecting its independent dealers. This deferred amount is included in the repurchase and guarantee reserve balances of $19,384 and $17,508 as of January 31, 2026 and July 31, 2025, respectively, which are included in Other current liabilities in the Condensed Consolidated Balance Sheets.

Losses incurred related to repurchase agreements that were settled during the three and six-month periods ended January 31, 2026 and January 31, 2025 were not material. Based on current market conditions and other conditions affecting its independent dealers, the Company believes that any future losses under these agreements will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

The Company is also involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. Based on current conditions, management does not believe the ultimate disposition of any current legal proceedings or claims against the Company will have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

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15. Leases

The components of lease costs for the three and six-month periods ended January 31, 2026 and January 31, 2025 were as follows:

Other information related to leases was as follows:

16. Stockholders’ Equity

Stock-based Compensation

The Company's Board of Directors (the “Board") and its shareholders approved the THOR Industries, Inc. Amended and Restated Equity and Incentive Plan (the “Plan”) effective December 17, 2025. The maximum number of shares issuable under the Plan is 2,800,000. As of January 31, 2026, the remaining shares available to be granted under the Plan is 2,799,761. There are no shares available for new awards under any previous equity and incentive plans. The key terms and provisions of the Plan are generally consistent with the prior, recently expired equity and incentive plan. Awards under the Plan may be in the form of stock options (incentive stock options and non-statutory stock options), restricted stock, restricted stock units, performance compensation stock awards and stock appreciation rights.

Total stock-based compensation expense recognized in the three-month periods ended January 31, 2026 and January 31, 2025 for stock-based awards totaled $7,947 and $8,073, respectively. Total stock-based compensation expense recognized in the six-month periods ended January 31, 2026 and January 31, 2025 for stock-based awards totaled $18,897 and $18,610, respectively.

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Share Repurchase Program

On June 18, 2025, the Board authorized the Company's management to utilize up to $400,000 to purchase shares of the Company's common stock beginning on June 18, 2025 and extending through July 31, 2027. The June 18, 2025 authorization is the Company’s only active share repurchase authorization.

During the three-month period ended January 31, 2026, the Company purchased 242,731 shares of its common stock, at various times in the open market, at a weighted-average price of $103.95 and held them as treasury shares at an aggregate purchase price of $25,233.

During the six-month period ended January 31, 2026, the Company purchased 292,966 shares of its common stock, at various times in the open market, at a weighted-average price of $103.36 and held them as treasury shares at an aggregate purchase price of $30,280.

As of January 31, 2026, the remaining amount of the Company’s common stock that may be repurchased under the June 18, 2025 authorization expiring on July 31, 2027 is $349,020.

17. Revenue Recognition

The table below disaggregates revenue to the level that the Company believes best depicts how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors. Other RV-related revenues shown below in the European segment include sales related to accessories and services, new and used vehicle sales at owned dealerships and RV rentals. Performance obligations for all material revenue streams are recognized at a point-in-time. Other sales relate primarily to component part sales to RV original equipment manufacturers and aftermarket sales through dealers and retailers, as well as aluminum extruded components.

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18. Accumulated Other Comprehensive Income (Loss)

The components of other comprehensive income (loss) (“OCI”) and the changes in the Company’s accumulated other comprehensive income (loss) (“AOCI”) by component were as follows:

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated, all U.S. Dollar and Euro amounts are presented in thousands except share and per share data.

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CONSOLIDATED

Consolidated net sales for the three months ended January 31, 2026 increased $107,749, or 5.3%, compared to the three months ended January 31, 2025. Approximately 32.2% of the Company’s consolidated net sales for the quarter ended January 31, 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 increase in consolidated net sales includes an increase of $69,424 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 the three months ended January 31, 2026 increased $6,057, or 2.5%, compared to the three months ended January 31, 2025. Consolidated gross profit was 11.8% of consolidated net sales for the three months ended January 31, 2026 and 12.1% for the three months ended January 31, 2025. The increase in gross profit was primarily due to the impact of the increase in consolidated net sales in the current-year quarter compared to the prior-year quarter while the decrease in gross profit percentage was primarily due to a higher concentration of motorized sales in the current year, which have a higher material percentage than towable product primarily due to the chassis content, and unfavorable changes in European product mix.

Selling, general and administrative expenses for the three months ended January 31, 2026 increased $5,799, or 2.8%, compared to the three months ended January 31, 2025, primarily due to certain employee separation costs in the European Recreational Vehicle segment in the current-year quarter.

