Record Sales of Used RVs Highlight Camping World’s Q2 – RVBusiness – Breaking RV Industry News

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LINCOLNSHIRE, Ill. – Highlighted by a record number of used vehicle sales, Camping World Holdings Inc. (NYSE: CWH), reported results for the second quarter ended June 30, 2023.

“We sold the most used units in our company’s history, with record-setting used vehicle gross profit. We’ve opened, acquired, or signed letters of intent on 30 dealership locations year-to-date. The unprecedented influx of acquisition opportunities has continued and the pipeline is robust. We plan to capitalize on it as we invest ahead of anticipated revenue growth in 2024 and beyond,” stated Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings Inc. (CWHI).

Second Quarter-over-Quarter Operating Highlights

Revenue was $1.9 billion for the second quarter, a decrease of $267.9 million, or 12.4%.
Used vehicle revenue was a record $623.0 million for the second quarter, an increase of $67.0 million, or 12.1%, and used vehicle unit sales were a record 17,774 units, an increase of 2,219 units, or 14.3%.
New vehicle revenue was $800.9 million for the second quarter, a decline of $276.3 million, or 25.7%, and new vehicle unit sales were 18,897 units, a decrease of 4,507 units, or 19.3%.
Products, service and other revenue was $247.8 million for the second quarter, a decline of $30.2 million, or 10.9%. The decrease was driven by declines in our direct to manufacturer RV furniture revenues due to manufacturer shutdowns, our Active Sports Restructuring, and discounting to reduce inventory levels.
Same store used vehicle unit sales increased 8.8% for the second quarter, and same store new vehicle unit sales decreased 23.7%.
Gross profit was $571.1 million, a decrease of $145.7 million, or 20.3%. Total gross margin was 30.0%, a decrease of 301 basis points. The decrease in gross profit was driven largely by the decrease in new vehicle revenue and related finance and insurance revenue. The decrease in gross margin was primarily the result of lower average selling prices of new vehicles, which was partially offset by the increased sales mix of higher margin used vehicles.
Floor plan interest expense was $20.7 million, an increase of $11.9 million, or 136.7%, primarily as a result of the rise in interest rates. Other interest expense, net was $33.5 million, an increase of $18.6 million, or 124.4%, primarily as a result of the rise in interest rates and a higher average principal balance.
Net income was $64.7 million, a decrease of $133.3 million, or 67.3%, driven primarily by the pretax $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, the $18.6 million increase in other interest expense, net, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses and lower income tax expense from these net reductions of pretax income.
Diluted earnings per share of Class A common stock was $0.64 in 2023 versus diluted earnings per share of Class A common stock of $2.01 in 2022. Adjusted earnings per share – diluted⁽¹⁾of Class A common stock was $0.73 in 2023 versus adjusted earnings per share – diluted⁽¹⁾of Class A common stock of $2.16 in 2022.
Adjusted EBITDA⁽¹⁾was $139.3 million, a decrease of $138.4 million, or 49.8%, driven primarily by the $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses⁽²⁾.

(1) Adjusted earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release.

(2) The $20.2 million decrease in selling, general, and administrative expenses includes a $2.5 million decrease in equity-based compensation. Equity-based compensation is excluded from the calculation of Adjusted EBITDA (see the “Non-GAAP Financial Measures” section later in this press release).

Earnings Conference Call and Webcast Information

A conference call to discuss the company’s second quarter 2023 financial results is scheduled for 7:30 a.m., Central Time, Aug. 2, 2023. 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# 13739824. 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.

Dividend

In a separate release, CWHI announced that its Board of Directors declared a regular cash dividend of $0.125 per share of the company’s Class A common stock. Payment is expected to be made on September 29, 2023 to stockholders of record at the close of business on September 14, 2023.

After concluding its review of the company’s capital allocation strategy, the Board has elected to modify its quarterly dividend to reflect the prioritization of capital allocation towards RV dealership acquisitions. Since Jan. 1, 2023, the Company has opened, acquired, or signed letters of intent with over 30 RV dealership locations.

Future declarations of quarterly dividends are subject to the determination and discretion of Camping World’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess or surplus of tax distributions received from CWGS Enterprises, LLC, its business prospects and other factors that Camping World’s Board of Directors may deem relevant.

Source: https://rvbusiness.com/record-sales-of-used-rvs-highlight-camping-worlds-q2/