Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Camping World Holdings Inc (CWH, Financial) successfully raised $330 million of growth capital and extended its RV floor plan facility by $300 million, providing a total of $2.150 billion in runway.
- The company achieved record combined new and used market share of 11.2% in 2024 and expects to reach 12% in 2025, with plans to sell over 130,000 units.
- CWH anticipates significant improvement in total gross profit and a 600 to 700 basis point improvement in SG&A for 2025.
- The used procurement process is in full swing, with January and February setting records, and the company expects purchase volume to accelerate.
- CWH is experiencing solid momentum in both new and used businesses, with used same store sales increasing in the high teens in January and new same store unit sales up in low single digits.
Negative Points
- The company faced erratic weather patterns in February, which impacted sales, although pent-up demand was observed once the weather improved.
- CWH had an adjusted EBITDA loss of $2.5 million in the fourth quarter, although this was an improvement from the previous year's loss.
- Higher than expected insurance claim costs affected SG&A for the quarter.
- The macroeconomic environment remains uncertain, with potential impacts from tariffs and interest rate fluctuations.
- CWH's leverage is a concern, and the company is focused on reducing it by the end of 2025 through various measures, including deleveraging and improving earnings.
Q & A Highlights
Q: Marcus, you sounded constructive on new ASPs. Is this due to rates coming down, allowing buyers to afford more expensive units, or is there another mix dynamic?
A: Marcus Lemonis, CEO: ASPs typically start lower in the year and rise as we move into Q3 and Q4. The 10-year treasury yield's stabilization and potential reduction could lead to retail finance rate relief, allowing customers to afford more expensive units without a significant payment increase. We aim for an annual ASP of $40,000 on new and $32,000 on used units.
Q: How much of the SG&A improvement is from growth in profit dollars versus discrete cost savings?
A: Marcus Lemonis, CEO: While some improvement comes from overall gross profit growth, significant SG&A improvements are planned through difficult decisions, including headcount reductions. We are committed to achieving a 600 to 700 basis point improvement in SG&A, adjusting as necessary to meet this target.
Q: What informs your view of green shoots in the RV landscape, and how has show season feedback been?
A: Marcus Lemonis, CEO: We see positive signs from manufacturer shipments and dealer restocking. Foot traffic and lead volume are strong, with better conversion rates and margins. Used inventory values are stable, indicating consumer confidence. We expect a better year for the industry if manufacturers maintain discipline and dealers restock appropriately.
Q: Can you discuss the change in your inventory mix year-on-year on the new side?
A: Marcus Lemonis, CEO: We stock inventory based on consumer demand, focusing on price points and monthly payments consumers can afford. Our exclusive brand line and contract manufacturing are performing well, ensuring we capture demand across segments. We aim to sell 130,000 units this year, regardless of type or price.
Q: How do you view the used RV opportunity in 2025 compared to new?
A: Marcus Lemonis, CEO: We are focused on ramping up used RV procurement, having bought more units in January and February than ever before. The used market is crucial for our EBITDA growth and leverage reduction. We are committed to improving used margins and see it as a significant opportunity for profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