The increase in Other income, net of $18,357 for the three months ended January 31, 2026 as compared to the three months ended January 31, 2025 is primarily due to both an increase of $9,162 on the gains on the sales of property, plant and equipment, primarily within the North American Towable segment, and includes the favorable change in consolidated foreign currency gains of $5,842 between the two periods.

The increase of $22,592 in income before income taxes for the three months ended January 31, 2026 as compared to the three months ended January 31, 2025 was primarily driven by the increase in Other income, net noted above.

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The overall effective income tax rate for the three months ended January 31, 2026 was 30.3% compared with (93.1)% for the three months ended January 31, 2025. The year-over-year change is a result of the jurisdictional mix of earnings between foreign and domestic operations, inclusive of the non-deductible foreign exchange losses not subject to taxation in the three months ending January 31, 2025, which had a greater percentage impact on the effective income tax rate. The rate for the three months ending January 31, 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.

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

Corporate costs included in consolidated selling, general and administrative expenses decreased $3,062 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025, with the primary change being a decrease of $1,904 in research and development costs.

Net expense included in Corporate interest and other income and expense decreased $7,234 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025, which included a favorable change of $3,661 in the non-cash foreign currency adjustments related to certain Euro-denominated loans compared to the prior-year quarter. In addition, there was a decrease of $2,012 in net interest expense due to lower overall average outstanding debt balances and lower overall interest rates and the recorded operating results of our equity investments, as discussed in Note 8 to the Condensed Consolidated Financial Statements, improved by $1,611.

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Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

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

The decrease in total North American Towable net sales of 14.2% compared to the prior-year quarter resulted from a 23.0% decrease in unit shipments partially offset by an 8.8% 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 January 31, 2026, combined North American travel trailer and fifth wheel wholesale unit shipments decreased 8.4% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2025 and 2024, our North American market share for travel trailers and fifth wheels combined was 36.2% and 36.1%, 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 travel trailer product line of 6.0% and the decrease within the fifth wheel product line of 2.9% were primarily due to product mix changes as compared to the prior-year quarter. The increase in the overall net price in the North American Towable segment of 8.8% was primarily due to the greater percentage of sales of the higher-priced fifth wheel units as compared to travel trailer units in the current-year quarter.

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North American Towable cost of products sold decreased $101,633 to $634,987, or 89.4% of North American Towable net sales, for the three months ended January 31, 2026 compared to $736,620, or 88.9% of North American Towable net sales, for the three months ended January 31, 2025. The changes in material, labor, freight-out and warranty costs comprised $96,121 of the $101,633 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 slightly to 79.6% for the three months ended January 31, 2026 compared to 79.8% for the three months ended January 31, 2025, primarily due to a decrease in the warranty cost percentage being mostly offset by an increase in the material cost percentage.

Total manufacturing overhead decreased $5,512, primarily due to the decrease in net sales and employee cost savings from the towable organizational restructuring initiatives implemented since the prior-year quarter, but increased as a percentage of North American Towable net sales from 9.1% to 9.8% 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 for the three months ended January 31, 2026 compared to the three months ended January 31, 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 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was primarily due to a decrease of $4,670 in commissions and other employee compensation cost due to the decrease in North American Towable net sales and cost savings from the towable organizational restructuring initiatives noted above. Incentive compensation also decreased $3,598. 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.

The increase in North American Towable income before income taxes of $3,043 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 included the decrease in North American Towable gross profit noted above being more than offset by the reduction in selling, general and administrative expenses noted above and an increase in other income of $9,355, primarily from increased gains on the sales of assets relative to the Towable segment. North American Towable income before income taxes as a percentage of North American Towable net sales increased primarily due to the increase in other income as a percentage of net sales.

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NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

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

The increase in total North American Motorized net sales of 29.3% compared to the prior-year quarter resulted from a 28.3% increase in unit shipments and a 1.0% increase 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 in comparison with the demand in the prior-year quarter. According to statistics published by RVIA, for the three months ended January 31, 2026, combined North American motorhome wholesale unit shipments increased 5.7% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the three months ended December 31, 2025 and 2024, our North American market share for motorhomes was 45.9% and 46.1%, 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% was primarily due to a higher concentration of sales of the generally higher-priced diesel units as opposed to the more moderately-priced gas units in the current-year quarter compared to the prior-year quarter. The modest increase in the overall net price per unit within the Class C product line of 1.4% was primarily due to product mix changes. The decrease in the overall net price per unit within the Class B product line of 4.1% was primarily due to product mix changes towards more moderately-priced units compared to the prior-year quarter.

