LCI Industries Sales Fall as RV OEM Demand Weakens

The Tip Desk · November 5, 2026 · 4 min read

Adjusted operating margin reached 8.3% as the company guided 2026 revenue to $3.9 billion to $4.0 billion.

LCI Industries (LCII), a supplier of engineered components to the recreation and transportation markets, reported third-quarter 2026 net sales of $992.5 million, down from $1,036.5 million a year earlier, reversing the 4.3% year-over-year increase to $1.1 billion in the first quarter of 2026.

The company said the decline was driven primarily by lower North American RV wholesale shipments, partially offset by commodity-indexed price increases, automotive aftermarket growth, and $5.2 million of sales from acquired businesses.

Net income was $50.1 million, or $2.05 a share, compared with $62.5 million, or $2.55 a share, a year earlier. Adjusted net income rose to $54.0 million, or $2.21 a share, from $48.1 million, or $1.97 a share. Adjusted EBITDA increased to $111.5 million, or 11.2% of net sales, from $105.9 million, or 10.2% of net sales.

Operating profit margin expanded 30 basis points to 7.6% from 7.3% year over year, after a 90 basis-point expansion to 8.7% in the first quarter of 2026. Adjusted operating profit margin, which excludes merger-related expenses and restructuring costs, expanded 100 basis points to 8.3% from 7.3%.

The company said year-over-year margin expansion was driven primarily by cost improvement actions, including materials sourcing strategies, partially offset by lower absorption of fixed costs due to lower sales volumes and merger-related expenses. Merger expenses of $5.1 million and restructuring costs of $2.4 million appeared in the third quarter of 2026, adding 0.5% and 0.2% to the adjusted operating margin bridge versus zero in the year-ago quarter.

OEM net sales decreased 7% to $732.3 million from $790.0 million a year earlier. RV OEM net sales decreased 17% to $389.9 million, which the company attributed primarily to a decrease in North American travel trailer and fifth-wheel shipments and a mix shift toward lower-content single-axle travel trailers, partially offset by commodity-indexed price increases. Adjacent Industries OEM net sales increased 7% to $342.4 million from $319.9 million a year earlier, driven by higher sales to North American transportation, marine, and manufactured housing OEMs.

OEM segment operating profit rose to $44.1 million, or 6.0% of net sales, from $43.6 million, or 5.5% of net sales, a year earlier. The company said the OEM margin benefited from commodity-indexed prices, cost actions, and a favorable component mix, partially offset by fixed costs spread over lower volumes, lower selling prices on certain products related to tariff costs, higher material and freight costs including steel and aluminum, and merger-related expenses.

Aftermarket net sales increased 6% to $260.2 million from $246.5 million a year earlier, primarily on higher automotive aftermarket volume. Aftermarket operating profit declined to $30.9 million, or 11.9% of net sales, from $31.9 million, or 12.9% of net sales. The company said the aftermarket margin was negatively impacted by higher material and freight costs related to tariffs, higher steel and aluminum costs, rising fuel costs, capacity and distribution investments, restructuring costs, and merger-related expenses, partially offset by fixed-cost absorption on higher automotive volumes, cost actions, and targeted price increases.

Towable RV content per unit rose 6% to $5,733 from $5,431 a year earlier, after a 13% increase to $5,826 in the first quarter of 2026.

Interim Chief Executive Officer Johnny Sirpilla said margin expansion and 6% growth in product content per unit contributed to performance and positioned the company to achieve its updated full-year outlook. He said the company is advancing toward the proposed merger with Patrick Industries, which it continues to expect to close in the first half of 2027. On June 30, 2026, the company entered a definitive all-stock merger agreement with Patrick Industries; a special stockholder meeting is set for November 18, 2026.

Cash and cash equivalents were $245.6 million at September 30, 2026, with $595.4 million of availability under the revolving credit facility. Outstanding long-term indebtedness, including current maturities, was $852.4 million.

Based on current market and economic conditions along with existing tariffs, the company currently expects October 2026 net sales of approximately $341 million, down 10% from the prior year; 2026 North American RV wholesale shipments of 285,000 to 295,000; 2026 revenue of $3.9 billion to $4.0 billion; 2026 adjusted operating profit margin of 7.5% to 8.0%; and 2026 adjusted EPS of $8.25 to $8.50.