CWH - Earnings call transcript Q3 2017 | Camping World Holdings, Inc.

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Operator

Good morning and welcome to Camping World Holdings Conference Call to discuss Financial Results for the Third Quarter of 2017. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from the company.

As a remainder, this call is being recorded.

and from Tom Marcus Brent Wolfe, Operating Legal today Chief Chairman Moody, call of and Officer; President Executive Chief Officer; the management Lemonis, are and Chief Retail. On Nuttall, Roger Financial Officer, I'll turn the to over call Mr. get started. Moody to sir. ahead, go Please

Brent Moody

to Thank this thanks trends, joining. section morning release copy and these that Reform release growth on factors location a everyone may and A the XXXX diversification base, our financial as financial various views statements XXXX. Form retail and that can and the non-GAAP to calls, over Actual on SEC Marcus. financial Please also comparable is those website. third the this important website. operating the Management's which on may with may company's filed looks as is customer XX-K risk acquisitions be meaning indicated financial this the be and statements those obligation which call our by measures press in in the assess Relations statements I'll we in statements. discussed March Reconciliations directly may like the quarterly measures With you're These today a these most included Hey on company's plans be XXth, statements include quarter measures will referring mute. to of morning undertake and to available EBITDA the be to customer we adjusted regarding results filed with no to afternoon. Litigation of earnings you. today's GAAP press Report our openings on EBITDA SEC expenses, Securities Good report our release, expected that, goals, to on represent for of our materially Annual and only adjusted covering financial the was Investor XXXX Act from note turn Private session margin, and results certain Form performance. important forward-looking those update as such found business forward-looking to issued non-GAAP and related of of XX-Q differ our factors, anticipated are remarks on including in and contain we Marcus, within of on abilities, the and performance. believe investors our result that Any industry

Operator

button pick Mr. Lemonis, please handset. your your check up or mute

Marcus Lemonis

on now and everybody morning business being through Good obviously We third the I of public being for you strong our are thank one-year remained apologize mute. anniversary quarter. our for joining. in very and

business. increased revenue delivered we our margins We $X.XX to a revenue quarter third continue no for million, third $XX seen exceptional record the to and record this growth quarter. we've and fundamentals underlying EBITDA vehicles leverage of XX% the The to we the our and recreational adjusted total bottom-line increased third XX% strong continues a be higher third really net billion, in million. Demand quarter strong feel income change for to quarter to record driving performance against $XXX like increased XX% a

to We entering units, see buyers the towable shift, continue market. younger smaller a and to however,

And it longer down variety strong and remain With events, very integrating of customer driving our units we is our doing on to way across quite and the widen enough, the our remain enthusiasts. lifecycle. Not we tournaments, market, Our we a F&I active our activities. to and model they only a the and this and services wider expensive fishing partially and variety hunting, plans remain this profit cross but customers. and database have This outdoor the the activities of services this well-positioned demographic very are F&I out revenue Interestingly recurring products our good driven and a and higher penetration products outdoor believe services our camping and focused by younger frankly outdoor are lifestyle of wider soccer target across tailgating such fastest-growing smaller to does database. as with this can this business RVs increasing, of contributing their focus weekend Millennials RV other is us sell less selling is our on we trips, anything margins. comprehensive across of database and across essence segment allows rates portfolio margin price, a industry sale consumer believe margins grow RV products serve our we of a and to

remain While to impact our customer opportunity core outdoor base, current to a affords believe significant our lifestyle committed model business we our a we in broader category. very us unique growing the make

exercise and our valuation Mountain XX new our and remain In designation plans rights announced the to to we've assumed. stores, in acquisition XX remain which of be expect dealership of XXXX. and up an Contingent network into Mountain we the acquire other give enter three opening national XX and leases the of stores quarter overtons.com, to first multiples our RV Uncle platform prior new the year through World XXXX to negotiations, and acquisition and year-end. diversifying next Our We Gander and second for pipeline our locations. our lease quarters October very final will third the end Outdoors dealerships. additional during we of current Outdoor the On we optimistic plan of planned quarter, on our XX along customer stores XXX com our for will our leases disciplined the XX by Camping broad closing locations a locations is to to database. in which Gander rebranded Gander growing for anticipate open initial Xth, XX recent stores more third TheHouse.com Gander to Dan's us continue dot with with acquired which two