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North American Motorized cost of products sold increased $110,874 to $522,431, or 90.5% of North American Motorized net sales, for the three months ended January 31, 2026 compared to $411,557, or 92.2% of North American Motorized net sales, for the three months ended January 31, 2025. The changes in material, labor, freight-out and warranty costs comprised $105,944 of the overall $110,874 increase primarily due to the increased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales decreased to 83.8% for the three months ended January 31, 2026 compared to 84.6% for the three months ended January 31, 2025, with the decrease mainly due to a decrease in the direct labor cost percentage.

Total manufacturing overhead increased $4,930 in correlation with the net sales increase but decreased as a percentage of North American Motorized net sales from 7.6% to 6.7% as the increase in net sales levels resulted in lower overhead costs per unit sold.

The increase in North American Motorized gross profit of $19,899 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was driven by the increase in North American Motorized net sales, and 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 of $4,136 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was primarily due to 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. The 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 increase in North American Motorized income before income taxes of $16,606 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was 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.

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EUROPEAN RECREATIONAL VEHICLES

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

The increase in total European Recreational Vehicle net sales of 11.8% compared to the prior-year quarter resulted from a 0.2% increase in unit shipments and an 11.6% 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 includes an increase of $69,424, or 11.4% 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 December 31, 2025 and 2024 was approximately 20.3% and 22.0%, 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% includes an 11.4% increase due to the impact of foreign currency exchange rate changes and a 0.2% constant-currency increase 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.

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The constant-currency decrease in the overall net price per unit within the Motorcaravan product line of 1.2% was primarily due to a higher concentration of sales of lower-priced entry level and special-edition motorcaravan products in the current-year quarter. The constant-currency decrease in the overall net price per unit within the Campervan product line of 1.5% was primarily due to the current-year quarter including a lower concentration of Campervan units with a purchased chassis that is included in the unit 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.

European Recreational Vehicle cost of products sold increased $77,807 to $609,343, or 89.0% of European Recreational Vehicle net sales, for the three months ended January 31, 2026 compared to $531,536, or 86.8% of European Recreational Vehicle net sales, for the three months ended January 31, 2025. The changes in material, labor, freight-out and warranty costs comprised $70,247 of the $77,807 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% for the three months ended January 31, 2026 compared to 73.6% for the three months ended January 31, 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.

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

The decrease in European Recreational Vehicle gross profit of $5,800 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 and the decrease in the gross profit percentage were both due to the increase in the cost of products sold noted above.

European Recreational Vehicle selling, general and administrative expenses increased $11,251 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025, primarily due to a total of $4,818 in employee separation costs related to strategic fiscal year 2026 plant reorganization initiatives. In addition, sales wages and benefits increased $1,937 in correlation with the increase in European Recreational Vehicle net sales and professional fees and related RV repurchase costs also increased $1,922. The increase in the overall selling, general and administrative expense as a percentage of European Recreational Vehicle net sales is primarily due to the increased costs noted above.

The decrease in European Recreational Vehicle income (loss) before income taxes of $14,518 for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was primarily due to the impact of the increases in cost of products sold and selling, general and administrative expenses as noted above, and the primary reason for the decrease in percentage was the increase in both of those cost percentages as noted above.

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Six Months Ended January 31, 2026 Compared to the Six Months Ended January 31, 2025

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CONSOLIDATED

Consolidated net sales for the six months ended January 31, 2026 increased $354,088, or 8.5%, compared to the six months ended January 31, 2025. Approximately 29.7% of the Company’s consolidated net sales for the six months ended January 31, 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 $354,088 increase in consolidated net sales included an increase of $106,921 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 the six months ended January 31, 2026 increased $45,589 compared to the six months ended January 31, 2025. Consolidated gross profit was 12.7% of consolidated net sales for both the six months ended January 31, 2026 and the six months ended January 31, 2025. The increase in consolidated gross profit was primarily due to the impact of the increase in consolidated net sales in the current-year period compared to the prior-year period while the gross profit percentage remained unchanged.

Selling, general and administrative expenses for the six months ended January 31, 2026 increased $19,632, or 4.4%, compared to the six months ended January 31, 2025. This increase included the impact of the 8.5% increase in consolidated net sales and the increase in income before income taxes, which resulted in higher combined commissions and other incentive compensation costs and sales-related travel, advertising and promotional costs also increased in correlation with the sales increase.

