REV Group's Q2 2025: Unpacking the Contradictions on Tariffs, Demand Trends, and EBITDA Goals

Tariff impacts and timeline, demand and order trends in the Fire & Ambulance segment, 2027 EBITDA goals and impact of Lance Camper sale, specialty vehicle tariff impact and duration, dealer inventory health and consumer sentiment are the key contradictions discussed in REV Group's latest 2025Q2 earnings call.



Strong Financial Performance:
- REV Group reported consolidated net sales of $629.1 million for the second quarter of 2025, representing a 7.7% increase compared to the prior year quarter.
- The increase was primarily driven by higher net sales in the Specialty Vehicles segment, which saw a 12.2% increase in sales.
- This growth was supported by increased manufacturing efficiencies and favorable pricing actions.

Manufacturing Throughput and Production Efficiency:
- The Fire Group experienced a sustained year-over-year increase in manufacturing throughput, with significant improvements in plant efficiency.
- This led to a substantial increase in shipments and contributed to top-line growth.
- The improvements were achieved through investments in workforce training, lean initiatives, and operational optimizations.

Impact of Tariffs and Strategic Sourcing:
- REV Group anticipates a combined $15 million impact from tariffs in the second half of the year due to increased material costs and Class B luxury van chassis.
- The company is mitigating these headwinds by transitioning to U.S. domestic plants and close collaboration with vendors.
- These efforts are aimed at maintaining operational discipline and strategic sourcing to navigate future uncertainties.

Recreational Vehicles Segment Challenges and Strategic Adjustments:
- The Recreational Vehicles segment saw a 2.4% decrease in sales to $175.3 million, primarily due to soft end market demand and reduced unit shipments.
- Despite challenges, REV Group brands outperformed the broader industry, and April marked the first sequential increase in retail shipments in 28 months.
- The company is focusing on product innovation, cost management, and dealer relationships to maintain market competitiveness amid industry challenges.