more there we opportunity our want I in path the turn of my the to significant base discussed, job broader diverse enthusiasts all customer and well only RV, on previously stores of array and are members to team open leverage call will now closing, third to to you boating, about over take believe to my a for that third opportunities a done our through In profitability. I excitement highlights. clear outdoor across we've products have quarter we very and and the quarter the ahead. the financial and services that is congratulate big-time the Those the expressed prepared Tom we remarks. big, lie a As believe

Tom Wolfe

and morning Thank good everyone. you, Marcus

we are strong our with results. and a quarter said, had financial third Marcus As pleased

sales Let growth to driven me highlights. the services million. segment, up Total and touch revenue and new segments insurance. revenue plans both to same-store increases $X.X to increased on revenue the and increased some X.X% to and XX.X% was XX% X billion, revenue In retail and vehicles, finance retail contributed $XX.X with in parts, service billion consumer of by up the X.X% other, key $X.X and

X.X% assistance margin revenue cross-sell expansion We we recurring continue overall number third from and a total to notable standout business units XX.X% from base net higher quarter finance insurance dealerships increases and in penetration. us vehicle and of an programs sales healthy to $XXX.X view of services. for are to the and year creates prior the that which The allows increased again this a million products customer finance revenue trend towards revenue and and insurance as of Most positive the and in and number greater RV other of continued as and our in retail younger believe roadside which was increase towable period. experienced higher biggest XX% to the the buyers

to gross primary reason The associated was SG&A expenses penetration in while products XX.X% margin basis this points increase million. majority total the $XXX.X XX.X% increased XX% gross increase a margin margin and for a and increased of points from the revenue of Operating benefited coming expenses acquisition. of finance retail increase. to $XXX.X segment service revenue million from $XX.X XX $X.X basis increased and revenue, in with gross basis SG&A per revenue, the and by Gross revenue. Mountain The points to wage to $XXX.X expenses margin acquisition. the change other costs and same-store driven million variable increased to year-to-date retail segment notable XX.X% new of payroll and associated plans Gander was of and from related XX.X% Increased was expenses part, of increased to services XX.X% increase Overton's increased sales other which with preopening XX revenue insurance million of selling primarily million consumer operated the XX in dealerships the with incremental

$X.X a includes associated Gander which XX a million points of payroll of $XXX,XXX and of profit, expenses preopening acquisition. XX.X%, percentage expenses As with decreased transaction and basis gross the impact of the Mountain costs SG&A to

EBITDA $XXX.X floor borrowing XX the borrowing the quarter adjusted Floor a plan a decreased debt new by for point the transaction to increased XX expense to primarily from and to as costs, XX%. average basis of adjusted to SG&A the primarily the in interest point average compared decrease the XX.X% the which percentage interest well gross to EBITDA last adjusted points average to XX.X% the Please million, ago million related net prior was interest and inventory, higher net increase as to increased year XX margin due $XX.X earnings million refer period margin. quarter. and plan expense Gander year, X.X% tables Other basis EBITDA to the includes basis a reconciliation from the which as $X.X million $X.X in in X.X% rate. in increased outstanding dealerships and $XX $X.X to Excluding third income in a million to year impacted was preopening release income as average EBITDA margin expense decrease profit from and of million Adjusted rates.

$X.X million September the Inventory to and acquisition cash working and respectively. two billion were capital primarily in from new $XXX.X Turning XX increased balances TheHouse.com XXXX, and and to million the December $XXX.X of Overton XXXX. dealerships the sheet, XX.X% XXst, operating XXth from stores balance