The increase in Other income, net of $18,197 for the six months ended January 31, 2026 as compared to the six months ended January 31, 2025 includes an increase of $10,647 in gains on the dispositions of property, plant and equipment compared to the prior-year period, primarily within the North American Towable segment, the favorable change in consolidated foreign currency gains of $5,724 between the two periods, and the $3,356 favorable change in Corporate as discussed below relative to 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 improvement in the operating results of our equity investments of $3,440. These favorable changes were partially offset by an impairment charge of $7,822 taken in the current-year period on certain North American Towable assets held for sale.

The increase of $56,236 in income before income taxes for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily driven by the impact of the increase in consolidated net sales and the increase in other income, net noted above.

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The overall effective income tax rate for the six months ended January 31, 2026 was 29.3% compared with (43.7)% for the six months ended January 31, 2025. The year-over-year change is a result of the jurisdictional mix of earnings between foreign and domestic operations, inclusive of the non-deductible foreign exchange losses not subject to taxation in the six months ended January 31, 2025, which had a greater percentage impact on the effective income tax rate. The rate for the six months ending January 31, 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 six months ending January 31, 2026.

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

Corporate costs included in consolidated selling, general and administrative expenses decreased $9,083 for the six months ended January 31, 2026 compared to the six months ended January 31, 2025. The decrease included a decrease in compensation costs of $15,860, primarily due to employee separation costs related to certain headcount reductions in the prior-year period, and a decrease in research and development costs of $4,941. These decreases were partially offset by an increase in deferred compensation expense of $3,152 due to market value fluctuations between the two periods, which was primarily offset by the increase in other income related to the deferred compensation plan assets noted below. In addition, there were increases of $3,923 in certain dealer promotional costs and $1,750 in costs related to our standby repurchase obligations reserve due primarily to a favorable adjustment in the prior-year period. Incentive compensation also increased $1,850 due to the increase in income before income taxes compared to the prior-year period.

Net expense from Corporate interest and other income and expense decreased $21,022 for the six months ended January 31, 2026 compared to the six months ended January 31, 2025. Net interest expense decreased by $7,434 primarily due to lower overall average outstanding debt balances and lower overall interest rates and the recorded operating results of our equity investments, as discussed in Note 8 to the Condensed Consolidated Financial Statements, improved by $3,440 in the current-year period as compared to the prior-year period. In addition, there was a favorable change of $3,356 in the fair value of the Company’s deferred compensation assets and a favorable change of $5,447 related to non-cash foreign currency gains on certain Euro-denominated loans between the two periods.

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Segment Reporting

NORTH AMERICAN TOWABLE RECREATIONAL VEHICLES

Analysis of the change in net sales for the six months ended January 31, 2026 compared to the six months ended January 31, 2025:

The decrease in total North American Towable net sales of 6.9% compared to the prior-year period resulted from a 18.3% decrease in unit shipments and a 11.4% 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 was primarily due to lower demand for the lower-cost travel trailer units relative to the prior-year period, as travel trailer unit shipments decreased 24.9% from the prior-year period. According to statistics published by RVIA, for the six months ended January 31, 2026, combined North American travel trailer and fifth wheel wholesale unit shipments decreased 5.1% compared to the same period last year. According to the most recently published statistics from Stat Surveys, for the six-month periods ended December 31, 2025 and 2024, our North American market share for travel trailers and fifth wheels combined was 38.0% and 37.7%, respectively. Comparisons of Company shipments to industry shipments on an interim 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 travel trailer product line of 6.0% was primarily due to current product mix changes compared to the prior-year period. The increase in the overall net selling price in the North American Towable segment of 11.4% was primarily due to the greater percentage of sales of the higher-priced fifth wheel units as compared to travel trailer units in the current-year period.

North American Towable cost of products sold decreased $109,879 to $1,413,082, or 87.9% of North American Towable net sales, for the six months ended January 31, 2026 compared to $1,522,961, or 88.2% of North American Towable net sales, for the six months ended January 31, 2025. Changes in material, labor, freight-out and warranty costs comprised $99,816 of the $109,879 decrease in cost of products sold 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 were 79.2% for the six months ended January 31, 2026 compared to 79.5% for the six months ended January 31, 2025, with the slight decrease primarily due to a decrease in the warranty cost percentage being mostly offset by an increase in the material cost percentage.

