LCI Industries' Q2 2025: Navigating Contradictions in Tariffs, Inventory, and RV Mix Dynamics

Tariff impact and mitigation efforts, inventory levels and market demand, single axle vs. multi-axle towable RV mix, wholesale unit outlook and mix dynamics are the key contradictions discussed in LCI Industries' latest 2025Q2 earnings call.



Revenue Growth and Market Share Expansion:
- LCI Industries reported $1.1 billion in sales for Q2 2025, up 5% year-over-year, with organic toy hauler content growth despite RV mix headwinds.
- The growth was driven by increased market share gains in its top five product categories such as appliances, axles, and suspension systems, as well as the traction of recent innovations reaching a $100 million run rate.

Impact of Tariffs and Supply Chain Mitigation:
- Tariffs impacted the margins by 290 basis points, with costs mitigated through diversifying the supply chain and pricing pass-through strategies.
- LCI Industries is on track to reduce its China exposure to 10% by the end of 2025, down from 24% in 2024, by diversifying its supply chain and bringing some products back to the U.S. for manufacturing.

Acquisition and Strategic Expansion:
- Freedman Seating Company and Trans/Air contributed $32 million in sales in Q2 2025, strengthening LCI's position in the bus market.
- These acquisitions are expected to provide $200 million in expected annualized revenues, benefiting from ongoing and essential municipal fleet upgrades, adding to LCI's resiliency and revenue stability.

Cost Management and Efficiency:
- LCI Industries achieved a sequential adjusted EBITDA margin expansion of 40 basis points, reaching 11%, driven by cost reduction, indirect spend reduction, and reduced salaried labor.
- The company is targeting an 85 basis point overhead and G&A reduction for 2025, supporting ongoing cost reduction efforts and operational efficiency.