Camping World Holdings, Inc. reported third quarter revenue was $1.7 billion , a decrease of $126.1 million, or 6.8 percent, from the third quarter of 2022.

  • Used vehicle revenue was a record $590.2 million for Q3, an increase of $64.2 million, or 12.2 percent, and used vehicle unit sales were a record 17,125 units, an increase of 2,665 units, or 18.4 percent.
  • New vehicle revenue was $679.2 million for quarter, a decline of $154.9 million, or 18.6 percent, and new vehicle unit sales were 15,205 units, a decrease of 2,411 units, or 13.7 percent.
  • Average selling prices of new and used vehicles declined 5.7 percent and 5.2 percent, respectively, during the third 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 in Q3 to reduce inventory levels of aged used vehicles.

Products, service and other revenue was $235.6 million for the third quarter, a decline of $33.3 million, or 12.4 percent. The decrease was driven largely by lower demand and lower stocking levels of lifestyle, activities, design, and home products, as well as declines in the direct-to-manufacturer RV furniture revenues due to RV manufacturer production slowdowns and discounting related to our Active Sports Restructuring.

Same-store used vehicle unit sales increased 10.9 percent for the third quarter and same-store new vehicle unit sales decreased 21.5 percent.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “We are laser-focused on the final stages of cleansing our inventory going into 2024. These actions have come with near-term gross margin compression, but we believe now is the moment to put the finishing touches on our industry-leading inventory position and prepare the business for the next up-cycle. In 2024, we expect total company revenue, same-store unit sales, total gross margin, and earnings to increase year over year.”

Gross profit was $523.1 million, a decrease of $70.6 million, or 11.9 percent. Total gross margin was 30.2 percent of sales, a decrease of 175 basis points. The decrease in gross profit and gross margin was said to be largely driven by the decrease in average selling prices of new and used vehicles as discussed. The decrease in finance and insurance, net gross profit was partially offset by improved retention on finance and insurance products, which drove favorable adjustments to reserves in the third quarter of 2023. Good Sam Services and Plans gross profit and gross margin were favorably impacted by finalizing contract negotiations to exit an arrangement with a service partner in the quarter.

SG&A expenses were $415.3 million, a decrease of $3.8 million, or 0.9 percent, primarily as a result of efforts to reduce expenses. In the quarter, the company closed two underperforming retail stores and one distribution center, whose leases were successfully terminated. These cost reductions were partially offset by additional employee compensation and facility costs resulting from the 8.3 percent increase in store location count to 209 at September 30, 2023 from 193 at September 30, 2022.

Subsequent to September 30, 2023, the company made the decision to consolidate or close seven underperforming dealership locations in order to redeploy working capital to higher returning investments.

Floor plan interest expense was $19.8 million, an increase of $10.3 million, or 108.9 percent, and other interest expense, net was $35.2 million, an increase of $14.7 million, or 71.7 percent. These increases were primarily as a result of the rise in interest rates.

Net income was $30.9 million, a decrease of $72.1 million, or 70.0 percent, driven primarily by the pretax $71.7 million decrease in new and used vehicle gross profit, the $14.7 million increase in other interest expense, net, and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 million decrease in selling, general, and administrative expenses and lower income tax expense from net reductions of pretax income.

Diluted earnings per share of Class A common stock was 32 cents in Q3 2023 versus 97 cents in Q3 2022. Adjusted earnings per share – diluted of Class A common stock was 39 cents in Q3 versus $1.07 in Q3 2022.

Adjusted EBITDA was $95.0 million, a decrease of $78.4 million, or 45.2 percent, driven primarily by the $71.7 million decrease in new and used vehicle gross profit and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 million decrease in selling, general, and administrative expenses.

Photo courtesy Camping World