CWH - Earnings call transcript Q2 2018 | Camping World Holdings, Inc.

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Operator

Good afternoon and welcome to the Camping World Holdings Conference call to discuss financial results for the second quarter of 2018. 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 reminder, 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 Camping On World. Nuttall, Roger Financial Officer; to turn over I will call Mr. now the get to started. Moody Please ahead, go sir.

Brent Moody

EBITDA, opportunities, Relations adjusted the press obligation in noted. issued certain in Thank quarter of in financial of the and second this customer release our customer and of income as against them. factors, meaning call, XXXX. as important our borrowings good quarter to These non-GAAP only assess covering update performance. openings, in views XXXX include of be of the a measures may A on Litigation release forma GAAP reports and including diversification XXXX Securities we the and and are XXXX are the growth base acquisitions found quarter of SEC. statements industry to increases will that section copy press otherwise everyone. directly and Reform financial result and second second as indicated website. by on included XX-K the share, may Investor will our operating of contain financial and be abilities to regarding statements on Form that adjusted can company's statements Marcus. afternoon note on today, comparable retail section Risk discussed the be important our earnings call you call our performance. no trends, financial now this represent Act our Private release on over various these anticipated the these today's forward-looking undertake a of Management's Any afternoon Reconciliations in business company's differ I the results was may those within increase market goals, turn Factors expenses, website. results referring the and statements net location those remarks materially remarks and from our may results comparisons our Please related and such our unless file Actual measures financial which to investors forward-looking we All we with and measures results also to pro in to most believe made the non-GAAP plans,

Marcus Lemonis

morning, Thank you good and everyone.

and are had high. solid time company $X.XX business equally Our growth industry and XX% in revenue our for RV very increase good. prospects a The billion, all our the total an was second quarter of an company

our This offerings, in expansion grow grow acquisitions, business the Our recently into rapidly network, will increase the us RV and Outdoors national share. product of and our dramatically for sales Club RV acquired our allow service near is and file, the Good business. poised Sam our growth the long differentiated additional footprint, market RV to of RV customer our expand dealership integration through dealership RV growth term

another for pace record on is year. business RV Our

but same-store up increase towable in strong units used is important In X.X%. even sales trailer quarter all fact, in a record and an $X our high RVs the second that over XX.X% were in time the of What’s more X.X% notably nice only billion did XX,XXX we increase. travel a sold. RVs sold XX,XXX new Not was total, new units a

goal million market strong alone. that in and we XXX activity level RV levels. of the really as Roger sales unseasonal while reducing selling RV Consistent RV early plan the nice achieved more of balancing the our inventory our to season stated wheels profitability a our we of dramatically While lower targets of RV excellent job business driving team progressed. with price saw mid-priced quarter and part fifth towables, weather, and part selling his growth the impacted motor inventory with entry improvements We did was promotional the priced the maintain funnel, by lowering and of average homes. widest a to quarter continue than of low lower priced on reduction focus an

same-store As homes quarters, dollar, high churn revenue. we about and resulted on decline the show subsequent in low strategic de-emphasis and in a talked margin, motor on IPO again road low modest our deliberate in

by increase and up However, indicated an sales strategy inventory Ultimately unit of and to and F&I stronger insurance XX.X%. turns. also our finance positive strategy profit resulted this revenue gross in a in improvement has million record a performance in led $XXX.X

the record X.XX the a year from size increase since file highest most to assets, of Sam important Good million the X.X% grew a an company’s On the ago. inception members, Club

today, a RV and the we taken the it we making where XX has have in at our the people RV double of of locations end to dealership note, XXX quarter believe over added locations As the five we the with side XX,XXX us next members to stands over business quarter into investments in dealership the us number Look the alone. our second build infrastructure and are it positioned years. years

we’ve RV like platform dealership We RV to done. invest will aggressive acquisitions efficiently our through growth in the continue always dealership of opportunistic

accounted XX% Survey XX Michigan, the over the nine Illinois, registrations for Ohio, Gander to last Inc. Minnesota, states addition RV New the Gander RV Gander the all of Carolina, in our of Texas, represent New our strategic and like provided has expand Wisconsin, months. York, way RV in to top XX existing rapidly of Pennsylvania, business dealerships Sales which North RV nearly The launch the key and store locations. states openings of by Sales according and Statistical opportunity

than return feel be very the RV will and ramped of higher stores pacing mature. fully dealerships investment to we and our when openings the in this our year Although anticipated dealership investment the on and confident are integrations, due store

RV dealership expand RV way business dealership building RV new would dealerships make costs acquisitions, stores to continue high or compared capital opportunistic as and require to we for this the acquire efficient of attractive very fact, additional of a while upgrades to subsequently building think expansions. with payment our In facility to new goodwill cost the and is we and will land investments premiums

the With installed the that capacity increase of in and the owners service overall best industry have sure of continued technicians the human the in we investments facility the RV industry. make meaningful and RV base increase we growth making our nationwide, and trained to are to

part For maintenance and a the business. our RV $XXX.X in an quarter million repair, had revenue, clearly record we important of service, parts

technicians regional made service centers to looking up increase our at process We development markets. and we’re prospecting was are we million, the over our growth to opening technical the of in an businesses investments service effort the customer school high, while capacity an and funnel to centric in in for into outdoor have acquisitions our web-based to widen all-time service lifestyle we RV $XX to second the base. train that E-commerce of expect the quarter was the quarters revenue significant come. In