$X.X end we our have floor of of facility, and the of million floor $XX issued under loans of facility, million Subsequent revolving loans down livers X.XX% of facility, case X% million loan XX our margins of of rate $XXX Outdoors term borrowing $XXX.X As increasing million. plan floor to facility. the to annum finance September to dealership secured applicable credit million resetting plan from term the X% an quarter, senior $XXX.X our million under credit under amount issued incremental $X.X in base our Gander amended the the of payable million the had the increasing and letters our loans. credit from to We acquisitions, basis we amortization letters million quarterly outstanding credit primarily principle our third plan in annum of rate $X to notes of case $XXX.X and outstanding principal added points payment the XXXX, facility, XXth, per X.XX% inventory per under

stated, -- the second XX leases XX Mountain plan another Marcus and third on first the quarters to initial next assumed the to end year. XX of by to and XX open As XX the to XXXX Gander of XX now we stores quarter October and during XX Gander Xth Gander stores

As XXXX. other expenses will full this quarter. outlook stores. our outdoor in the would of preopening and without we turn businesses began continue $XX.X the related extensive and year, up I months Marcus nine of Gander the business to we fourth incremental revenue have to and discuss now of the to incur incurred result, expect the million $XX a call open expenses will Gander approximately the to to for of back to we Outdoors first transactions million lifestyle benefit Through ramp another the meaningful of incur remainder as and

Marcus Lemonis

acquisition but raising In and some quarter, These Thanks billion nine million for to our Mountain $X.X previous performance and strong adjusted the approximately respectively. we year, EBITDA think Gander expenses. are outlook revised months $XXX million, estimates exclude based to our preopening on around XXXX Tom. estimates and of I the any our first $XXX the we odd revenue

Operator? So, results With to please. core we'd said, that like business. can better turn our you call back operator session to evaluate start the to the the of over the Q&A

Operator

you our take question Thank Rick [Operator Nelson Instructions] Stephens. first from sir. We'll of

Rick Nelson

on the Thanks. strong, the about we're be Marcus late innings. morning. quarter. update comments continue your on innings, any a to thinking results at Good great these on where middle environment? very cycle, Congrats financing Any

Marcus Lemonis

I average a don't us or selling of plenty the near anything. we've see see outdoor our fact through on what still price to seeing don't is down our our historically that terms just bigger we're at We room believe it, that and we we're basis future and driving and any lifestyle daily as mine, their is millennials feel Based affinity because lead we and of which us driven what that had good in canary in as we're What what stores game. gives in is and reason universe we middle believe our to of we anything the seeing that's on that to like of have game What's seen the slowing end of headwind. our coal of front generation, beginning the we're one a we've the bit the a compared in down. believe of part the become the feel the I don't that us connection to in of

Rick Nelson

know levels? tight your is Thank I you. inventory sales it opportunity, inventory Maybe [Indiscernible] [Indiscernible]

Marcus Lemonis

-- that missing do I on theory some that we very Roger feel why and of and sell them. in not argue that our aversion level is we're But in $XXXXXX we very risk EBITDA play we stock margins motorhome inventory know $XXX,XXX, we revenue things and we of do. simply making end believe and Well, Could could business $XXX,XXX, our a be luxury feel the the that our business. we return levels have and on But the about profitability could I because good profit capital and some motorhomes high Sure. them? selling our we

relationship always believe in We properly that the what with time. our both that we're ensure stocked of And fifth and advantage missing we towable think with level is so our wheel to strong right Thor entry any business. our that we're River core on relationship on product business our gas. us stock Forest we're that gives we and And right the our an don't at believe

Rick Nelson

Great.

around how ask expectation Outdoors, you but quarter some any an you could Gander, next for I update and Gander your negotiations know following--? if year provided going Finally, numbers I on are the the [Indiscernible] into luck fourth

Marcus Lemonis

currently Moody we up sign have from than margin leases that company our as frankly, for to Brent not those operate basis -- forefront we expectation, like path and day negotiating really feel of believe clear more don't give at. quite profitability. wall we -- we and that's any at the said Yes, us a on EBITDA the four I will the been Profitability, with consistent leases one, we

on that historically done boxes shrink When the we've to did we've return with the is to of things XX,XXX, size and were turning on -- the elected we and that One XXX,XXX, the inventory because we margins had. pass were didn't of the elected those that of that associated the company XX,XXX, -- like boxes currently they not the after the analysis, capital.

