Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Camping World Holdings Inc (CWH, Financial) achieved record market share and continued strength in its Good Sam business, despite RV industry headwinds.
- The company reported a 31% increase in new unit sales, driven by strong performance in Class C motorhomes.
- CWH has a clear path to expand its dealership locations from over 200 to 320, leveraging a favorable M&A environment.
- The company is focusing on innovative product development, with 36% of new unit sales coming from exclusive contract-manufactured RVs.
- CWH's online and physical auction platforms are enhancing liquidity in the RV market, providing a competitive edge.
Negative Points
- Used unit sales declined by 18%, impacting overall revenue growth.
- The company faced challenges with interest rates and macroeconomic headwinds, affecting consumer payment sensitivity.
- SG&A as a percentage of gross profit is higher than desired, with a target to improve by 600 to 700 basis points.
- CWH experienced operational disruptions due to back-to-back storms affecting 25 to 30 locations.
- The company acknowledges a need to improve customer retention in service bays, particularly in the second, third, and fourth years of ownership.
Q & A Highlights
Q: Can you provide an outlook for new unit growth next year, and does it assume any acquisitions?
A: Marcus A. Lemonis, CEO: We believe the new market will perform better than in 2024, and we expect modest increases. Our goal is to continue gaining market share.
Q: How do you see the used RV market trending over the next few quarters?
A: Matthew D. Wagner, President: We've been judicious in procuring used inventory. We expect low double-digit to mid-double-digit growth in that category and aim to return to historical gross margin levels by the end of 2024.
Q: What impact did recent storms have on your operations, and do you expect any replacement demand?
A: Marcus A. Lemonis, CEO: The storms affected many stores, but we didn't see widespread devastation. We missed out on some sales, but overall, our team performed well. We haven't seen significant replacement demand yet.
Q: How do you plan to use private label products to distinguish yourself in the market?
A: Marcus A. Lemonis, CEO: We focus on contract manufacturing, partnering with manufacturers to develop innovative products. This approach allows us to offer unique products and gain a competitive advantage.
Q: Can you discuss your strategy for being a market maker in the used RV segment?
A: Matthew D. Wagner, President: We aim to grow our market share by buying and selling used units efficiently. Our auction network and RVs.com platform help us create a robust marketplace and provide liquidity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