and file distribution the in to to platform a the of dedicated thereby allow Amazon seller a allowed and our World’s This the Tom are in XX the assortment direct business. e-commerce allow over product us work Good of one preferred accessories investments In I’ll remarks, offering outdoor work Those retailer and size day, to million allow anywhere in active will this buyer by completion XXX that We company they proud year. our work time anywhere. improve are allows members now RV to channels. capabilities take X.X to to and to ago, U.S. of of financial to across and are closing approximately results in offerings team’s our of will to parts and to of and thank all additional exciting is our our year the years products full is would Sam’s in end become scalability our grow door us of brands currently my believe all to ship us locations all of prepared and at a this This detail. owners I offering streamline over dramatically will and doing. nationwide. their we we on opening turn single and and very support offer web Gander product hard to through comprehensive to strategy. addition the making to becoming inventory dedication. for as It team starting effort growth all an access the RV which our associates most our of want process, own We for strategy compared locations Camping it both we this believe over full the in RV which million million consolidate and plan I’m to the move a our installed base to enhance and service this is technology more two be you our In distribution continued X.X our Later and now company service

Thomas Wolfe

afternoon business. pleased of a had the financial quarter everyone. good and with Marcus, our We second Thanks are solid and results

increase basis XX.X% $XX.X billion Plans and and margin Retail a and billion. total segment Let segment XX.X% the Both XX.X% businesses. outdoor expenses and and and to SG&A due to to the points to XX unit to $XX.X expenses a million million selling down acquired million. $XXX.X in of increased on months. Total million. the the was along to margin related RV in the expenses me to in and by points $XX.X highlights. contributed and EBITDA sales higher million, interest a opened rate sales borrowings. to X.X% revenue interest up primarily included locations basis million to XX pro of net increased up increase in increased increased segment $X.XX to the segments touch service, borrowing average finance $XXX.X locations Outdoors expense plan increase the from and associated on plan $XX.X XX were basis income XX.X% with a some to Consumer income, key same-store decreased dealership the up Gander Retail with increased XXX revenue net SG&A Greenfield XXX and Other refer over Outdoors. last million total in adjusted XX.X% Gander average X.X% Services revenue primarily services Net net and and increased XX% expense the basis income with revenue to primarily other Consumer sports expenses parts, release expenses with were in tables points insurance opening XX million inventory forma adjusted million the of Plans increased in floor preopening to reconciliation the in XX.X%. locations and increase parts, $XX.X in gross and Retail adjusted up on new $XX.X $X.XX a quarter. increase XX.X% from Included Floor new and margin XX.X% Operating gross $XX.X included the variable highlights EBITDA. The from Consolidated XX.X% of basis. the and adjusted units income, other $XXX.X gross respectively earnings Please increased In of active Services $XX,XXX wage-related revenue. and pro to million basis in driven points for forma other retail

floor credit are our line facility. decreased Marcus. vehicles decreased XX remarks we plan on quarter was Those our now XX% At revolving Turning senior $X.XX of balance were term from million XXXX back it will facility levels, from $X.XX at new active new turn XX.X% to related June in and outdoor Inventory $XXX.X of $XXX.X on plan balances to had the and increased prepared billion loans to and second floor my million and notes under our and on a stores acquired Total XX, $XX.X facilities, and Inventory floor respectively. payable capital quarter year-end end. basis cash million inventory December primarily $XXX.X per total working June versus borrowings businesses million the outstanding plan sports XX, the the billion in I million opened. X% financial levels. credit sheet, results $XXX.X dealership under to under over or

Marcus Lemonis

into growth we want our of of dealership continue Tom. Gander and reiterate assets. acquisitions, the strength excited strong and that be business our new whether strength Thanks I RV store industry, RV about openings the but or and through existing to business only the to the not of company, RV integration results are our

Our come quarter. as off record the revenue we remained strong

market. We the are RV on guidance of raising $X.X billion $X.XX to and business continued revenue our to our RV billion based strength the

outdoor $XXX acquired with revising business. is rather RV the we'd including not integration our range are EBITDA we mentioned opportunities our in in RV as businesses, attractive return associated a investment of to in our like the that consolidated over significant million This As increased business, adjusted increased range. our our above, expenses invested Q&A. of of the result the result million With profitability this expansion, the have start XXXX of any to the to on newly to accelerated the call the positioned to we expansion and reflective $XXX of back lowered said, company outlook change for expansion the capital that investments the increased operator And turn growth. but

Operator

Kennison Please question Thank you. first [Operator ahead. of our we’ll from Craig take Instructions] And Baird. go

Unidentified Analyst

industry anything noise and lot Alice there the to is the what the retail on Craig. saw Yes, in we starting gentlemen. in summer, I for of there a good can you in just afternoon relative in August through sales trends guess July share off QX? is been has about This

Marcus Lemonis

of No, in the third at months, same saw any we so seeing we're all. second continue that seeing into quarter drop not the quarter sort strength we're the

Unidentified Analyst

then we your relative at in do if of the but the look industry suggests same-store and I typical of and underperformed adjustments the imperfect have you the performance industry growth consider kind the think rest your we're for QX data in market? some sales driving may to are what of quarter, metrics, you the factors Great comparing know the

Marcus Lemonis

the the actually We half on home is Survey half outperformed but came business a initiative about of slowly our our and company's our side, ago. we numbers that which the underperformed We towable side towable core Stat a to a information travel business the the prior at hour trailer on strategic Stat actually on outperformed about call. part, the we same-store part sales actually is our and for information hour the Survey data motor out outperformed looked which

