CWH - Earnings call transcript Q1 2019 | Camping World Holdings, Inc.

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Operator

Good afternoon, and welcome to Camping World Holdings Conference Call to discuss Financial Results for the First Quarter of 2019. At this time, all participants are in listen-only-mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the Company. Participating in the call today is Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President and Mel Flanigan, Chief Financial Officer. call Mr. the turn will over to I Moody us started. to get

Brent Moody

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

Marcus Lemonis

time Thanks interest importantly your in and afternoon World. appreciate and good your We everyone. Camping more

business We excited our the over progress months. made very are last we about several have in the

of guidance line and for results full our directional in have beginning reiterate, trends has year with $XXX To an shipment sales in and improvement our the calendar the billion forecast outlook April year. despite, XXXX data and with are mid-March for full financial to expectations. into million seen and continued the $X.X we we adjusted sales and it effectively trends billion, EBITDA May. Our quarter Consistent are reaffirming year industry in and the million business $X.X to $XXX our early for the respectively

and time. manage reflect at to one the capital associates way our customers not operations manage and not on both how business. resources, of to looking number our and businesses a and and the that late last Organic retail over One that us was brand, the It our our one the served return XXX location. also overall unique and around We tangible it our believe We how at RV did one are locations We business became profitability, year, America. by capital And the of one business. at dealership a location makes the field independently managing in voice, moat combination shopped all what our most human clear are efficient retailer massive looking assets creates or of effective the the us customer. growth

the year, array that are price profitability specific right focused. increase maximize flatten for by the and and to Brent the the meet organization market Since, location reporting at right at at redundancies, the allowed taken agnostic has by Mel our vaults the We operating product and demand entire have in efficiency. to to me of The locations products and each beginning we structure the which time. Company, right utilizing and having of to directive profitability of eliminate realign from the of steps the is and services us brand our

maximize Erickson, over Scott all under locations XX which Vice management Executive Digital Josh This that RV management of With has increase each Inventory we experience have averages and I've years in for both have Matt respective in developing inventory and will this the and Services divisional Media and team Wagner improved categories Smith business. the in e-commerce. field believe sales. work with in has to Digital we the Marketing, reduce President, RV years three systems areas to concert with who of overseeing instrumental ultimately sales tools and their Management, also Company geographical of over Jensen, been All elevated and our XX SG&A operations Development, realignment, TJ Presidents, business. consolidated over turns. been must have Matt other responsibility These areas. our

Data scientifically Executive Russell acquisition data either associated and way across in consumer for management our that recruited our win growth Russell President experience entire new a rates, years Russell and of targeted reducing this the brings Gentry Strategy. approaches all of huge is SG&A; company. improve of responsible We successfully while Consumer our have is Vice as business. for

improve driven strongest recent Peter our of Strategy, Vice new Look, President Senior the of added price in and Jelinek, right it Development. is areas to ensuring the senior a and was Vice in our with Peter Merchandising [ph], also of and products of our new simply and we inventory stated, Product company addition Corrier addition E-commerce instrumental vendor West years in e-commerce, with years the Chris that new Marine have is has Chris charged the will for while e-commerce our members and that spent team President our has enhancing the expectation the have history positions, the spectacular our website. the We relationships, developing of Peter with one at overseeing importantly, launch time. right right assortment, In team. at with we have last of margins, business. XX been our most our

believe with drive profitability some and have our see to Additionally, I'll brings our product new an are our with business. field importantly entire relationship supply platforms will effectiveness let of Mel first marketplace. We to revenue. over years efficiency our commentary. introduces their and and back come task Chris the untapped Amazon. growing standards. as chain, Amazon's and of established improving effectively entirely be team. not Mike quarter going company's channel oversee this allow Both entire our more we of offering holistically experience and which distribution review fortunate with includes added XX to his our other teaming increasing newly operations fast with Amazon supply I'm results closing our Amazon's costs Cox changes Mike to excited drove chain, our with retail most the To in We that us business e-commerce up throughput, and reducing and to centers, integrating about then and these we could and

Melvin Flanigan

and Thanks, good afternoon, Marcus, everyone.

in $XXX in with was $X.X first the the expectations. revenue million at and total was certain last up last quarter is XX.X% optimization we're Consolidated year. ago. with On year. As gross inventory came quarter impact of million, to XX% margin line million, how and change a mix X% compared programs. from product overall pleased gross last a out company. played the noted, gross decrease Adjusted our which profit slightly first largely in Consolidated the year's year a billion, EBITDA $XX a in for down million new percentage Marcus from $XXX record first was was The from basis, $XX attributable quarter down to margin

which An first adjusted in QX. compression X.X% the from pre-opening back million in primary locations, increase reminder, $XX XX% coupled resulting in factors retail the increase outdoor $XX for and impacting were with add the the SG&A, million RV of a As year last and were year. full in profitability EBITDA expenses, included quarter a the margin

and results, managing synergies memberships to million and the continues sale and we posting strong derives quarter locations goods drive roadside The and segments, affected credit $XX and from reflect two of plan which and segment top after number Beginning and XXXX, associated Gross last elimination necessitated were a in them programs, change lines organizational plans outdoor to are travel million segment services The on and at segments. X.X% Club of of two cards. RV programs, in contracts primarily insurance and we're goods servicing our that up new bottom and those financing new selling under XX.X% service the and RV credit activities. of goods the or directories. segments; QX, that shows to million in realignments and retail RVs, up co-branded insurance deliver greater the of and transactions our the the property vehicle responsible operating club emergency commissions revenues in card outdoor was January reporting retail and last of sales, The Sam reporting services of represent to segment RV goods a effective year. RV between segment. to the in refinancing, $XX sale services this from outdoor from and products profit and programs Turning revenue Xst co-branded following revenue contracts, made year. primarily retail and and XX.X% RV and The QX, extended line services, Good $XX revenues, we're for drives ,primarily and with segment business from inter business. casualty and and outdoor how vehicle a events segment the and publications first assistance, and The million sale and of plan assist segments $XX finance

retail inventory million revenues, gross billion last from changes from $XXX last in down mix and the certain programs. to a of was was million to impact X% profit transactions attributable after XX.X% Our of combination outdoor in up RV profitability of segment revenues The year. XX.X% year. and and billion, elimination optimization revenue $X.XX product or inter-segment decrease $XXX of retail outdoor and slightly RV was $X.XX

hard to quarter, During into about last an or reduce address normal the total XX% the same leading the first in the quarter, end, free inventory certain In to effect Inventory increased and quarter in cycle this up growth year. order year's first cash build. to in to compared worked seasonal overstocked both moving that slower X% to levels increase we products additional

SG&A, than the need believe the always year increase increased the year-over-year improved million increase RV we to quarter and increase while and season a year So, locations, expenses driven a busy the mentioned and was including outdoor board. the to far associated Consolidated seasonally modest increase we increase previous related overhead the the inventory amortization. in I QX, into operating with in in across to $X more entering $XXX expenses by expenses this in earlier. operating for incremental selling retail million selection and was depreciation wages, primarily we're meaningful in and X.X% product build The

the significant our our as due to aggressive $XX exchanges combined at in to benefits move to the million transfer quarter's by center transfer amortized expense stock one expected million incurred adjustment of tax compared million change goodwill Sam The to increase that damage related Inc. goodwill and of members that liability partnership the addition, resulted state termination applicable benefits the in organization $X Enterprises to CWH. and million. stores additional TRA or and result and provision. reduction liability Make we and in this to rates This unamortizable storm P&L previous line Seaport. business. reduction our or interest the reduction from an $X borrowings borrowing the our has bulk management in the at future amortization of expense card subsidiary, thus, effect a the $X million The above and subsidiary in for and payout reduced RV GSS yield CWI in TRA realign higher income first three our related combined receivable as QX impact earlier XXXX, The QX. associated previously the distribution to costs related an impacted income fees, XXX(b) future quarter in streamline $XX to a for other believe Other $X $X reported available income and transfer totaled of provision in It This last offset in tax year $XX at trend TRA floor will the by resulted is we more of million the with the was of to million of year. included a and the at driven $X approximately agreement subsidiary and both step-ups up tax in un-budgeted than professional Oklahoma. the other Good LLC increased rates and million both units closings, a factors. our just as credit in to This -- also the tax TRA progresses. Club non-recurring tax primarily expense Overall, $X.X in In plan million and store liability, charges as mentioned. the the to benefit I from of originated expense, average in of both tax A other with by of million retail in converting assets tax was an outdoor we level.

certain assets associated assets tax valuation and to CWI and First, deferred of Good pertains Sam the allowance inter-company changes transfer Club Inc. the to to in card Enterprises related $XX million credit GSS from in changes

fact million turns a by to to full that the to offset not XXXX. -- entity the resulting Net time least $XX ended And third, not and related rate. the the as group subject the to assets available million million has $X.XX of expense, that's quarter recorded quarter per deferred at in allowance of taxable loss tax until to and profitability. the loss change income Second, generated related losses related $X Company taxes CWI reevaluation such valuation XX, is level fact are to estimated it's a for $X the certain was share income March tax from tax was state ongoing

X% cash we and the equivalents and $XXX with a quarter net up year Turning from inventory and cash $X.X year-end ended from to of working million is our X% $XX capital sheet; Total balance million. million, of use vehicles, The increase due increase ago. grow an was year new an ago accessories in year increase and our business by initiative product to in driven to driven our a versus this stores. by used our parts up and

credit dealership At XXXX, loans basis total in $X.X March million XX% the of payable on inventory under secured $XX of billion floor RV floor facility. had plan revolving under plan the facility, New floor million and estate a X% declined term $X per under our and outstanding $XXX notes XX, year-to-year. facilities of facility, we of plan million borrowings under outstanding real credit senior the line

turn that over performance summer earlier. with optimistic the previous being are to the the our XXXX Looking our Marcus? challenges reiterating that call to we're feel mentioned ahead, With as season. as facing I'll Marcus. well look we outlook expectations, Marcus weathering we we're and the all-important industry line With in for in ahead essentially QX our back

Marcus Lemonis

Thanks, We're the ready question-and-answer for concludes Mel. session. our now remarks. prepared This

Operator

go [Operator first Stephens. We'll with Rick you. Thank Nelson to Instructions]

Rick Nelson

over about growth? the afternoon. plus what saw year seeing you third was Marcus, Good that April sales XX% you can trends I growth EBITDA and drivers little remaining would you're during May guess around guidance, and color, in in to talk that prior a of imply the the a levels, first and quarters, quarter about EBITDA that that quarter

Marcus Lemonis

Yes, sir.

our not The over disclosed in tough had all clearly results about had and was and we February the into early serious was saw that had comp. we two mid-March look as it February, February. it were we a to in our and seen well, when knew Januaries headwinds the last be us, tailwinds in call, those us going and we show that and forecast quarter Februaries biggest So, don't April our and and -- experiencing that is and headwinds biggest that first company quarter that had the previously in facing May, be there fourth were January may while and in that months we experience we reversing and January ever two that ton of a industry knew we that we trend pushing at in the discussed leaped January last that

web Our dramatically. up traffic is

is stabilized and May, we're softness Our experienced in traffic normalized, and feel fourth a cadence returning of April in up that like the foot more we had we to to in the sales previous quarter.

to the -- relates with we tough. knew full in were $XXX new revenue, had were last growth exceed very and we experienced in as quarter the our feel million was earnings to the it we As into deeper achievable. us is we line because And that headwinds that that met knew was in for here easier we we that where and be we today, very softness that $XXX previous Obviously, in very line we confident, range about also year. the sales get earnings or earnings, locations, or the about were we margins first confident of hard but million with are expenses as up guidance But, our working forecasts. feel quarter year whether year a in we And our ramping to call, that the to number talked and that hurdle good fourth we're terrible as expectations. on much third unusually we we going profit knew sit

Rick Nelson

growth or April May you be moderating seeing to fact Just are in early in seeing period? over and clear, what declines you're this

Marcus Lemonis

think of industry, two have work funnels like much I mean, we I data from. to Well, the

XX, more not that stat but un-audited, guide include are. unauthenticated to But, for because And a these that have have definitely the sure quite XX, to us been we is that down frankly of manufacturers predicted would data I surveys shipment all year. there's then, the has and I'm numbers whatever which down what some we XX, XX, the down alarming would be We big timing issues. down provide it states numbers doesn't we call --

projection mitigate then, for get number would to January and climbed more distinct way, and all but severely. then year we hopefully and it We back And X% down to stat of stores surveys the February significantly were lot softer manufacturers, large and and used at most really We from think X% the to our was and our factors positive as not into over mitigated but side. XX%, that that down I March X% soft, hearing the our around To some anticipate year. X% continue to that it knew it up the our quite think answer you're about basis, part of easier. business as strategy total stay really about interesting on macro continues normalize. point, turn several itself which around just be started In comp strategy. new as that that were use what a from April, what's be severe, as April on that to the the employing in right that in with new in frankly is is we're April assuming while the next months the I could comparable of half not constant a we was this down about

Rick Nelson

relative I your how that ask initial learning's which again and performing if there early him Finally, expectations? to Gander can are is are about RV

Marcus Lemonis

from about I'm a business RV as thinking pleasantly assisted and candid, be as severely to more Gander an World. as we retail more pivoted surprised away company To Camping have

offered the full standalone now has locations, are re-assorted and in Camping the them have warrant that to historical World positive. also signs outlier brand Camping necessarily underperforming a to because the and are us road didn't And locations It continuing or taken RV. we and Gander locations they facility RV allowed early We collision and have them. are rebranded branded those market, assortment and but service the brand take

profitable, know of locations is. think our we of we wake what that one forward, make those that regardless have can their going marketplace we XXX plus about we they're edict up day locations what the assortment think I to of an every expect regardless and called, every as

clear be those their me locations wake Let up assortment. we thing, very about when and name, brand regardless we at of look the regardless one of

operating in of contribute not are to the company. locations do We business positively our not that

that But, months make in are years were World X as of a work. doing to to analysis, we World be And when cognizant or us open pride fourth were work. vocations the they don't don't some some that to old, you RV make to where those we know we X XX Are years Camping some that locations. sure want In we've authorship Now, everything we're we their would need were standalone and that understand lifecycle. done locations, old? require to keep old they closed dealerships quarter have things Camping standalone stores, responsible Gander

first not will I World time it the any we locations. hesitate want the not called a RV on make close operate at long-term. in And work quarter, closed not Camping any basis. think, that we we location will we clear, locations We daily even to in it to does because monitoring believe And we're a

divisions, never organization Obviously, we is is. three responsible locations regardless And we're field of that that. company their forget are what first. assortment RV will those for an Our distinct

Rick Nelson

and luck. a good Thanks lot,

Marcus Lemonis

Thank you.

Operator

Kennison Craig go we'll Baird. with next to And

Craig Kennison

well. for my Thanks questions as taking

first to if that something that getting first just back math I not do clearly quarter EBITDA So, margin X%, right. expectation impacted was in close the unique I embedded to that's metric to your severely? EBITDA mean, Was so the the quarter metric, there's adjusted guidance.

Marcus Lemonis

larger on line our No. Craig, had February become what is to was new softer acquisitions continue we month. have or more all be, company, have we and locations a our than January through not and we But, would you side a we hoped may know, it bellwether Quite And it the for. forecasted. it as whatever February that either with frankly, and in and is January forecast we as know

an part four But, here more to from if have three, normal now, contribute positively as five are dealerships January we be not to of the year we pressure us our all profitable on because locations those XXX and that or goes business. there expect we on on. so more annual it's years And continue basis, will to sit as February,

We of had K. attributable tax the of our as that directly almost the unexpected in filing quarter, taxes of -- million expenses to it the also to for $X.X first $X the million extension related

We with also of But, back adjusting expenses even locations Mel of have associated and some year our added Company million, weren't that P&L closing are that historically we the had certain the those other budgeted. that $X.X guidance. not in the ones full mentioned our that may in though we had are

Craig Kennison

And partnership mentioned Amazon. that all channel? then you I you had RV's Could think, you via Marcus, the with are including clarify, products selling

Marcus Lemonis

new in relationship that will tell a to we a It's outdoor wanted the to in Camping commodities the branded, every that further to product in to be put be more happen their get distribution be distribution Amazon things Company, in the both and vault, they in channel, in book in vault of both Gander important our Company will it be outdoor relationship. I relationship we to we are huge. we one. one So all our the going be you in what centers center and will is for have time, think World never sold the that. soon our can't the our only retail but, that with own the the Amazon the will speak which have the start full it's to products added of into as Company and of Amazon It's relationships that's RV will the and and that time at future the on RV. can speak future this space. and Amazon what's participated can't this At but, offering as our

expect brand So, sees able best the as it. in the were We platform we consumers happen. consumer with as they're Amazon's for across product it, to that as well, we searching the discussions with attract could receives Amazon, obviously prices to or and felt enterprise, that across that select

deal win permitted get can't And months huge so seven not us. to trying mean, took it I done. a the the to for a idea about born. it was about I'm don't not thing but So, actually underplay I talk were to us that -- bigger we launched, make we we it until it

Craig Kennison

of some powerful we margin. lot dynamic wasn't company talked Amazon what clear are a to selling challenges the that when you it is it mention? and also and pricing speak channel with with products you that then Can about but, respect people, And commoditized or RVs just realized again, a you comes to that through

Marcus Lemonis

time, future. this could are what we the in but At not selling cannot RVs, discuss happen we

our for World. it believe as Overton's, today is for leads so platform a we And to margins, that web entire assortment for and new we properly launched priced because Gander Camping

appropriately open all price in previously the discuss and be a to business this in margin forecast up not new to ultimately, to. at this because, have to expect this our not we to the RV we all of knew expect And so in to that brand, compression. moat to consumers space. is revenue and needed and our use did we put we we did to expose properly our margin we're but, priced competitive in expand to any In our we in business compression we be be And extreme outdoor products times funnel weren't permitted to Amazon, but technology marketplace. We support that. our and And extreme are don't that with discussions

Craig Kennison

with adjusted lastly respect EBITDA… to And QX

Marcus Lemonis

the products of reason private that product our Amazon be was and innovator apologize. price label bunch let of in it. of we categories one I them is And so relationship all to important to the that us, a thing, noise to array Part more us add Craig, have me of because allow leader the without and around a wide

part And the as was of well. a so that decision big

Sorry about that.

Craig Kennison

adjusted the set second second thank bogie, as right to finally you quarter? your budget internal No, is and that's what we revenue for so, quarter you. respect EBITDA the helpful, EBITDA, with forecast And just then for adjusted

Marcus Lemonis

so quarter-by-quarter guidance. Yes, providing aren't we

and get me million $X.X not we in not that top we is we billion in the was chose will to provide quarter-by-quarter We QX year, believe easier. breakdown because high the with not you $X.X quarter, comp in of not as miscommunication or to and SG&A, QX. gross we're million third becomes guidance forecast quarter-by-quarter, still into was around decent our and is not reaffirming billion detailed of and we last achieved in to it a it $XXX that, line the guidance objective to looked a around to really as $XXX Our line able into I that vaulted What tell were that to comparison fourth profit. quarter that and in what to hurdle,

so, we understand our marketplace really year think that and and guidance full can't guidance more that. strong is provide that in And just we the really