all nice X% merchandising a us XX,XXX, was. addition of We factors, we of have getting the the see historical Brent we maybe club our give in were profitable is stores the did to but more a getting little But the I in Overton's, could the should believe solid next the market, uptick And to of to to -- credit goal right, team, XX,XXX. over of XX,XXX, for growth size other customer for is generate continue XX,XXX, customers, what put slightly by to And we which retailers right, able we did was to elected to the remind that wanting the believe getting really have them do the me lead, And memberships that segment, that we box, with low but sell have management And what trend on importantly, have will the after start into price as our probably believe be more lot reason on that business of the what to the and in to X% the those. size was as with a And for. and We sell cards. We have acquisition, do looking more database. some selling opposed and to to right our price. we earlier. I the time. leases the touch to our experience file smaller do outdoor we sales, and that that won't to XX solely service footprints; sell the database, XX,XXX, consistent we is is XX,XXX, yield so, want everybody as to stores solid let it and a the opened that experience. just that months, about we rent to singularly take reason going But opposed we're sale the Gander grow addition profitability have what done, out

it's So, XXXX about stagger year. to We're we're next don't to intelligently, we'll are them XX We are in to very to -- first layer of XX to to get the going be they think excited be in want work in specific opening. forecast year. the and the open. where but stores because quarter a I I have to profitability their open XX over going going to closer going

what XX-some One the importantly, this think that the $XXX margins, the capturing on the think not now focus; set return it in in hit. I margin that the more things in But -- do be And do Is and much revenue. call XXXX capital, there everybody knows more that it's names bet. from million of somewhere would could the is database that any we're importantly, is the focused stores than that selling our $XXX possibility of I contribution expectations customer on a can that million? north X% But them the margin revenue. maximizing the is of expectation and, products. those terms, the experience, we higher revenue business not our range. is importantly You right absolutely will most EBITDA on I on That EBITDA the be do

Rick Nelson

Great. Thanks luck. for and color the good

Marcus Lemonis

you. Thank

Operator

take next Goldman from Tamberrino our We'll question Sachs. David of

David Tamberrino

you. from business, want earlier decelerated the But where I like couple of to that Great. in well. we growth got questions follow-up your Good Thank quarter. It in seemed quarter. topline in business off was line X% recent a It year. single-digits, products questioning, your Sam as were was I from with start about mid the to the for customer active the high up revenue double-digits this offering, quarter, was of base but growth maybe think only I first kind during it secondary XX%. growing about the And consumer

So, could us quarter? maybe the were headwinds through what walk of that some business within you to the

Marcus Lemonis

were we frankly, that believe some of headwinds, quite self-imposed. Well, those

great really We one a we seven are as does benefits profitable the to Good each want job and that and analysis. which we of number not. our to consumers. the $XX more a have the files. months, add $XX, to from recently, individual more also for done of of of raised which we really Club value have into ones at And the in digging last price understand Sam continue segments are customers looked understanding Tom inside And some And of the we and segments, have

negative customers their a We of product performance they bought was on who their -- have to number that identified really us. have

-- the of at that to And our goal way like is customer. our of marketing those. want a to people decelerate roadside pricing not market. both bit profitability or we looking you profitable file, on so to do at and every as And we a profitable customer to say all, the I don't the refresh, take on our we we the of of was something elected of then out years a not assistance; And saw couple grow but if send

opinion, marketing getting about, -- know I Overton's, to don't of anything TheHouse, those is And services. concerned ramp my in ready execution think I also there's the so up about to nothing, et of Gander, products and pacing be cetera. there We're our to

profitable. us terms worries in no to XXXX. a trend to about, nice see And more the want be in But other than concerned so be I current bump -- expect of to we nothing would

David Tamberrino

lot Understood. sense. Makes a of

year. you expect or reacceleration that next acceleration of So, growth

segment Now, the me the they through that Can the like within quarter looks retail? in margins compressed P&S -- during again, on happened little bit business your you walk quarter. exactly a what