Unidentified Analyst

seems of it reduce success take will it then are perhaps of and to like you you've a lot already dealer helpful done year, the a you or lot through long far that's Great, inventory, you work for where to so there? get to want how

Marcus Lemonis

advantage was at it we that wanted at our As the be the quarter of we to second of end first buys get to back stated about has call, of third and the goal week in that well positioned healthy replenishment year very a of very to is inventory take a onto our June. to normalized cycle where the believe be to back the model. opportunistic us half We and

Unidentified Analyst

Great, thanks. That’s me. all from

Operator

from Please David We’ll take question ahead. Sachs. our Tamberrino with go next Goldman

David Tamberrino

Hi good I that Marcus, think just one can guidance but your missed range, remarks the have you updated say you EBITDA time? afternoon. I might in prepared it more

Marcus Lemonis

like just would me you to David the repeat So paragraph?

David Tamberrino

and in how I’m a figure couldn’t out I it? downward you Well, what hear said made trying revision you presentation much drove to of the

Marcus Lemonis

a so investments to result our to rapid really are not associated is as rather increase our goodwill fast RV lower but trying our but reflective P&L profitability to our the through dramatically the of of that expansion we're down range change expenses XXX to expand footprint, and so significant through of Yes, in business, those the guidance any XXX up. we’re running revenue adjusting with oppose our running as adjusting to increase and

David Tamberrino

$XX there's strategy $XX million, with acceleration essentially an the of so update? your Okay, million of incremental costs

Marcus Lemonis

modeled strategy form on either this in dealerships, now. the to the fungible, look we've motivated as on starting dealerships, double with paying It building of maturity and the premium right our process our P&L. historical is it return the dealerships out the associated actually want us particular costs securing investment when really out of buy the We a land out it. instance, of the at at for or has and the at for look capital or any to this right? In either historical size capital that we exceeding cash you when company which return and through we're is supercharge Yes we've look we footprint the goes analysis goes premium when with made, the to

David Tamberrino

pickup you used buyer any new the vehicles walking there new for still a used if contemplating the supply or demand are Okay, a that supply on healthy market somewhat and unit used understood. and so incremental that's seeing perspective, then onto lot coming is the any of that, versus versus from new pretty And that in is out new constrained? still

Marcus Lemonis

I’ll let Roger that. answer

Roger Nuttall

Hey David, thank you.

be I what year the that to think performing done rely purchasing that. on has in what to that trades last lot is We is auctions. principally similar build we're our very rely used is on don't we of at do able We a consignments. inventory seeing to it

Our used is in seeing also but a the to and even strong good time also that in up, that stores this are market that particularly sales. in new used that, point I at supply the up better would little our market going new without of detrimental be what have believing our inventory see is that was it we more to is used we inventory. entry inventory used market inventory welcome we're level though actually and a very

David Tamberrino

that know and to yours and other because the has do Understood too third season? maybe interesting selling then not peak Pops and on but much now dealer of party is smaller point out this bait just there, the new think essentially get lastly, that's out necessarily time be by the still out you you you inventory lots, Mom RV corrected for industry it expect we an

Marcus Lemonis

an seeing we're with can't at you in great the other looking tell what have we're normalized inventory in acquisitions but marketplace, make our in but shape, that handfuls that we're the that inventories Look that that of what is dealers. I what’s from tell. can inventory is right can sized happening really speak maybe, looking hearing handful, exception we're today, and to I two there from levels to acquisitions to know we is I in what

David Tamberrino

you. insight. I appreciate the Thank

Operator

Nelson Stephens. next Go we'll Rick And with from ahead. hear

Richard Nelson

Good business? Thanks. as performance separate in guidance Gander EBITDA afternoon. RV the Is the Outdoors as the between possible it well your the quarter to and and

Marcus Lemonis

give you some indication quarter. Tom I’ll, the Sure, on

Just way assets they to the be before our of additional and integrating as particular are will clear and we the these plans physical be those about locations you company we we all over those. if think selling through numbers, give

retailer next point Mountain single it our the And than it when so box is see recognize our in while actually Outdoors, more big historical that is a that will Kenosha single that historically some really it selling you Gander Gander was company asset businesses. you every of has, week even

Our RV business in may in Tom but more address that, very expectations about feel be to and is we able line with good it detail.

Thomas Wolfe

you can provided. that business, or guidance flat legacy, essentially to Yes, the essentially our what I tell is is we the RV

there shortfall on. the the up we’re investment and So outdoor outdoor business, is business the making ramp the of the

Richard Nelson

Thanks that. for

the on it burn you’ll year think you’re how So investment multiyear next you year fact that get cash this program? was EBITDA that same much the back in making of or

Marcus Lemonis

and whatever when that losses want revenue expenditures months right ramp the those leases it somewhere to in happens associated we locations additional don't forecast we purchase $X.X locations the of at exist be will with that what multiple built which the tell a will have up get investment the the and with into these includes in key to over I the states. moving of and fully several you million show which them, under When include EBITDA. the it locations that large to mature this look investment last these are part, rapid price we XXXX, of of We to operating capital original expansion is us billion but $XXX associated sort models that IP these believe the

I a analysis things that do the mentioned losses that operating purchase XX% on price, return. it's can't you get we If items cash CapEx, back

anything If everything mostly of include XX% return you if on the and the us the only mean return quite key north really even inventory capital but to successfully doesn't going on for capital in be otherwise you like that that able include then not exceeds it's been but XX% not to have done. puts deployed would frankly though for we acquisitions we've us deployed this and fungible, historically we return it we're capital That enter. states not we make like inventory

