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    Camping World Holdings Inc (CWH)

    Q3 2024 Earnings Summary

    Reported on May 1, 2025 (After Market Close)
    Pre-Earnings Price$22.89Last close (Oct 29, 2024)
    Post-Earnings Price$23.12Open (Oct 30, 2024)
    Price Change
    $0.23(+1.00%)
    • Aggressive M&A Strategy and Market Share Expansion: The company’s disciplined approach to dealership acquisitions—targeting 12 to 15 stores (and sometimes more) annually with historically strong returns (over 20% annualized cash-on-cash)—supports future volume growth and enhanced market share, offering an attractive growth pathway.
    • Robust Used Segment Rebound: The management expects low to mid double-digit growth in the used unit volume with margin improvements targeting a rebound from 19–19.5% to near 20% as the year advances. This turnaround, bolstered by enhanced auction performance and market-making initiatives, provides a bullish catalyst for earnings.
    • Improving New RV Margins and Pricing Stability: With new vehicle gross margins expected to near a steady 14% to 14.5% range and management focused on effective inventory management and slight ASP enhancements, the company is poised to translate modest new unit sales growth into solid gross profit improvements.
    • Margin Pressure from New Motorized Sales: Management noted that while aggressive new motorized RV sales helped volume, they came with lower margins compared to traditional segments, potentially pressuring overall profitability if market mix shifts unfavorably.
    • Volatility in Used Inventory Margins: Uncertainty remains around used inventory procurement and margin recovery—management’s reliance on seasonal procurement cycles and cautious margin targets could lead to continued volatility and weaker earnings performance.
    • Execution and Store Count Risks in M&A Strategy: The discussion on net dealership declines and the heavy reliance on acquisitions to drive market share highlights risks; any slowdown in quality M&A opportunities or unfavorable market conditions could hinder growth and operational execution.
    1. New RV Margins
      Q: Why were new margins pressured?
      A: Management explained that while new unit sales surged—particularly in the motorized segment—the margin percentage was lower due to a heavier mix of higher-priced units. However, the overall gross dollars increased, and they expect margins to stabilize in Q4.

    2. SG&A/EBITDA Outlook
      Q: What are Q4 SG&A and EBITDA expectations?
      A: They noted that Q4 remains seasonally challenging with higher SG&A, but for 2025 they’re targeting a 600-700 basis point improvement, aiming ultimately for SG&A levels in the low 70% range of gross profit.

    3. New Unit Growth
      Q: Does modest growth assume share gains/acquisitions?
      A: Management anticipates modest new unit growth driven by an improved market alongside incremental share gains from organic efforts and strategic acquisitions.

    4. Store Count/Acquisitions
      Q: What is your outlook for store counts to 2025?
      A: They plan to pursue roughly 12-15 acquisitions annually—and sometimes more—while disposing of underperforming dealers, steadily progressing toward a path of 320 locations.

    5. Industry Sensitivity
      Q: How sensitive is the outlook to industry changes?
      A: The team remains cautious about industry fluctuations, projecting retail unit ranges of 350,000-360,000 units and emphasizing disciplined M&A to navigate potential upsides and downsides.

    6. Used Market Maker
      Q: How will the used market maker strategy evolve?
      A: They plan to enhance market liquidity by actively buying and reselling used units, leveraging tools such as the Good Sam Valuator to validate prices and capitalize on arbitrage opportunities.

    7. Margin Cadence
      Q: What margin range are you forecasting going forward?
      A: Management is targeting normalized new RV margins in the 14%-14.5% range during robust mid-cycle periods, expecting seasonal improvements as inventory pressures ease.

    8. Inventory Positioning
      Q: How has your inventory strategy adjusted?
      A: The approach now features a strong mix, with over half of the new inventory already for model year 2025, supporting stable pricing and easing margin concerns.

    9. F&I Attachment
      Q: Any difference in F&I rates for new vs. used units?
      A: They observed that F&I attachment tends to be slightly lower for used vehicles—around 12.5% compared to the higher rates on new units—though higher ASPs help keep overall dollar contributions steady.

    10. Private Label Strategy
      Q: How will private label drive growth?
      A: The evolved contract manufacturing model now spans 36 exclusive brands, enabling the company to differentiate its products and widen its market penetration across varied segments.

    11. Inventory Competition
      Q: How do competitor inventory practices affect you?
      A: Management highlighted that disciplined inventory management gives them a competitive edge; while some dealers struggle with aging stock—especially in the diesel segment—this reinforces their strategic positioning.

    12. Storm Impact
      Q: How did recent storms affect operations?
      A: Severe weather caused 25-30 store closures in a region, resulting in a temporary loss of 300-400 new units, though overall performance remained robust despite the setback.

    13. Used Procurement
      Q: How are you sourcing used inventory?
      A: They are following a seasonal strategy targeting a 3.5 turn rate, ensuring that the used inventory levels align with forecasted market demand while remaining flexible.

    14. Service Performance
      Q: How did parts and service perform?
      A: Customer pay in the service segment increased on a single-digit percentage basis year-over-year, reflecting steady performance in this crucial area.

    15. Class C Strategy
      Q: Are you adjusting your Class C mix amid rate cuts?
      A: They aim to lower monthly payments by engaging in smarter procurement without decontenting the product, thereby enhancing affordability and maintaining high value within the Class C segment.