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Total manufacturing overhead decreased $10,063 in correlation with the decrease in net sales and employee cost savings from the towable organizational restructuring initiatives implemented since the prior-year period, but remained the same as a percentage of North American Towable net sales at 8.7% as the decreased net sales levels offset the decrease in overhead costs.

The decrease of $9,590 in North American Towable gross profit for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was driven by the decrease in North American Towable net sales while the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

The decrease of $9,199 in North American Towable selling, general and administrative expenses for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily due to a decrease of $7,880 in sales commissions and other employee compensation due to the decrease in North American Towable net sales and cost savings from the towable organizational restructuring initiatives. Incentive compensation also decreased $2,608. These decreases were partially offset by an increase in sales-related travel, advertising and promotional costs of $3,637. The overall selling, general and administrative expense as a percentage of North American Towable net sales decreased 0.1% due to these cost savings.

The increase of $2,693 in North American Towable income before income taxes for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily due to the decrease in North American Towable gross profit being mostly offset by the reduction in selling, general and administrative expenses noted above, while other income increased $2,060. The North American Towable income before income taxes as a percentage of North American Towable net sales increased primarily due to the decrease in the cost of products sold percentage of net sales.

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NORTH AMERICAN MOTORIZED RECREATIONAL VEHICLES

Analysis of the change in net sales for the six months ended January 31, 2026 compared to the six months ended January 31, 2025:

The increase in total North American Motorized net sales of 30.1% compared to the prior-year period resulted from a 30.4% increase in unit shipments and a 0.3% decrease in the overall net price per unit due to the combined impact of changes in product mix and price. The increase in unit shipments was primarily due to an increase in current dealer and consumer demand in comparison with the demand in the prior-year period. According to statistics published by RVIA, for the six months ended January 31, 2026, combined North American motorhome wholesale unit shipments increased 10.2% compared to the same period last year. According to statistics published by Stat Surveys, for the six-month periods ended December 31, 2025 and 2024, our North American market share for motorhomes was 46.6% and 47.0%, respectively. Comparisons of Company shipments to industry shipments on an interim 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 10.4% was primarily due to a higher concentration of sales of the generally higher-priced diesel units as opposed to the more moderately-priced gas units in the current-year period compared to the prior-year period. The slight increase in the overall net price per unit within the Class C product line of 0.3% was primarily due to product mix changes, and the Class B product line decrease of 2.5% was primarily due to product mix changes towards more moderately-priced units compared to the prior-year period.

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North American Motorized cost of products sold increased $237,867 to $1,111,905, or 89.8% of North American Motorized net sales, for the six months ended January 31, 2026 compared to $874,038, or 91.9% of North American Motorized net sales, for the six months ended January 31, 2025. The changes in material, labor, freight-out and warranty costs comprised $229,206 of the $237,867 decrease primarily due to the increased net sales volume. Material, labor, freight-out and warranty costs as a combined percentage of North American Motorized net sales decreased to 83.7% for the six months ended January 31, 2026 compared to 84.8% for the six months ended January 31, 2025, with the decrease primarily due to decreases in both the direct labor and warranty cost percentages.

Total manufacturing overhead increased $8,661 in correlation with the increase in net sales but decreased as a percentage of North American Motorized net sales from 7.1% to 6.1% as the increase in net sales levels resulted in lower overhead costs per unit sold.

The increase of $48,794 in North American Motorized gross profit for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was driven by the increase in North American Motorized net sales, and the increase in the gross profit percentage is due to the decrease in the cost of products sold percentage noted above.

The increase of $9,347 in North American Motorized selling, general and administrative expenses for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily due to the increases in North American Motorized net sales and income before income taxes, which caused related commissions, incentive and other compensation to increase by $6,888. The decrease in the overall selling, general and administrative expense as a percentage of North American Motorized net sales was primarily due to the increase in North American Motorized net sales.

The increase of $40,674 in North American Motorized income before income taxes for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was 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 percentages noted above.

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EUROPEAN RECREATIONAL VEHICLES

Analysis of the change in net sales for the six months ended January 31, 2026 compared to the six months ended January 31, 2025:

The increase in total European Recreational Vehicle net sales of 10.1% compared to the prior-year period resulted from an increase of 0.6% in unit shipments and a 9.5% increase in the overall net price per unit due to the total combined impact of changes in foreign currency, product mix and price. The increase in European Recreational Vehicle net sales of $122,583 includes an increase of $106,921, or 8.8% of the 10.1% increase, due to the increase in foreign currency exchange rates since the prior-year period. According to the most recently published statistics from the European Caravan Federation, our combined European market share for the six-month periods ended December 31, 2025 and 2024 was approximately 22.7% and 22.5%, respectively. Comparisons of Company shipments to industry shipments on an interim basis would not necessarily be indicative of the results expected for a full fiscal year.