Richard Nelson

lot a thanks enough, and luck. good Fair

Operator

from ahead. question we’ll And Sigman Suisse. Go our with take Seth next Crédit

Seth Sigman

the year us you now, Rick's that's year into to faced think right Gander how the front to on bad A the taking of as about next realize quarter, you're strategy, but about the the in end throughout going should question, followed it fair going the for guess update I follow that and thinking on it being so second then you you're investments Thanks the really and a bear second it progress here question. you investments guide go And be of execution for to quarter? this think first guess you to that I not XXXX? is and can issues couple I trended about the loaded to question ups first you. the less as so brunt more Thank just

Marcus Lemonis

return it going XX to we answer believe that bulk much internally loaded case the the up of In we're have returns. over get thresholds a noticed clearly second takes money been stores, we've for so level standpoint we heavily that our where investment and in towards we analysis, that where very good have front trend to us. and that XX months opened spent that about capital and meeting to Yes, this XX have first. years, feel has the forward is set question I'm the to shareholders last we these looking we and reversing the like from The particular

believe consumer recognizing they in we we In open. is healthy experience and show when terms the our stores is solid. up of are stores where The now that XX are,

the is market out we business the very a the August inventory is repurchasing of the all We use. sure waited or fluid have position put as are open. We've inventory that that We now. that the until we're received kinks making inventory the and to where now now month we're best now starting to distribution the The center we got of we’re in in all way.

say are to lifting to. used the crank heavy about heavy of into up would revenue excited the to we're is I and now this over So type we get lifting that the open

Seth Sigman

the guess are just to dealerships in, then have strategy, spoke going many dealerships I $X.X help have the Gander you you're I how followup us to full stores a billion think And to to would you helpful? Thanks. the be that question that on and if could bridge going that blown

Marcus Lemonis

XX are co-branded today and RVs, they the there be locations So even if building. they don't World will Camping on sell with

you if we look that Gander is came that's number So Illinois our took the really and more two, members we and consolidation, and the one. World Outdoors together. we asking did to from essentially went outlets, them put businesses Outdoors what RV Number Camping Peoria, so forecasts and Gander its at both we from when for

which or Gander does And total, locations $X.X and generated the includes have dealership that applications so, they $XXX of the all not accessory Sam there, operations we when dealership sell on cards dealership business. warranties of have memberships, products never the our it take and rate associated them. included whether the of and in the we and with is billion and and of include What profitability operations we talk a the from that the from and from service operations F&I Good revenue credit sale in all inside Camping store EBITDA about million a revenue of World the

on not for giving new but to thousands obviously of Sam are hundreds return numbers does Good customers us to drives. a a expect that of gave We wider them that fully from entire of for business. be combined, members box our year, purely loaded that include you all and But the I funnel that capital of

Seth Sigman

That’s you very that? when us a timeframe did helpful and give then could achieve

Marcus Lemonis

inside to to ramped in A historically started get believe takes couple we to my opened months it window. that what of or already. to fully mature. and that dealerships Look, tick. In months that probably and consider opinion, clock will nine We XX opinion, our eight us of XX have has

and is that. most For ones is months on. of those week see early know into you you'll are results invested. who XX model shocking to has is, of that capital XX difference out the attend we have But of that we’ll one Kenosha able first to already the next the bulk The it that our to talk be deep the if about and come we in historical been not

So than lifting dealerships as a desks in anything has not open, heavy put the the to capital do number. some a these minimus and heavy to in but lifting most amount to is this more for expect for of the we de the part add go compliance, sign that or of expense in

Seth Sigman

Thank you.

Operator

take We’ll KeyBanc with Brett Capital Andress ahead. go from question next our Please Markets.

Brett Andress

kind your show out form half the margin it how that figure back on If trying P&L? guidance investments year? $XX to these in increased the to line this up does in going flow how segment. PS&A go or itself is Hey, inefficiencies the going the to just of unpack good of I'm of manifests SG&A we mean in gross EBITDA could maybe in up show a back through and to the afternoon. all Are I maybe that million revision little that more, bit

Marcus Lemonis

business, nothing core any compression any both our have and revenue RV our parts go. we're Sam to business, margin we that our So business, our our have continue service expecting to of in business business, significance Good that

these the which for associated the most of may occupancy, RV bulk think and it ramp of Tom up of expansion dealerships. the locations, marketing costs with I include the part it, clarify are personnel, and

the in the So short is I SG&A through not [indiscernible] guess line answer

Thomas Wolfe

That's correct.

Brett Andress

Got it.

profile to in through Okay you your and do sell versus, retail what is Gander when margin traditional then segment? a going forward that Camping does the when gross World? show going you RV sell up And Gander like through unit when an also a you look

Marcus Lemonis

from and really a a full consumers and shareholders question. you So Outdoors no is the parts go RVs. the the fledged look our to a want dealership, separate accessories Gander differently great our location. to community than at they and business sale of when entity a legal look at that's actually on We World investment Camping Today

very both has is we while There manage bifurcated, are concept. and the of the it that of the associated and in that entity how service repair our that a it different they location important, on It's we and understands of with no a additional goes the go RV, of legal labor. retail is a is portion in thought location any the holistically, everybody have that and any products fits we of of you of occupancy this and revenue from and Now that we finance these the roads exact important services report which Gander supervision with overhead, locations the then of and into compensation when maintenance location the to same subset costs, it any call when today RV warranties about we freedom allocated is and Outdoors segment not was talk the products sale that RV the associated the dealership business. that RV, it our there

consolidated We when the expenses the not any wide P&L. a it our of the gross to we consolidate open everybody the business, that margin revenue eyes the have revenue, we allocated dealership see can consolidate so to it provide will profit,

Brett Andress

thank Understood, you.