Marcus Lemonis

service? The and parts

David Tamberrino

correct. Yes,

Marcus Lemonis

traffic, As the year, World that but we use look to Camping throughout for isn't a mechanism drive as compression. the reason the we

control the We of do tight lot and are that most about margins way. a put aging. believe very, very we up And not diligent tight necessarily retailers authentic in inventory the

is it to Our choice those want discounts. liquidate rate take mistake the is and believe that that at inventory moving or deep don't we've that we to, made, we any at

margins you towards the conviction the like to compression there see not just the inventory I any so is a hiding tight call having And management, high, that by and weenie and strong what look having we inventory we our into higher-margin dead have faster-moving, warehouse. turning -- need keep first sit redeploy to our the best and the capital to loss in believe is products. just and loss We inventory that

David Tamberrino

Understood.

that the bit So quarter. little in experienced of nature during a sounds one-time

Marcus Lemonis

elected No. do always we we that and went fourth cleaner we a to inventory, that. quarter with into year, will of really we Once sure the that. changes. do will a do which make continue But we timing to The that

because where in not promotional; of it a inventory So, not pulsing being year, a that the of it's could truly compression. once little marketplace; our and us managing because is It's it online keeping may see a we're you line. bit you see just

David Tamberrino

EBITDA then Gander just $XXX X% a And in Understood. of revenue. Outdoors there obviously makes margin. I'm kind sense, the target on million stores on surprised little

than better earlier, rates were of the your that stores overall much doing your the were. sounded business. more From like it some You're prior favorable than on comments lease

that mentioned X%, negotiation per $XXX,XXX you what's is stores under from lot upside those your opportunity the under that $XXX,XXX of I the lot a for think took over, with rates? particularly reset still were and a negotiations store. So, around being you for opening

that per X% margin? us lease is going to walk the box, right through what be, and upside what you target is can So, for rate the

Marcus Lemonis

the $XXX,XXX. there me to $XXX,XXX this put numbers to I David, is in sold sell in earnings Gander. product services. still will we results financial products a known also to sold Gander, of know that average through Sam recorded services Good lease that you've Keep the year and of think out for Gander goal in or rate mind our that be as only other that are under and can And context, in not is hit. we we products now be $XXX,XXX, our the going that being

so and be to, talk coming think the able of months, what what we did, overall contributed to the And will in it acquisition to XX the we about profitability the file.

So, number. when the we we talk about Good just of services in those not X%, we're with space products inside be them, and in segment. what's ancillary is the candid south talking profitability that. pleased, the have very about happening in to associated report about what think Consistent other of with am I reported, and retailers profitability our X% four the comparison Sam because with walls, you, the that I which -- to way

could we to And a higher that think naive pricing. market than to don't be want so have we

an to experience we that Sam want have have that revenue our of to We realize don't have inside P&L. we and Good still to record

David Tamberrino

for understood. And last one just Okay, me.

XX locations stores, to be are initial stores you inventorying those those you are XX Gander Outdoors RVs RVs? to outside? XX up XX those still cross-selling and putting to will And targeting For be that

Marcus Lemonis

dealerships done us quarter, up the to leases that have the the is But lifestyle because expect us or target. work XX outdoor we our none for the we the in happen think an still we're we there, be ready that whether of of new giving with property, But store approximately them will we that's add dealership business still will do openings. So, co-located in a first of Camping them, RVs acquisitions, won't whether XX there dealership to next up out do that we what locations peril, Gander, that XX days. on World on the to wouldn't center. property XX locations, just at make will the that be really amount sign put has We the so in them add going whether to co-located open will get do XX of have

or distracting And Overton's Our primary anybody us our moderately TheHouse we're from business or is even we with doing business. our anything business. want that dealership is thinking don't Gander core

David Tamberrino

Understood. you much, Marcus. very Thank

Operator

Thank you. Seth next Credit from Sigman We'll our take of Suisse. question

Seth Sigman

lot just and around good to follow actually, on last wanted Thanks up growth. store I point, a morning. that

the there we've lot So, this opened looks rate year way take more to on seen XXXX? XX% past, high above baseline That's up years. the that you I mid growth of have really have in tried a a view about opportunistic. parameters is prior growth is it well that sort single-digit stores. think would of store Obviously like year-to-date, any to that but the around conservative for know in a to you be helpful. But