The overall net price per unit increase of 9.5% included an 8.8% increase due to the impact of foreign currency exchange rate changes and a constant-currency increase of 0.7% due to the combined impact of product mix and selling prices, primarily due to the slightly higher concentration of Motorcaravan sales in the current-year period compared to the prior-year period.

The constant-currency decreases in the Motorcaravan product line of 0.8%, the Caravan product line of 7.6% and the Campervan product line of 2.1% were primarily due to product mix, along with a higher concentration of lower-priced entry level and special-edition motorcaravan products in the current-year period.

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European Recreational Vehicle cost of products sold increased $143,217 to $1,187,008, or 88.6% of European Recreational Vehicle net sales, for the six months ended January 31, 2026 compared to $1,043,791, or 85.7% of European Recreational Vehicle net sales, for the six months ended January 31, 2025. The changes in material, labor, freight-out and warranty costs comprised $129,329 of the $143,217 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 75.5% for the six months ended January 31, 2026 compared to 72.4% for the six months ended January 31, 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 have generally higher material cost percentages. The warranty cost percentage also increased.

Total manufacturing overhead increased by $13,888 primarily due to the increase in European Recreational Vehicle net sales but decreased as a percentage of European Recreational Vehicle net sales from 13.3% to 13.1% as the sales increase resulted in lower overhead costs per unit sold.

The decrease of $20,634 in European Recreational Vehicle gross profit for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 and the decrease in the gross profit percentage were both due to the increase in cost of sales noted above.

The increase of $23,505 in European Recreational Vehicle selling, general and administrative expenses for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily due to $11,520 in employee separation costs related to strategic fiscal year 2026 plant reorganization initiatives. In addition, sales wages and benefits increased $3,215 in correlation with the increase in European Recreational Vehicle net sales and professional fees and related RV repurchase costs also increased $2,430. The increase in the overall selling, general and administrative expense as a percentage of European Recreational Vehicle net sales is also primarily due to the employee separation costs noted above.

The decrease of $42,333 in European Recreational Vehicle income (loss) before income taxes for the six months ended January 31, 2026 compared to the six months ended January 31, 2025 was primarily due to the increase in cost of products sold and selling, general and administrative expenses as noted above, and the primary reason for the decrease in the percentage was the increase in both of these cost percentages.

Liquidity and Capital Resources

As of January 31, 2026, we had $242,176 in cash and cash equivalents, of which $133,223 was held in the U.S. and the equivalent of $108,953, predominantly in Euros, was held in Europe, compared to $586,596 in cash and cash equivalents on July 31, 2025, of which $412,088 was held in the U.S. and the equivalent of $174,508, predominantly in Euros, was held in Europe. Cash and cash equivalents held internationally may be subject to foreign withholding taxes if repatriated to the U.S. The components of the $344,420 decrease in cash and cash equivalents are described in more detail below, but the decrease was primarily attributable to cash used in operating activities of $157,108, cash used in investing activities of $31,210 and cash used in financing activities of $149,455.

Net working capital at January 31, 2026 was $1,176,220 compared to $1,193,279 at July 31, 2025. Capital cash expenditures of $60,019 for the six months ended January 31, 2026 were made primarily for production building additions and improvements and replacing machinery and equipment used in the ordinary course of business.

We strive to maintain adequate cash balances to ensure we have sufficient resources to respond to opportunities and changing business conditions. In addition, the unused availability under our revolving asset-based credit facility is generally available to the Company for general operating purposes and approximated $998,000 at January 31, 2026. We believe our on-hand cash and cash equivalents and funds generated from operations, along with funds available under the revolving asset-based credit facility, will be sufficient to fund expected operational requirements for the foreseeable future.

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Our priorities for the use of current and future available cash generated from operations remain consistent with our history, and include reducing our indebtedness, maintaining and, over time, growing our dividend payments and funding our growth, both organically and, opportunistically, through acquisitions. We may also consider strategic and opportunistic repurchases of shares of THOR stock under the share repurchase authorizations as discussed in Note 16 to the Condensed Consolidated Financial Statements, and special dividends based upon market and business conditions and excess cash availability, subject to potential customary limits and restrictions pursuant to our credit facilities, applicable legal limitations and determination by the Company's Board of Directors ("Board"). We believe our on-hand cash and cash equivalents and funds generated from operations will be sufficient to fund expected cash dividend payments and share repurchases for the foreseeable future.

