Shares of recreational vehicle makers are outperforming the broad market after peer Thor Industries (THO) reported second quarter financial results Monday night. The RV maker reported revenues up 57% from last year to $2.02B, beating analyst estimates of $1.96B. Earnings per share were up 42% for the quarter to $2.11 per share as analysts were expecting $1.88 per share. According to the company, the strong growth in revenues and earnings was a combination of organic growth in both towable and motorized RVs, and the inclusion of the results from Jayco, which was acquired on June 30, 2016. "We continue to see strength in the RV market, as dealers and consumers remain optimistic and the prospects for continued industry growth remain strong," said Thor CEO Bob Martin. Martin referred to the "surging popularity" of the company's RVs, as younger consumers are attracted to the RV market. Thor added that Gen X and Millennials are helping to drive the growth in the RV market, as "younger campers looking for affordable recreation experiences." Looking ahead, Thor sees double-digit growth in revenues and earnings in Q4 despite a difficult comparison to the unusually high margins achieved in Q4 of 2016.

LABOR MARKET HEADWIND: The labor market in Northern Indiana has been tight due to Thor and other industry players adding capacity, said Martin. "Our team's foresight into this issue has resulted in several initiatives designed to minimize the impact of the labor challenges. When possible, we have focused our expansion efforts in outlying areas, such as Howe, Middlebury and Goshen, Indiana, where we can draw from a different geographic labor pool," added the CEO.

PRICE ACTION: Shares of Thor Industries are up more than 11% to $105.29. Peer Winnebago (WGO) is up 10% to $29.30, while Polaris (PII) is up 2.5% to $86.93 per share.