Marcus Lemonis

acquire as which always I seven as make to absorb my I'm a same and our many XX stores but is want open do is Yes. year, you, to capital give absorb. I hate as roadshow, human but to it I this our goal or infrastructure going to mean to initial to the answer that gave acquisitions can we the can on

we us the them RV on be are things we because super into sellers, industry acquisitions make me There for overpaying them in that There Let not thing. to entry want our makes we look that obviously we're seamless. is to integrate but sure that of barrier space. way no plenty obviously in we capital. to about at making our clear one company can return make a And want sure to

barrier XX I'm outpace thing the to the always no going is to said as same discussion, like with do which based XX. But last this I we is to months, will deals, stick to to look seven on I've there historically, We you think for But and entry. expectations. can see,

Seth Sigman

to of right? some that on points be no Gander, Okay. you last mean to Yes, given believe constrained efforts Camping the follow-up for with those World, growth made. understood. one reason And would I just there's of

Marcus Lemonis

all. It's at not -- the that yes. almost none, Absolutely like no. Zero, saying not;

Seth Sigman

from I Got think the much key okay. actually driver quantify demographics other it, this a younger those us here. that talk maybe And then coming way business? lot are there parts higher being base? guess about of importantly, through growth of you of of potentially. to Is how And the attach walk consumer this and more for what a the some just then on implications alluded Can you I to benefits? the even rates, is

Marcus Lemonis

drops, on based to a out that about we buyer driven to average this know F&I as to with being and And we of do to them them including drop how typically research. we've the younger you're and increases, selling I'm need, services, younger that a net. better money wider making their dealing correlation as younger payment-conscious the payment and selling some not is the translated. And dramatically we consumer, selling a things the they products price, think is a cast And audience, call, as financing your and price increased the price, that in But well. when of in and the results net specifics We'll there's you're sure give payment-conscious average on back you and risk-adverse. with product go turning audience. price casting be likelihood think a there more down consumer. for your what them more and a And selling the direct monthly wider we've payment-conscious dealing to valuable correlation able, selling lower a likelihood direct there's

Seth Sigman

got Thank you. it. Okay,

Operator

next Conder question from Securities. Fargo Thank you. Tim We'll Wells of our take

Tim Conder

maybe whoever Tom, to a couple this. would want questions; you. Thank of take Marcus, or just

some on take pieces on there all, remaining whoever puzzle -- to you've give that go for and you are be again, that to First together costs that will additional outdoor this. those as costs? side that? the out any we incurred the put XXXX. be quantification called there or Tom, you believe, through the related openings, Any indicated Tom, of And store to wants Marcus then, you do Marcus, can

Marcus Lemonis

were The the from always want I'll to take I'll best you want answer puzzle outdoor what an growth and other at pieces let on ones our There else same the online give that give we profitable one clearly looking thought our of at at second. and first mean as continue Dan's, that opening we our stores. whether Tom database. anything The yes. we have the is take brands and going us most TheHouse, the diversify now, presence. initially presence. And be yield left. do can the categories to I we're to will result, Overton's, we looking then in look that come acquisitions, outdoor that the the but businesses us it's to that the But are the markets are Uncle could of is online

those to we want integrated ever to And where would number question. there's predisposition we bring a vertically it. stores. whether highest want don't so and things inside I'm it's we our look new we businesses. at the But to from And as continue have two, is which space we'll a to or be well. product digitally, to somebody start marine but those nice our online, going a or penetration If round we continue the I'm to look obviously tuck-in that to being walk going a a -- they think to fishing, that goal is of Number to that buyers. in to Tom business, boating, for second out to the complement, is that's one. and continue acquire nice in finish let want Overton's know will away do

all today right coming is took on The have real is bulk that networks on of training the the starting in I staff on But that rollout. IT from the with costs merchandising understand everybody significant to up. out bring the is very we're a rents office the focused we to we and is are Minneapolis working from. that and start early Gander want that way. websites, on I've Lebanon people to and only the associated coming moved believe incurring that thing bulk of we where center small this to and necessary distribution we're we Today who the that are fill the We in elected believe that that to