Our current estimate of committed and internally approved capital spend for the remainder of fiscal 2026 is approximately 150,000, primarily for certain building projects and certain automation projects, as well as replacing and upgrading machinery, equipment and other assets throughout our facilities to be used in the ordinary course of business. We anticipate approximately two-thirds will be in North America and one-third in Europe, and that these expenditures will be funded by cash provided by our operating activities.

Our Board currently intends to continue regular quarterly cash dividend payments in the future. As is customary under credit facilities, certain actions, including our ability to pay dividends, are subject to the satisfaction of certain conditions prior to payment. The conditions for the payment of dividends under the existing debt facilities include a minimum level of adjusted excess cash availability and a fixed charge coverage ratio test, both as defined in the credit agreements. The declaration of future dividends and the establishment of the per share amounts, record dates and payment dates for any such future dividends are subject to the determination of the Board, and will be dependent upon future earnings, cash flows and other factors, in addition to compliance with any then-existing financing facilities.

Operating Activities

Net cash used in operating activities for the six months ended January 31, 2026 was $157,108 as compared to net cash provided by operating activities of $61,582 for the six months ended January 31, 2025.

For the six months ended January 31, 2026, net income adjusted for non-cash items (primarily depreciation, amortization of intangibles and stock-based compensation) provided $181,854 of operating cash. The change in net working capital resulted in a net use of $338,962 of operating cash during that period, primarily due to North American increases in inventory to support current demand, including increased chassis levels to support the increase in North American motorized demand and a seasonal increase in RV finished goods heading into the spring selling season. In addition, income tax payments during the period exceeded the income tax provision for the period and incentive compensation payables also decreased due to lower income before income taxes.

For the six months ended January 31, 2025, net loss adjusted for non-cash items (primarily depreciation, amortization of intangibles and stock-based compensation) provided $152,565 of operating cash. The change in working capital resulted in the net use of $90,983 of operating cash during that period, primarily due to a decrease in certain accrued liabilities as a result of the reduction in sales and production when compared to the prior-year period.

Investing Activities

Net cash used in investing activities for the six months ended January 31, 2026 was $31,210, primarily due to capital expenditures of $60,019 partially offset by proceeds from the dispositions of property, plant and equipment of $28,895.

Net cash used in investing activities for the six months ended January 31, 2025 was $34,463, primarily due to capital expenditures of $51,538 partially offset by proceeds from the dispositions of property, plant and equipment of $21,209.

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Financing Activities

Net cash used in financing activities for the six months ended January 31, 2026 was $149,455, primarily for payments on the term-loan credit facilities of $56,264, regular quarterly dividend payments of $0.52 per share for each of the first two quarters of fiscal 2026 totaling $54,827 and $30,280 used for treasury share repurchases.

Net cash used in financing activities for the six months ended January 31, 2025 was $167,005, primarily for payments on the term-loan credit facilities of $85,000 and regular quarterly dividend payments of $0.50 per share for each of the first two quarters of fiscal 2025 totaling $53,153.

The Company increased its previous regular quarterly dividend of $0.50 per share to $0.52 per share in October 2025. In October 2024, the Company increased its previous regular quarterly dividend of $0.48 per share to $0.50 per share.

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Accounting Standards

See Note 1 in the Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part 1 of this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and the notes to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended July 31, 2025. There have been no material changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended July 31, 2025.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign currency exchange rates and interest rates. At times, the Company enters into hedging transactions to mitigate certain of these risks in accordance with guidelines established by the Company’s management. The Company does not use financial instruments for trading or speculative purposes.

CURRENCY EXCHANGE RISK – The Company’s principal currency exposures mainly relate to the Euro and British Pound Sterling. The Company periodically uses foreign currency forward contracts to manage certain foreign exchange rate exposure related to anticipated sales transactions in Pounds Sterling with financial instruments whose maturity date, along with the realized gain or loss, occurs on or near the execution of the anticipated transaction.

The Company also holds $339,538 of debt denominated in Euros at January 31, 2026. A hypothetical 10% change in the Euro/U.S. dollar exchange rate would change our January 31, 2026 debt balance by approximately $33,954.

