Q2 2024 Earnings Summary
Reported on Jul 23, 2024 (After Market Close)
Pre-Earnings Price$66.34Last close (Jul 23, 2024)
Post-Earnings Price$66.75Open (Jul 24, 2024)
Price Change
$0.41(+0.62%)
- Strong demand for new home sales, with Q2 home sales up 13% year-over-year to 225 units, which is considered favorable even compared to pre-COVID levels.
- Continued conversion of transient RV customers to longer-term seasonal and annual customers, supporting future revenue stability and growth.
- Transient revenue increased 10% year-over-year over the July 4th weekend, demonstrating strong consumer demand and the potential for revenue growth in the transient segment.
- Declining RV Demand Post-Pandemic Surge: The company is experiencing a normalization or decline in RV demand following the COVID-19 surge. Seasonal and transient RV revenues, as well as Thousand Trails memberships, are below 2021 levels, raising concerns that demand might retrench back to 2019 levels. The executives acknowledge that they are "burning through the last" of the pandemic-related boost this summer season.
- High Churn Rates Among New Memberships: The Camping Pass customers are exhibiting a high attrition rate of approximately 33%, indicating potential challenges in sustaining membership revenue growth. In contrast, legacy members (those with memberships spanning 20 years or more) have a much lower attrition rate of about 7%. This significant turnover among newer members could impact long-term revenue stability.
- External Factors Negatively Impacting Revenue: Adverse weather conditions, such as cool and wet weather in key markets, along with a mild winter reducing seasonal extensions, have negatively impacted transient and seasonal revenues. Additionally, the company is losing revenue from hurricane workers and traveling nurses who are no longer staying at their properties. There is also mention of new supply in certain markets, which, although limited, is affecting revenue in those areas. These factors could continue to exert downward pressure on revenues.
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