Operator

Woolf moving with next And Seth we’ll question go ahead. Please our Northcoast on take from Research.

Seth Woolf

of call April months with first the through far you first on the than you for first Thanks my everybody. just continued week saw that the of Marcus had when think performance end weaker the guess, quarter you questions. obviously wanted I off was has the were because it at start that to I anticipated. well Hi said August, thus taking I sales

rate the the looked with context and now? would if I any what at back be helpful think you end that could may as XQ be maybe it run of were provide running like to

Marcus Lemonis

up out RV we were at see overall long flow and positive want that other true everybody whatever to any go competition. we are beat trend on something think to that fourth the and inventory issue trends margins. managing our the maintain we is But game. as for not to profitability in very not same were and don't we sure or promotional down activity, sake, because We this model I I managing we're results in sell share price, as revenue have to not made maximize two we have going same of any for for bottom we where at that third want for out on door got tell have to will can buy in that was our April very want rebound they the saw it and following want that is when is quarter analysts a guidance cash our with up in good coming months the in basis. will we're in both that's that quarter Northeast and managing that to the in of for able you obviously the don't we in see up provide our positive that we're because in second not in we that you business, But or somebody month. saw to race We margins consistent by somebody you and the business not, Midwest It as a primary obviously you tell what and if but they nicely of the August we $XXXX the rough trend we're we specific that our we're quarterly undercutting can the as to as it's clarity walks a we loss store in units units, you want quarter I can our we But that be and transactions generating what make market the time. April. is many can the front can. were April where the We feel July and is fearful model. a seeing be if make deep to weather because

Seth Woolf

it's business, function margins you that decide the we targets the margins been the to comments how a Okay, it of change I were Tom, clear related in of you sticking about inventory how is the guess down Gander But you I no little Marcus that then fair a think to second RV moving as there's lot perfect - been Gander a been and it's that to way a the interrupt and half times bit with originally for or you at the very made with has guys, which that ultimately year? working to guess, to a back margin should operate so decline want was of those maybe the business. planning and

Marcus Lemonis

sorry margins talking down. the about I’m we Seth, when are going

Seth Woolf

got new margin more used margin you was sequentially saying if of because performance is were, in asking the pressure gross worse, and I'm sequentially? looks because it like I

Marcus Lemonis

but end are end profit amount the the there look front Well, minor holistically. said that end our the combined take I We was historically, day, gross the of transaction pressure, know compensated the as at the we've on teams at back and we of on And performance back because a the in for is end and in very the services. have In some we end healthy have our front because a very other we sell cases scarcity we products healthy cases their a itself. product value transaction. of and there

as his as when so transaction any about minimis. about the up down whole Roger de on a we our think or look as that, thinks adjustment and margins is we managing And at team

fire felt We balanced drop what $XXX very we margins quarter seen we consistent like to second be which like promotional in threaded because we to by inventory about we’ve of feel and with expect We very for without our everything. needle the were felt the have the year well. million activity we selling balance good that able you the just our

Seth Woolf

progress. was in last and one then guess I that I about guys fact excellent. if work you in have one never Okay, been sneak Gander can the shy

adjusted had we it tailwind. into the so seem I got everybody end that the seasonality, it volumes, and understand you think back drag quarter you at the the smartest provide EBITDA I fourth I be as guys is a be did XXXX sales but think can You period a guidance would XXXX would remember on to saying that of if lower the the up but better ramp

slight occurred or your think neutral that go-to-market a EBITDA changes there given that year you will next is strategy will Gander have be that the So still drag? be possible or do

Marcus Lemonis

to want to I'm address two going address in if I may, I parts. it

that comment that Gander our First sea a sort to of you on our strategy. we I legs earlier finding made were address want

have legs they We our planted. and firmly are

our customers believe are stores doing showing We we're are transactions. XX,XXX XX,XXX open. Our Saturday a assortment to up our on right is and

integrate largely these plans everything our we opportunity Camping of below we sale our by at line in market Overton's and/or to company estate that full rents look stores by as sell the dealerships of As sale our the real World parts led RVs, led accessories up and the have with locations these and/or largely RVs.

in that process. or of worth it we stated and million billion as don’t at process have want us generate these to give this of months I through into as will when does past, for beginning that $XXX worth that the XX up revenue investment ramped and we the we process. of We take forecast EBITDA, fully not XXXX, get that to XX about believe and for we I While prepared mature been made of demonstrated are a I'm to the are earlier, believe has not believe around bulk maturation that, the $X.X

Seth Woolf

Okay, thanks.

Marcus Lemonis

obviously bit a the they those of because the that timing transparency reason those of our of come about year how online want starting give the little we balance Part happen. and to we to are units revenue the for and raised full

Seth Woolf

Thanks great. That’s guys.

Operator

Merrill ahead. our Bank take question next We’ll Lynch. with Please go America from of Rafe Jadrosich

Rafe Jadrosich

quarter you for to balance about to Rafe. said were you’re in how do taking think then about where promotions. quarter in you it’s the I that the inventory, Hi, spoke second talk my you improvement you Thanks just promotionally first think going Can able compared afternoon. about the Marcus Good and you questions. when forward?