INTEREST RATE RISK – Based on our assumption of the Company’s floating-rate debt levels over the next 12 months, a one-percentage-point increase in interest rates (approximately 19.8% of our weighted-average interest rate at January 31, 2026) would result in an estimated $3,699 reduction in income before income taxes over a one-year period.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures,” as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company has carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at attaining the level of reasonable assurance noted above.

During the quarter ended January 31, 2026, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

ITEM 1A. RISK FACTORS

Before deciding to invest in our Company, in addition to the other information contained in our Annual Report on Form 10-K and other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended July 31, 2025, which could materially and adversely affect our business, financial condition, prospects, results of operations and cash flows. In such case, the trading price of our common stock could decline, and you could lose all or part of your investment. The risks described in our most recent Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially affect our business, financial condition, results of operations and prospects.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended January 31, 2026, the Company used $25,233 to purchase shares of common stock under its share repurchase authorization. The Company’s total remaining authorizations for common stock repurchases was $349,020 at January 31, 2026.

A summary of the Company’s share repurchases during the three months ended January 31, 2026 is set forth below:

(1) On June 23, 2025, the Company announced that its Board of Directors had authorized the Company's management to utilize up to $400,000 to purchase shares of the Company's common stock through July 31, 2027. Under the repurchase authorization, the Company is authorized to repurchase, on a discretionary basis and from time-to-time, outstanding shares of its common stock in the open market, in privately negotiated transactions or by other means, including pursuant to a repurchase plan administered in accordance with Rule 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and amount of share repurchases will be determined at the discretion of the Company’s management team based upon the market price of the stock, management’s evaluation of general market and economic conditions, cash availability and other factors. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under this program.

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ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

The Company’s Insider Trading Policy permits its directors and officers to trade Company stock under a “Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act, subject to compliance with applicable regulations as well as the Company’s Insider Trading Policy and share ownership requirements. The Insider Trading Policy provides that each officer or director Rule 10b5-1 trading arrangement must be entered into in writing during an open trading window and at a time that the officer or director is not aware of material nonpublic information. The Company generally requires that any Rule 10b5-1 trading arrangement adopted by an officer or director must not expire within one year of implementation and is subject to a mandatory cooling-off period requirement.

On January 15, 2026, our Chief Financial Officer, Colleen Zuhl, adopted a Rule 10b5-1 trading arrangement (providing for the sale of up to 9,917 shares of Company common stock) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Mrs. Zuhl’s Rule 10b5-1 trading arrangement provides for a mandatory cooling-off period as required by Rule 10b5-1 and is scheduled to expire on January 15, 2027 or such earlier date as of which all of the shares covered by the arrangement have been sold. As of January 31, 2026, Mrs. Zuhl held 110,497 shares of Company common stock not subject to trading under her Rule 10b5-1 trading arrangement.

On January 23, 2026, our Chief Executive Officer, Robert Martin, adopted a Rule 10b5-1 trading arrangement (providing for the sale of up to 50,033 shares of Company common stock) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Mr. Martin’s 10b5-1 trading arrangement provides for a mandatory cooling-off period as required by Rule 10b5-1 and is scheduled to expire on April 23, 2027 or such earlier date as of which all of the shares covered by the arrangement have been sold. As of January 31, 2026, Mr. Martin held 291,091 shares of Company common stock not subject to trading under his Rule 10b5-1 trading arrangement.

Except as described above, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or “non-Rule 10b5-1 trading arrangement” (as defined in Item 408 of Regulation S-K) during the three months ended January 31, 2026.

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ITEM 6. EXHIBITS

Exhibit Description

3.1 Thor Industries, Inc. Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2018) 3.2 Thor Industries, Inc. Amended and Restated By-Laws, as amended (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2018) 10.1 THOR Industries, Inc. Amended and Restated Equity and Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on December 18, 2025) 31.1 Chief Executive Officer’s Rule 13a-14(a) Certification 31.2 Chief Financial Officer’s Rule 13a-14(a) Certification 32.1 Chief Executive Officer’s Section 1350 Certification 32.2 Chief Financial Officer’s Section 1350 Certification 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Calculation Linkbase Document 101.PRE Inline XBRL Taxonomy Presentation Linkbase Document 101.LAB Inline XBRL Taxonomy Label Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (104) Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101)

Attached as Exhibits 101 to this report are the following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 2026 formatted in XBRL (“eXtensible Business Reporting Language”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Stockholders' Equity and (v) related notes to these financial statements.

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