Camping World Sees Q4 Loss, YOY Record Used Revenue – RVBusiness – Breaking RV Industry News

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LINCOLNSHIRE, Ill. – Camping World Holdings, Inc. (NYSE: CWH), America’s Recreation Dealer, today reported results for the year and fourth quarter ended Dec. 31, 2023.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holding, Inc. said, “Beginning in December, our new vehicle same store unit growth turned positive, with January and February to date trending up from mid-single to low-double digits. We achieved our goal of significantly improving our new unit inventory position, with less than 7,500 new model year 2023’s remaining as of today. We believe we are outpacing the industry with close to 80% in 2024 models currently. We believe that successful negotiations in year-over-year pricing reductions on like-for-like new units has sparked early demand and new gross margin stabilization.”

Matt Wagner, Chief Operating Officer of Camping World Holdings Inc. said, “Any reduction of new model pricing causes us to reset used vehicle values and slow down the purchases of used RV inventory while market values correct themselves. We expect this short-term maneuver to allow used vehicle volumes to improve over time, with gross margin improvement beginning in the second quarter and continuing through the balance of the year.”

Wagner concluded, “Positive demand trends, inventory discipline, strength in our Good Sam segment and the service and parts portion of our business, acquisitions, and cost reductions, give us confidence in delivering unit volume and strong earnings growth in 2024 while continuing our march to 320 locations by 2028.”

Full Year-over-Year Operating Highlights

Revenue was $6.2 billion, a decrease of $740.5 million, or 10.6%.
Used vehicle revenue was a record $2.0 billion, an increase of $102.0 million, or 5.4%, and used vehicle unit sales were a record 56,823 units, an increase of 5,498 units, or 10.7%.
New vehicle revenue was $2.6 billion, a decline of $651.8 million, or 20.2%, and new vehicle unit sales were 58,731 units, a decrease of 11,698 units, or 16.6%.
Average selling price of new and used vehicles declined 4.3% and 4.8%, respectively.
Same store used vehicle unit sales increased 5.0%, and same store new vehicle unit sales decreased 22.1%.
Products, services and other revenue was $870.0 million, a decline of $129.2 million, or 12.9%, driven largely by lower demand and lower stocking levels of lifestyle and activities, and design and home products, as well as decreases in our direct to manufacturer RV furniture revenues due to RV manufacturer production slowdowns and discounting and discontinuation of certain product categories related to our Active Sports Restructuring.
Gross profit was $1.9 billion, a decrease of $383.6 million, or 17.0%. Total gross margin was 30.2%, a decrease of 230 basis points. The decrease in gross profit and gross margin was driven largely by the decrease in average selling price of new and used vehicles and gross profit was further impacted by the decrease in combined RV unit sales and the related decrease in finance and insurance, net. This decrease was partially offset by the $14.3 million increase in gross profit and 682 basis point increase in gross margin of the Good Sam Services and Plans segment.
Selling, general and administrative expenses were $1.5 billion, a decrease of $68.0 million, or 4.2%, primarily due to approximately $49.2 million of reduced advertising expenses and $35.1 million of reduced variable compensation costs, partially offset by incremental costs related to the net six additional store locations added during the year ended December 31, 2023.
Floor plan interest expense was $83.1 million, an increase of $41.0 million, or 97.7%, and other interest expense, net was $135.3 million, an increase of $59.5 million, or 78.6%. These increases were primarily as a result of the rise in interest rates.
Net income was $50.6 million, a decrease of $300.4 million, or 85.6%.
Diluted earnings per share of Class A common stock was $0.55 in 2023 versus diluted earnings per share of Class A common stock of $3.22 in 2022. Adjusted earnings per share – diluted⁽¹⁾ of Class A common stock was $0.81 in 2023 versus adjusted earnings per share – diluted⁽¹⁾of Class A common stock of $4.17 in 2022.
Adjusted EBITDA⁽¹⁾ was $286.2 million, a decrease of $367.2 million, or 56.2%.
New and used vehicle inventories were $1.8 billion, a decrease of $32.1 million.
The Company paid an annualized cash dividend of $1.50 per share of Class A common stock, a decrease of $1.00 per share of Class A common stock.

Fourth Quarter-over-Quarter Operating Highlights

Revenue was $1.1 billion for the fourth quarter, a decrease of $171.0 million, or 13.4%.
Used vehicle revenue was $321.7 million for the fourth quarter, a decrease of $70.9 million, or 18.1%, and used vehicle unit sales were 9,492 units, a decrease of 842 units, or 8.1%.
New vehicle revenue was $449.4 million for the fourth quarter, a decline of $32.3 million, or 6.7%, and new vehicle unit sales were 10,717 units, an increase of 328 units, or 3.2%.
Average selling price of new and used vehicles declined 9.6% and 10.8%, respectively, during the fourth quarter. As the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, the Company actively discounted certain used vehicles and certain pre-2024 model year new vehicles during the fourth quarter to reduce inventory levels of aged vehicles.
Same store used vehicle unit sales decreased 11.2% for the fourth quarter, and same store new vehicle unit sales decreased 2.2%.
Products, services and other revenue was $179.0 million, a decline of $58.3 million, or 24.6%, driven largely by lower demand and lower stocking levels of lifestyle and activities, and design and home products, as well as discounting and discontinuation of certain product categories related to our Active Sports Restructuring.
Gross profit was $343.4 million, a decrease of $48.2 million, or 12.3%. Total gross margin was 31.0%, an increase of 37 basis points. The decrease in gross profit was driven largely by the new and used vehicle discounting as discussed above.
Selling, general and administrative expenses were $337.1 million, a decrease of $24.4 million, or 6.7%, primarily as a result of our efforts to reduce expenses.
Floor plan interest expense was $21.8 million, an increase of $4.2 million, or 24.1%, and other interest expense, net was $35.4 million, an increase of $9.4 million, or 36.2%. These increases were primarily as a result of the rise in interest rates.
Net loss was $49.9 million, a decrease of $7.3 million, or 12.7%.
Diluted loss per share of Class A common stock was $0.49 in 2023 versus diluted loss per share of Class A common stock of $0.79 in 2022. Adjusted loss per share – diluted⁽¹⁾ of Class A common stock was $0.47 in 2023 versus adjusted loss per share – diluted⁽¹⁾of Class A common stock of $0.20 in 2022.
Adjusted EBITDA⁽¹⁾ was a negative $8.9 million, a decrease of $29.1 million, or 144.1%.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s fourth quarter and fiscal year 2023 financial results and 2024 outlook is scheduled for February 22, 2024, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13743788. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of December 31, 2023, the Company owned 52.9% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

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