Marcus Lemonis

and transactions. marketing. on to to results activity, organically talk ramping of the It to store And sudden we when openings. Roger we new in promotional acquisitions our management advertising, a grow undercutting all come is But our prices. up both ramping and we the what I conclusion that people have think that grow through to the team in digital we're about all lines up mean means want or are paid doesn't I of and cutting their event increasing and front remember Look, want have that that we

change we we're well our even second that a doesn't plan have inventory the to quarter it and our strategy focused marketing want know do in in positioned the they want local mean we really, but aggressive if we take that granted to their well many and their sales a before individual to need profitability. back have because very and really that something, and don't floor some or strategy, half that the we the or at will at third inventory any particular like in one feel managers too means competitive, manage us isn't to laser aggressive the to happen We competitors. maximize markets do the of store strong way quarter we their maybe Now and have we discounting, feel maybe of believe aggressive, what unit latitude markets advantage every we digital their to improving opportunities from process sell of the be be We those heavy manufacturers year poised turn. of are there's a position to are moving

Rafe Jadrosich

you and do OEM on levels how Just at when feel followup look negotiating to the position? the your inventory capacity, that, you about

Marcus Lemonis

lot smarts. have don't intelligence, of sale. of any solely, and one of relationship a with lot a are fire primary managed a of that and not I to inventory Look they them three believe and Winnebago, companies And solely each temperance, but think any believe in our we lot those and where River that Thor, position dire exists of with a we largely companies; in have Forest has

and buyer this America we RVs we're of I is the are an largest America as of everybody, remind largest unregulated seller RVs the in Now, and in industry.

why back But any least with, the deal to Obviously, we or mean in do volume. normal pick year. opportunities there and our money, any we so, the programs aging are sure don't but make doesn't some half the the through panicked business point a want assistance up the reason do And don't rebate anything normal money we of the out that see and of they here of to make partners or that two be we sheer our see there to distressed at make of because not or enjoy norm. that course with vendors we may we

Rafe Jadrosich

trends talk the you just at about stores? your early you’re question, sign Sam final membership Gander of Good one And ups that can seeing

Marcus Lemonis

acquisitions. to Gander more The RVs key goal behind more could where was Outdoors or we in could capital then do sell find do making it markets we additional efficient building primary locations and

gets benefit affinity wider are that the that is funnel outdoors, start The for we new and as secondary funnel, Gander the our people an customers finding funnel. funnel who in as they we and for with at have those Fayetteville, be are in may early and in relocations. and in maybe RV higher different But Kenosha, Roanoke, of seen we’ve our the level prospecting a

attract to We have it able consumers about maybe being never seen success shocking before. RV who the to knew those and lifestyle

seen club customers that I next the part think we we a return, broken well. believe good this XX in our that us the maybe the has now of we've XX in the is company believe Good X we five and is a and X.X% of a with our When in a big million the of thing growing at about otherwise seen puts have is, have Sam that that pace we the member increase that it. than biggest is file front and milestone of as for a modest even growing which growth never will ever we're strategy we for expensive while still mark us days at triple to retention look grown would double

company you do, and camp, is RV. we are in story to become hunt, it that clear outdoor you fish, whatever do an you an starting So whether do that

now you of it the well. who you an us how your you and as really internally as advantage RV, drive for has who people are that's jelled in back do in there RV, story and new You taking an activity didn't well, know, drive stay

Rafe Jadrosich

Okay, thank you.

Operator

Fargo our And moving go Tim Please on Conder take with Wells we’ll question next from Securities. ahead.

Tim Conder

you. Thank

Just year-over-year they first a a the $XXX RV that if I the down comment is correct? site inventories couple about were clarifications million may,

Marcus Lemonis

Yes correct, quarter-to-quarter. sir,

Tim Conder

and I And how then think side that XX% that made you right your Sequentially, had by a non-RV all end, by so from I QX, collectively the sure tracking? right way Marcus, that looking the portion the that and that's related is just year okay okay. still, retail inventory, unit to along could PG&A still still end, that is want down I if that make be then year first comment

Marcus Lemonis

CapEx. bank, I this fungible. think to back invested I and that the want is can and to that like in year It's for money keep ultimately It’s of do be put inventory balance plan. what like we and want mind in in not the losses that any obviously recovered not our that is

next opposed selective did the our and us that that and growth an can we is tell XXX for the will six over for opportunity consumer XXX. if be Camping there it efficient we stores stores set existing at more World something so months and in we we business those from and will example. and Conversely, have period Once Gander accessories for will combining we Brent’s to is at products seen all as World locations are doing tested historical a well our stores them when a will Roger’s, have We years World in well. now of some we assets as and for we and We stores, perform are Ganders let two the existent As typically some And took those my Tom’s, like inventory have see back in any we and these quarter at those then and don’t in tried out, if sell increase in a not we into that so the to have through locations true XXX like Camping we've strategies not by of look that essentially register, significant work Number saw or what that Camping and not right two stores products of we World for of Camping them are we do that out, solely are reason time, assortment did mild what into expectation reasons a short seen it have very those down products and a one the have one, World linger. modest categories if assortments results. matter we shop parts not now Camping in Camping authorship. in of that don't pull look Gander we the three location or cash back pan bank. that World had and more hoped we stores full pride integrated that double-digit putting of

of assets no if making in our that lease for process inventory a make that maximize have there but to, of is this will pride shareholders. pride there We the we authorship and to the out sure return back in so get that we pull to combined and in is utilize move

Tim Conder

we’re sure be So say by say is roughly very little would would would thinking distinguishment to of Outdoors a couple were this the going, say it fair be these by the fair it whether what and to we this where years? of that kind XXXX, end as to of as not original to be World should in that about end stores is interrupting wrongly Gander Camping be or stores, there make XXXX, just to

Marcus Lemonis

we have look you into like walk John’s couple When we're RV RV everything same efficient are fair, a front walk need Our duck, business to that growing the act today and our Gander, when married not order we of operate duck. But they of at like and own growing Camping you we see and we if a that the unique it brands went World, a and database look in use to that dealer in to and like a be our to a that or do file are a Kenosha our like RV few some where you’ll duck, agnostic not or lot company you more. a an Obviously, nationwide customer and names to it share we unique go on can years, to independent like one short but or a some we're specific many RV market, next building. growing categories the what's most traffic. it saw he is markets, goal not capital. be and those whatever There are a we that won't, that to go the our in would smell brand market company were will to probably there world, either have World, Nelson's opening own really it size, Roanoke week. brand so doing how And may and we with Camping married we them have dealership

Tim Conder

said two be your you your last for XXXX? little also for Okay, unit aggressive take just just as Thank and comment you about questions of the expand your it broadly, industry part a preamble then sales retail may on see now and more you.

Marcus Lemonis

the years. estate XXX next standpoint out supercharged five five had the have five we well downturn to We and we were years from I huge a we to believe testing Fifteen of growth sheet decided start to human lot in then first build how of a XXXX, in Roger we a and real RV and balance number quarter of where next are this XXXX we the scalable ago, capital business the years out the downturn. end the things double both dealerships and we then to and something the coming or that a standpoint a trying we years spurt slight that figure of today were had the model in is standpoint, a at and positioned

as is do place. in seem years. have the bold it's did our we're XX have so we're in we And predominantly in system, bold we about everything And of I not next the talk five we the when saying may aggressive, controls that to structured first It’s way going an while years in operating as the business structured. sounds, it regions, because that

acquisitions process make We XX we the to days. in place the inventory or XX have buying have in and ability

to industry this the we're the great metrics we're you for health return strong. of south. off feel a when see the have our into of the with you have north existing integrate the without, bellwether and are we're they, with do we paying we that good because wanted we the core Right feel of like are We we in of why to coast-to-coast, want of are don't any outperformed. to every inventory and to in of which is the when construction single always bellwether the trailers talking manufacturers which we now be build stores the the the focused want feel What XX locations because and ability size hitting We telling industry. we stores the manage shows rest XX The We outperform, business is but have is we these that us locations We for aggressive double see survey and about shareholders laser XXXX to is this profitability. business. getting color you’ll and investment. to to our returns margin this industry industry. on good we to travel team with we need strong one our that give That hope around ability in

Operator

take next Markets. go ahead. We’ll Gerrick BMO our Please with question Johnson from Capital

Gerrick Johnson

at points, but I at new you to you. like Hi, holistically, I'd down mix, cost a basis sales were you understand want et pricing, cetera? take margin look RV by XXX impacted good look the closer Thank afternoon. pressure, to margin on

Marcus Lemonis

you more And a everybody sure have mean, like aggressive heat summer know in selling the there I we into Dallas we where grow explosively get markets anything by certain when that that more to and were I slightly for may were a to we season vacuum. were gets trying I'm don't really was of decided competitive. the impacted example abnormal. be little

that, isn't did were it, did the I lower in material and no but that there let's we do prices winter and - to have We way them Roger our up a that I for go the out a earnings just claw back, they're way, have imagine, back men and I we're say because personal enough point know aggressive women because no to In chase do some make own for markets April and because in don't the their in to form or business want alarmed it Midwest and were As you on anything recapture it's we those either the could to be that markets that I terrible coming terrible pocketbook. we’re we about. of or Northeast be the give needed shape, front market. ground. lines when latitude to playing somebody get strategically their to new you else that trying to catch-up to think the and

are had F&I want our that's small big byproduct. very don't to We able happy I set were that very side Will us we guess buy because we'll at margin look in explosion that a going should will it. were it cost back. but that that trend give all give alarmed specifically positive back months we that even eight, more inventory we next any how be the new a over erosion that we to, to us we that XX We on replace to expectation, and be don't able the back? margins inventory We lower anybody we a as than see it's believe about a thought on it six, we at

So thinking I total in or we change by the hey their and quite guy, of don't how it but are frankly want know hard you to to deal it's people made ahead you're a cut XYZ compensated tell up because XYZ, you methodology. and doing that's our

managing a deeper it it than sure doesn't make are that. trend to become We

Gerrick Johnson

like what I've year-over-year, inventory I where that response One can about to appreciate new you a I two think and RV on per talk heard was you’ve about it don't here. it looked but ups to follow Okay, dealership basis, me XX? leads XQ, compared talked

Marcus Lemonis

we QX, end of XX on relatively a of the flat. end inventory that QX, our same and at XX basis So is store believe the

Gerrick Johnson

Okay improved do and forgot then those do recapture it sales I'll of weather the say where early perhaps or regions those year? weather, some enough that lastly bad about it some of those would did you we next see think consumers the to

Marcus Lemonis

change certain change say We year. strategy the It's the our not and we're would of operating and hope find We to overall don't far up want about the of it talking forget do revenue. how philosophy units XX have our get forecast. to markets. pricing we’re We it, picked back. some seen business model our We because to our claw to XX units that change exceed we a about really would that whatever RV have XX, to in don't next to in think in never back compression want we consumer I'll XX, margin profit compression that we

Gerrick Johnson

Thank you very much.

