LCI Industries (NYSE:LCII) reported what executives described as a strong finish to 2025, highlighting double-digit sales growth in the fourth quarter alongside margin expansion driven by market share gains, product content growth, and ongoing efficiency initiatives.
Fourth-quarter performance: sales up, margins improved
President and CEO Jason Lippert said the company delivered 15% year-over-year top-line growth in the fourth quarter with “further margin expansion,” pointing to growth across RV, aftermarket, transportation, marine, and housing end markets. CFO Lillian Etzkorn reported fourth-quarter consolidated net sales of $933 million, up 16% year over year.
Etzkorn noted the quarter included $3.9 million of restructuring costs tied to the closure of the company’s glass operations in Ireland.
OEM growth led by RV content gains and acquisitions
Lippert said OEM segment net sales increased 18% to $737 million in the quarter. RV OEM revenue rose 17%, which management attributed to market share gains, increased sales of newer products, and a mix shift toward higher-content units. Etzkorn added that RV OEM growth was also driven by sales price increases related to higher material costs and a favorable mix shift toward higher-content fifth-wheel units.
In other OEM end markets—transportation, marine, and housing—Lippert said net sales grew 21% year over year to $297 million (or 8% on an organic basis). He said the growth was primarily tied to market share gains and content growth with North American utility trailer, bus, and marine OEM customers. Lippert also highlighted that bus-related content contributed $31 million of the year-over-year growth in the quarter, reflecting acquisitions of Freedman Seating and Trans/Air, and said integration efforts and synergies were “ahead of plan.”
The company emphasized product content expansion as a key strategy. Lippert said total content per unit increased 11% year over year in the fourth quarter to $5,670, marking what he called the largest year-over-year content growth in the past five years. Etzkorn added that content per motorized unit rose 7% to $3,993.
Management also pointed to the revenue contribution from newer products. Lippert said the company’s five most recently launched products are generating an annualized revenue run rate of about $225 million. He cited growth in air conditioner shipments from 50,000 units in 2023 to more than 200,000 units “last year,” and said the company is scheduled to build over 4,500 patented Sundeck patio systems in 2026, contributing more than $4,000 in revenue per unit.
Aftermarket: RV demand and an auto opportunity tied to a competitor’s bankruptcy
LCI’s aftermarket segment grew in the quarter, though margins were pressured. Lippert said aftermarket net sales increased 8% year over year to $196 million, attributing the performance to the company’s OEM-installed proprietary parts base that later drives replacement and repair demand. He said the company has embedded more than $20 billion of replaceable content into RVs over the past decade and expects about 1.5 million RVs to enter the repair and replacement cycle over the next one to three years.
Etzkorn said aftermarket operating margin was 4.3% in the fourth quarter, down from 7.9% a year earlier. She attributed the decline to higher material costs related to tariffs as well as higher steel, aluminum, and freight costs, a mix shift toward lower-margin products, and investments in capacity, distribution, and logistics technology to support aftermarket growth.
On the automotive aftermarket side, Lippert highlighted a potential share gain opportunity, saying First Brands—owner of LCI’s largest competitor in the hitch and towing space—has experienced operational challenges tied to a complex bankruptcy process. He said customers are seeking stable long-term partners and that LCI estimates the potential opportunity at approximately $50 million annually, though he emphasized it is still early.
The company also discussed infrastructure moves, including transitioning into a 600,000-square-foot distribution center in South Bend, Indiana, and preparing to open a new manufacturing facility in Seguin, Texas, later in 2026 to support its Ranch Hand truck accessory business.
2026 outlook: revenue, margins, and industry expectations
For 2026, management guided to consolidated revenue of $4.2 billion to $4.3 billion, operating margin of 7.5% to 8%, and adjusted diluted EPS of $8.25 to $9.25. Etzkorn said January net sales were approximately $343 million, up 4% from the prior year, and indicated that level was indicative of how the first quarter is trending. She also said the company expects to “step into” the full-year operating margin range through the year rather than start there in the first quarter.
Management’s end-market assumptions included:
- RV wholesale shipments: 335,000 to 350,000 units in 2026
- Marine: flat to up low single digits
- Transportation: flat, with contributions from the 2025 Freedman and Trans/Air acquisitions
- Housing: low single-digit growth, aided by residential window products
- Aftermarket: mid-single-digit growth
In response to questions, Lippert said the company’s guidance does not factor in potential rate cuts and is based on a “steady state” view, with growth planned to come from market share gains and other initiatives. He described the RV recovery as a slow process following a sharp post-COVID downturn and said a more normalized near-term RV shipment range could be “somewhere” around 375,000 to 415,000, while reiterating the view that the industry could ultimately return to 500,000-plus units once it becomes healthier.
Cost actions, capital allocation, and balance sheet
The company reiterated a focus on efficiency initiatives and facility consolidation. Lippert said LCI plans to complete 8 to 10 facility consolidations in 2026 on top of five completed in 2025, while continuing to evaluate divestitures of select lower-margin businesses and accelerate automation and fixed-cost reductions. During Q&A, Etzkorn said the timing of 2026 consolidations will vary throughout the year, while the company will see the full-year benefit of last year’s consolidations.
On capital allocation, Lippert said the company ended 2025 with net debt to adjusted EBITDA of 1.8x and emphasized liquidity that included over $200 million in cash and equivalents and full availability under a $595 million revolving credit facility. Etzkorn reported year-end cash and cash equivalents of $223 million, with cash provided by operating activities of $331 million in 2025. She also noted $147 million of investment-related cash outlays, including $53 million of capital expenditures and $113 million of acquisitions during the year.
Shareholder returns remained a priority. Lippert said the dividend was yielding about 3%, and management reported returning $243 million to shareholders in 2025, including $114 million in dividends and $129 million in share repurchases. Etzkorn said the company expects 2026 capital expenditures of $60 million to $80 million and intends to continue dividends and opportunistic repurchases while maintaining a target leverage ratio of 1.5x to 2x net debt to EBITDA.
About LCI Industries (NYSE:LCII)
LCI Industries is a publicly traded manufacturer specializing in engineered components and systems for the recreation vehicle (RV), marine and housing industries. The company develops and supplies a diverse range of products designed to enhance comfort, convenience and functionality in mobile and leisure applications. LCI Industries serves original equipment manufacturers (OEMs) and aftermarket customers throughout North America.
The company’s core offerings include power conversion and control systems, slideout mechanisms, entry and docking products, seating and furniture solutions, as well as window and door assemblies.
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