LCI Lifts Profit as Aftermarket Offsets RV Slump
Adjusted net sales declined 4.5% to $1.057 billion after accounting for expected tariff-refund pass-throughs.
LCI Industries (LCII), a recreational-vehicle components maker, posted higher second-quarter profit despite lower sales as aftermarket growth and wider margins offset a sharp contraction in RV production.
The quarter marked a widening split between LCI’s businesses. OEM demand weakened with RV shipments, while pricing, sourcing savings and tariff-refund benefits helped the aftermarket operation generate more profit. The company lowered its full-year shipment and revenue forecasts but maintained its margin target.
Second-quarter net sales fell 12.5% to $968.7 million from $1.107 billion a year earlier and were about 11.2% below the first quarter. Net income rose 16% to $67.1 million, while diluted earnings increased 20% to $2.75 a share. Operating margin expanded to 9.9% from 7.9% a year earlier and about 8.7% in the first quarter.
Adjusted EBITDA increased 7% to $129.4 million, and adjusted EBITDA margin widened to 12.2% of adjusted sales from 11.0%. Adjusted EBITDA also rose about 3.5% sequentially even as adjusted sales declined about 3.0%, extending the improvement in profitability.
OEM sales fell 20% to $674.8 million as RV OEM sales dropped 33% to $336.1 million. Lower RV shipments, a shift toward lower-content single-axle trailers and tariff-refund pass-throughs outweighed price increases and product gains. Towable-RV content per industry unit nevertheless rose 11% to $5,831, while Adjacent Industries OEM sales increased 1% as acquisitions and stronger North American marine sales provided support.
Aftermarket sales rose 10% to $293.9 million, supported by pricing, acquisitions and higher automotive-aftermarket volume. Operating profit in the segment climbed 44% to $51.9 million, and its margin expanded to 17.7% from 13.5% as pricing, sourcing savings and tariff-refund benefits absorbed higher material, freight, metals and fuel costs.
LCI now expects 2026 North American RV wholesale shipments of 280,000 to 300,000 units, down from its previous forecast of 315,000 to 330,000. It expects revenue of $3.9 billion to $4.1 billion and adjusted earnings of $8.25 to $8.75 a share, while its operating-margin forecast remains 7.5% to 8.0%.
The pending all-stock merger with Patrick Industries added $14.1 million of expenses during the quarter. LCI shareholders are set to receive 1.2440 Patrick shares for each LCI share, and the companies target more than $150 million in run-rate synergies as softer RV demand tests LCI’s margin gains.