Camping World Holdings ((CWH)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Camping World Holdings was marked by a generally positive sentiment, highlighting robust sales performance and significant market share gains, particularly in the used RV segment, finance, and insurance. However, the company also acknowledged ongoing challenges, such as headcount reductions, pressure on new RV average selling prices (ASPs), and the need to achieve their SG&A reduction goals.
Record RV Sales
Camping World set a new benchmark by selling 45,000 RV units in the second quarter, marking the highest sales in any quarter to date. This achievement underscores the company’s strong position in the RV market and its ability to capitalize on consumer demand.
Finance and Insurance Revenue Record
The finance and insurance department of Camping World generated an impressive $200 million in revenue, setting a new record for the company. This highlights the effectiveness of their financial services in driving additional revenue streams.
Good Sam Revenue Record
Good Sam, a subsidiary of Camping World, also reached a record revenue number for the quarter, contributing to the overall financial success of the company.
Significant Market Share Gain
Camping World achieved a significant market share gain, capturing over 14% of all new and used RVs registered in North America year-to-date. This demonstrates the company’s competitive edge and strong market presence.
Strong Used RV Growth
The company reported strong growth in used RV sales, with expectations of continued double-digit growth. This growth is driven by effective procurement strategies that have resulted in record purchases.
SG&A Improvements
There was a notable improvement in SG&A as a percentage of gross profit, which improved by 276 basis points year-over-year. This indicates progress in cost management and operational efficiency.
Strong Balance Sheet
Camping World maintains a robust balance sheet with $118 million in cash, $519 million of used inventory net of flooring, $193 million of parts inventory, and $247 million of real estate without a mortgage, reflecting a solid financial position.
Headcount Reduction
The company has reduced its workforce by 1,000 people since January, a move likely aimed at improving operational efficiency and reducing costs.
Pressure on New RV ASPs
There is pressure on the average selling prices for new RVs, which is impacting the gross profit per transaction. This remains a challenge for the company as it navigates market conditions.
Challenges in SG&A Reduction
Despite making progress, Camping World has not yet achieved its goal of reducing SG&A by 600 to 700 basis points, indicating an area that requires further attention.
Dependency on Used RV Sales for Growth
The company’s growth strategy is heavily reliant on used RV sales, given the challenging conditions in the new RV market. This dependency highlights the importance of maintaining strong performance in the used segment.
Forward-Looking Guidance
Looking ahead, Camping World has set ambitious goals, including improving SG&A by 600 to 700 basis points and focusing on double-digit growth in used RV sales. They anticipate a modest increase in the new RV market in 2026, with a potential rise of 15,000 to 20,000 units. The company aims for over $500 million in adjusted EBITDA and plans to enhance gross margins by 100 basis points over the next 18 months. Additionally, significant strides have been made in reducing long-term debt, supported by a strong cash position of $118 million.
In summary, the earnings call for Camping World Holdings reflected a positive outlook with strong sales performance and market share gains, particularly in the used RV segment. While challenges remain, the company’s strategic focus on SG&A improvements and used RV sales positions it well for future growth. Investors and market watchers will be keen to see how Camping World navigates the evolving market dynamics and achieves its forward-looking goals.