bulk Now, to experts, for until the I the decided end next a in $XX as them, of we in think that million regard. But are business but we be And really money was in really the team. of $XX employ up year to there feel A the I we this about will The collected and if open. ramping merchants, significant. inventory are we million million another me believe $XX year, nothing bulk it, bring that like spending that of leases up the of cost and I to on the really return that analysts, the don't bring employ people, locations, couple ready we absorbed, leases and material have start

me Let something. that with balance

have in more to there cutting We talent We on collapse our areas. continuing and and going positions overall are is to SG&A been upgrade to there believe in opportunity business. certain work

be long-term, that the as haven't at the was that And and make that out thing there store line of acquisitions really executive best like unbelievable a We Overton's, cut seen to moves, this level. frankly talent some TheHouse, talent; in these think won't so, way as unfortunately, front make at of we will level mostly opposed got we some those the we talent people Gander, the before. quite the

So, may talent staff previous supervising the cases, cases. in or that staff, in some be replacing previous the some

the So, don't opposed relates want I it. are to through the about some there's you costs. it to doing anything Tom, to time, it right We we alarmed first be shed believe it? color way band-aiding the as way as to our think on

Tom Wolfe

the staff that area, quarter and those management and expenses you, ramping preopening forth what regards for office mentioned, pushing primary to the and payroll up, costs be lease hi, well normalize to And as the by for components rightsizing Tim. of will the Thank and expenses in so and be fourth In back the will No. Marcus, we warehouse as XXXX. the the merchandising expense. the Marcus

Tim Conder

quantification about in just those? normalize Okay. off think And we just kind should Tom, any would the maybe throughout general, how of they how year? and fall then And

Tom Wolfe

next we'll expenses detail time. at we'll first be and the XXXX those months providing within And of year. and express that two the guidance Yes,

Tim Conder

clarification. just then, Marcus, And a Okay.

like then and would additional enhancing sounds here puzzle it locations physical versus e-commerce pieces that and just future So, ability, be fair? heavily skewed is further towards online

Marcus Lemonis

mean there anticipate be or any I would where some that future. I not acquisition small brand in are be acquisitions we would Gander-like we I expertise Yes, up small. some could a But picking think believe near

very strategic if acquisition mean But we on right accretive that to that that that online be that. say to the wouldn't at now, never we're Now, doesn't Gander; focused to the it able look shareholders is we're capital accretive would I'd make never, financially But business. to the base. a but have truly and to

Tim Conder

gentlemen. you, Thank

Operator

Ryan We'll Brinkman next to you. J.P. Thank with Morgan. go

Samik Chatterjee

This on Brinkman. good Samik Hi, morning. is for Ryan

more with that question database The get wanted if the you've database is peak to of has to first had already chance I had at existing World. closely, the just that customer a relative to you sort Gander have an update Camping look

trying how about to of new had wallet much of that get the a Just sense World already. to with share getting is access opportunity same Camping customers the vis-à-vis customer with of Gander increasing

Marcus Lemonis

these what that to the I were Camping the at new we is to making customers. business. to really crossover the Gander, and good to of there way one not improving and were on little XXXX maybe And existing how with working back sure is think some the making stay two find balance And our we bring missed but customers ability the that on at focused candidly between We shocked we to acquisitions we only be you. have honest part World to Camping and in marketed of between think the is that plentiful. business before World opportunity we historical have bring them mining We We was shocked already think markets. things find

if database buy products grow. pole, as that great Good the lack growth. we think be the the We We Gander some will Sam so of credit our a grow card then will And of nice fishing think the Club delta and business. we think Overton's So, we with But business; and more want between the there's a particularly all chair will don't the a roadside time, to pleased quickly our will We warranty opportunity the nice you product others. and couldn't We we overlap think think think growth. of for business obviously, see products. or see grow that database. over as

Samik Chatterjee

follow-up, just Forest mentioned to Got in and it. River you Marcus, prepared And your remarks. Thor

us that can And further? opportunity were see relationship new remind if sort your you of Just relationship you up stands RV sales do an to you Winnebago? on your with where ramp

