Camping World Holdings, Inc. is experiencing what most in the RV space have been facing for the last year, but the good news is the market is starting to anniversary the declines of 2023 and seeing some moderation in the still declining business. The other good news for Camping World is the increase in new vehicle sales in the first quarter of 2024 as manufacturers cut prices on the new 2024 models which cut into used vehicle sales.
CWH reported that revenue for the first quarter decreased $122.9 million, or 8.3 percent, year-over-year to $1.4 billion.
- New vehicle revenue was $656.1 million for the first quarter, an increase of $9.3 million, or 1.4 percent, and new vehicle unit sales were 16,882 units, an increase of 2,970 units, or 21.3 percent. Same-store new vehicle unit sales increased 15.5 percent for the quarter.
- Used vehicle revenue was $337.7 million for the first quarter, a decrease of $107.1 million, or 24.1 percent, and used vehicle unit sales were 10,694 units, a decrease of 1,738 units, or 14.0 percent. Same-store used vehicle unit sales decreased 17.3 percent.
- The average selling price of new vehicles declined 16.4 percent during the first quarter, driven primarily by the lower cost of 2024 model year travel trailers, the discounting of pre-2024 model year new vehicles, and a mixed shift towards more affordable travel trailers.
- The average selling price of used vehicles declined 11.7 percent during the first quarter due to the discounting of used vehicles in response to declines in new vehicle prices to maintain used vehicles as a lower-cost alternative to new vehicles.
- Products, services, and other revenue were $177.9 million, a decline of $29.8 million, or 14.3 percent, primarily driven by a reduction in sales activity resulting from our Active Sports Restructuring, and fewer used vehicles sold led to a decline in retail product attachment to vehicle sales.
Gross profit was $402.4 million, a decrease of $38.6 million, or 8.8 percent, year-over-year. Total gross margin was 29.5 percent, a reduction of 16 basis points. These decreases were driven by lower average cost and average selling price of model year 2024 new vehicles, which impacted used vehicles by requiring the reduction in the used vehicle average selling price and lower used inventory levels from slowed procurement of used vehicles to allow RV owners pricing expectations to adjust as a result of model year 2024 pricing declines.
Selling, general and administrative expenses were $371.5 million, an increase of $5.7 million, or 1.6 percent, primarily as a result of additional advertising expenses and professional fees and services, partially offset by reduced employee compensation costs, which was accomplished despite the 10.3 percent increase in store locations.
Floor plan interest expense was $27.9 million, an increase of $7.1 million, or 34.0 percent, and other interest expense, net was $36.1 million, an increase of $5.0 million, or 16.0 percent. These increases were primarily a result of the rise in interest rates and higher principal balances.
Net loss was $50.8 million for the first quarter of 2024, a change of $55.7 million from net income of $4.9 million for the first quarter of 2023.
Diluted loss per share of Class A common stock was $(0.51) for the first quarter of 2024 versus diluted earnings per share of Class A common stock of $0.05 for the first quarter of 2023. Adjusted loss per share diluted of Class A common stock was $(0.40) for the first quarter of 2024 versus adjusted earnings per share – diluted(1) of Class A common stock of $0.14 for the first quarter of 2023.
Adjusted EBITDA was $8.2 million, a decrease of $52.6 million, or 86.5 percent, primarily due to $38.6 million decrease in gross profit, the $7.1 million increase in floor plan interest and the $5.7 million increase in selling, general and administrative expenses.
Marcus Lemonis, chairman and CEO, stated, “Our intentional efforts to drive down invoice pricing and widen the consumer affordability funnel resulted in our new unit sales meaningfully outpacing broader RV industry trends. We drove record new unit market share for January and February. Our same-store new vehicle unit volume increased double-digits in the quarter, with momentum continuing through April.”
Matt Wagner, chief operating officer, commented, “We have been successful in rebalancing our used inventory position, and now that market pricing has stabilized, we intend to reinvest in building our stocking levels in a disciplined manner over the coming months. We continue to expect our used business to improve as we move through the balance of the year.”
Lemonis concluded, “With significant new unit volume momentum and a dominant inventory position, we believe we have laid the groundwork for improving fundamentals going forward. Our team remains laser-focused on achieving our unit volume, market share, and earnings growth goals for 2024 while continuing our march to 320 locations by 2028.”
Image courtesy Camping World Holdings
See below for more SGB Media coverage of the RV market trends for spring 2024:
