(Radio Iowa) – Winnebago Industries executives say high interest rates and weak demand are contributing to declining sales. Winnebago makes recreational vehicles at facilities in Forest City, Lake Mills, Charles City and Waverly. The company’s reporting revenue in the first quarter of its fiscal year was 763-million dollars –a decrease of almost 20 percent compared to the first quarter of last year. Winnebago C-E-O Michael Happe says his company knew when the fiscal year started in September that there were many obstacles ahead.

“Consumer confidence was unsteady given macroeconomic factors,” Happe said. “Affordability of the RV and boating lifestyle, while still competitive with other forms of leisure travel, had become difficult for potential new customers, and dealers were aggressively managing inventory by constraining inbound wholesale shipments.”

Happe says those challenges will continue into the company’s second quarter. “We believe continued strong wholesale constraints during a seasonally-lighter retail period of the year in December through February, and subsequent further reduced production by our businesses over the holidays will also have a similar impact on Q2 financial results as well,” Happe said.

Gross profit for Winnebago in its first quarter was down 28 percent when compared to the same quarter last year.