Marcus Lemonis

investments most importantly, what Design. the The into contribution it's we grow, price not capital really amount great have cases, motorhome motorhome that motorized motorhome the I in to But RV our a and want Grand business down, great has we times our down, a XX we relationship and one. job Winnebago dealership riskier. driving get with an sense means is of It's makes transactions. not to grow but prices done do to that instead side some our all team those average we that to that he with But same XX We the and opposed company understood amazing to to slightly as towable minimizing driving has We a And see services Winnebago. on company. we their And just for And well. choose into our and one. business travel increasing role of something invested, sell customers which margins just business because $XXX,XXX XX presence as EBITDA relationship margin see products on think exclusively selling really and out get the as do may overall their average obviously trailers. of temper selling with presence, our our how and as need is exact Roger

Samik Chatterjee

questions. Thank Thanks our Got for taking it. it, you. got

Operator

question next you. Thank take We'll Alice Wycklendt from with our Baird.

Alice Wycklendt

quarter for taking Congrats a my on gentlemen. hi great question. thanks Yes, and

World new lifestyle, first, first with and in the hopefully experience RV, increase with Just lot then years entrants their to younger down that favorable they'll Camping the a few about have new doing those stay buyers demographics in the to some ensure you've market talked line? the a likelihood the the return the to What is and a market. success

Marcus Lemonis

investment invest auto Unfortunately, used XX-hour manufacturer you first-time have. or support answer put would find have we gave first buyers your than And I time to that that. to hopefully for tend our do -- at have side. something. what technicians. that to presentation it but industry even how Green I ever think significant a are think And buyers, technical we number the definitely office, through biggest have the have know most Bowling excellent have all I made get and an school we oning historically an it's what call, way. has have on And better it its customers, question, we to It's into the service use support. a I same The it walk this; challenges. question that's the better. to we the In pace whether And kind successful. we one to time believe operation. launched similar or the the this training XX keeps look level on we burden X-XXX vocational -- today. had the and available we forefront. a falls the But about side on And months made provide manufacturers they first-time But kind brings all the of in in the of our think for sales [ph] for of and the know so RV an what? making don't has parts the to this the the on XX sales we'll XX, And out to technical RV giving You be also them quarter, issue challenge sure support, next because that decision, is generates more service with they to would It's continue industry us. that I recent my need that's ago, a we don't It's

Alice Wycklendt

the few quarters. you in that's time helpful. Great, in vehicle first for a then And used growth reported

the from that of the then part dynamics terms today? market about pricing stores. or in lapping is you the changes exit in the benefit think of there? business used supply I can of talk the new and Any auto But

Marcus Lemonis

started higher red-hot, is of market the slightly a We supply. is big market The very to market we have percentage seen see terms difference of trading. -- not people But reselling and still is what hot. in have a the used

so like And now. of would is it changed years people our think be say that bit. to out. lapping that exceptional numbers. team Part did three, candid I process great used. little I'll an that bought with ago But pointed it are five has four, their a in you: that's starting our upgrade job we you But theory

at We've they them where little company. products for to we think up that's a we're is bit all something, create that probably are a is roadside just think them probably We become and and and and industry want sell buy our And not something sell services swapping call and experience, new thing it's really the to worked get than to looked send I the one why to gotten at, more driven and is customer their we've the it. done walks to closed that transactions what's worry hard the them we've is, As job our they selling -- a down us, the warranty better door, about said drive lead, them, in we and us to down, and is the of whatever however get just price price happened just And buy. between because new sales best we've used. average think the which transactions. to it we've sticky gap I them average

Alice Wycklendt

taking for my Thanks Great. questions.

Operator

conference like Marcus At to this the over any closing you. time, for turn Lemonis remarks. to back I'd Thank

Marcus Lemonis

is We be headwind. our about no very very, business we see and where to continue bullish

on to focus SG&A margins. continue and We

how continue will big acquisitions And a be that we've with it. out historically could the surprise think all to Gander/Overton's turn we real make done to We consistent us. of for business

fourth-quarter when we're you so those results. And so we'll open. our excited see much. And get to we you report Thank

Operator

your does Thank participation. you conclude today's for That conference.

disconnect. You now may

Camping World (CWH) 9 Nov 172017 Q3 Earnings call transcript