Operator

question final from We’ll ahead. Please take our [indiscernible] go

Unidentified Analyst

Good my taking afternoon. for Thanks question.

within Gander. So understand wanted I kind the opportunity of to EBITDA the just

guidance of about Gander the $XXX it at revision million to XX will the looking $XXX just swing, like a EBITDA order think goes million the So that the year, then, of this today million looks expectations so to so loss way in and XX is profit it's months, on to $XX EBITDA it? that a to be correct

Marcus Lemonis

sir. Yes,

Unidentified Analyst

Marcus something… you mentioned earlier and Great the then

Marcus Lemonis

Can provide is context more the clear? so that around color a that I little

Unidentified Analyst

Sure.

Marcus Lemonis

any are up doors trying back-able certain back amount you isn’t in get that you a training marketing. that's you're the you to obviously start and add business of there's starting when and open labor and customer the So

fixed. while back-able, climb tailwind to company we we a you of start amount that add momentum the overcoming B to because numbers, A were integrating out were are some different, people traction those liquidated our here. new cost start you get those a that to shut sales you build heavily a and so into RV open, that were right? tailwind certain like tell so, get leap, What quickly repeatable not some was back C And sound it is look does when start service and but shiny behind fixed not they're big structure to and and down moves of because some objects at they're have It pretty RV

or doesn't to taxes it or labor, sales service so we require RV or these add And as it require products locations RV those rent incremental of doesn't incremental or Camping electricity or things. any World

the while - point, company in but this full this a World it just club. experience difference from added again. done Missouri, We've is Springfield, seems is starting XX to and and And to XX way for seem Camping store, a it I on Council And want we're of don't we that going quickly. all pretty getting we getting it scale it dealership, will because it feel to occasions, put that scratch And that very a investment and stop to we Roanoke. growth at We've by is months. the up we're doing land, Bluffs, bought accelerate so, a from do feel The Nebraska, extreme, built we it there we really know we’re that getting a of experienced in we marathon and of is economies history Iowa. our the a and a about have like good a out over of normalized. healthy Omaha, We done the a the front, from extreme like over several important company volume and piece when it accelerate this burn is dead

Unidentified Analyst

how helpful and very sales about to where just earlier can online some RV capabilities, followup, that’s you percentage growing been think the you be? are mentioned done and and can that's just Great, digital that today talk of Thanks. what investments you in

Marcus Lemonis

and in boating sold, sold; and moves systems we and a historically we’re they've fishing, the And products to to ton sales The the RVs. on them and one are a the into start sale. our then has where that’s disparate Dan’s and web the a all are excited and is and where wide about space consolidate fulfillment. consolidate we're customers marine making that sale that our of the leads centers campingworld.com So obviously that is to of which to and convert on think online about and qualified accessories is very to for excelled transfer talk parts DC with from that record RV historically into Greenville to DC a of that a TheHouse, has revenue revenue we website Carolina, going overtons.com. operated historically talking we're Uncle We Erehwon. operated which Gander, on them North report distribution generate internet zero our they’ve the warm professional at strategy disparate single use

human with Demandware will a will live some have it had that installed investments the technology investments I and When that that that. any of we click additional of allow mouse able centralized made some called changes XX-hours. have every brands inventory brand plus to mentioned We capital installed. and Demandware launch system have new anything is to and warehouse pull we like of out assortment within be any Never a bit a do or be

able be whatever's same offer have Camping seasonally World vault. had the in so thing. Gander, that, the like anything to will We

in a with higher any brands had World, able find to start the with through and and to multiple webs. We different rank for. marketing them but this brands the our And do brands a brand so, our affordable way grow like or to search world our of paid is that or come When widen look widen that up strategy, was And them whether we I Demandware a show them want one sell our they're with of prospecting if funnel five into have folks to be the the start that landscape differentiate one cheer sites online, we outdoor to rank or and to wanted our different up Camping way in changes related them master a with difficult the some to to the do dominate. and six throw strategy search cooler organic world, in when of or an believe keywords ourselves. we one that It's that world, breadth and or high will to online product presentation layer. using your you in funnel a that product. at That funnel, you with and whether of we RV like add creating all looking micro presence. strategic ultimately ranking you way it more then efficient they sell the offering capture We strategy. categories

Unidentified Analyst

could as Good as selling well? also the it you through well mention you be products did other World Amazon then And and Right. be Camping

Marcus Lemonis

the we're So, Amazon against a us requirements that that up is lot leg fall metric changes our that a and giving will have capturing making we’re and - people web met Amazon XX-hours of but these making the we competing within has to be through be just capital as to are you preferred have people a able adjustments that reseller only all and to not of human businesses well. through by that not ship technology one and will be own

Unidentified Analyst

thanks Great, luck. and best of

Operator

does over or closing turn today’s conclude session. the to additional question-and-answer any like Lemonis That for remarks. Mr. back call I’d to

Marcus Lemonis

and interest Camping continued your World. for you at Thank support

our the As to years call size we the next to speaking earnings five November. look on Thank you you. over business look our quarter double we forward of again third to in

Thomas Wolfe

you. Thank

Operator

Once conference. you for again today’s conclude that your does Thank participation.

may now disconnect. You

Camping World (CWH) 7 Aug 182018 Q2 Earnings call transcript