Operator

And next to Brett Markets. we'll KeyBanc with go Capital Andress

Brett Andress

afternoon. Good

Just referring clear when sales vehicles? then are you kind combined here, of April new is to intact? were was new vehicle new you to also X% down said to keeping X% it be used just that you outlook down X%, And or and

Marcus Lemonis

number is to in forecast year. we intact down total. that for the which And in we in April, when I keeping our But, X% are are down keeping The referred total. the for that X% intact X% year, to also for is

Brett Andress

were up quality done guess the end can optimize that then, what you be some planning ending mix? on over first better or the But, And months the at the you've so I'm inventory of you if that elaborate of to few of that be not quarter, sure inventories for last may I RV may not.

Marcus Lemonis

RV is I -- is we RV a actually down X% our addition but the was and if miscommunicated same on with down it locations and don't our actually sorry inventory store new inventory up on store declined the the I'm new sales all I'm store a X%, XX%. XX%. inventory even sorry, is of that RV basis, know basis down Yes. same

Brett Andress

That's be in probably may relation a I remind to press guess we're before. or you byproduct I anyways leverage on are next of this digest release, any the is, that leverage? where press -- us to the update at but still levels the out of housekeeping question there getting had of a trying outstanding a just first the your stands end release can quarter, the minute just since, profile the the But, covenant us, business there more

Marcus Lemonis

Mel?

Melvin Flanigan

about correct. Well, overall is

I everything on test covenant it's of end think there. out really was of with end of revolver that minor, that it at we have March QX. on good that's and so -- in -- of covenants, There's that a it's more only in not were we the compliance facility really a the -- terms we're a at that one

we going say we're I fine not are. we're not I'm always from cautious doing a think of So, -- now, to for -- course, But it's

Marcus Lemonis

we that -- think is way it Yes. about The

Melvin Flanigan

Yes.

Marcus Lemonis

capital because, of about as think to we'll and we our cash that the to we down bring XXXX, that, come available significantly we is, year, The number that. we way that less know balance leverage back going to for our retail that about it than but through prefer as the think the the that inventory the back of continue we year be dramatically reduce think we about And are vault. our end into

prudent through up CapEx As we Board, opening cash because of a bulk things. delever to we've think cash to a balance calendar as as other some want of up company favor And that doing about on be to of build in how the want we're We that favor people the sure new that make things. XXXX things be opposed of not year would to ton the other one and would of, a in is of tightened we I of I'm which decisions. using excess

RV improving on that But, a focuses little minds leverage, balance improving we priority, things at and and still Now, earnings because, sheet our are Company the to that objectives even of is our we're XXXX particularly, health we come when a back acquisitions our idea the in have to our drop. our the its know that softer when the keep historically of terms multiples plan. going always dealership of open always in been buying forefront Company's

Brett Andress

selling and And have many just open did the locations quarter one how RVs? quick the at how the end of open many at quarter outdoor Gander have last RV Gander of one; did you locations the end you

Marcus Lemonis

way So, locations want I to have about it have less and that RV don't we also number opened But that don't have -- up. we misquote Gander but I think we don't it.

did opened non-Camping locations. differently opened Gander fourth outdoors to at end the and the Gander RV underperforming than the up the less at -- have first end locations think standalone quarter World we because, branded of we about we continue re-branded and have We of actually locations some some quarter

those we And so, I'm -- not I we to locations are will locations XXX say allow may trying what to and have move we not that skirt the have as issue we will exist but, forward. not is we if profitable, over

regardless kind in the doesn't Company. are to operating it We business of any sells location not the contribute of what that of

Brett Andress

Understood. Thank you.

Operator

next And with Wightman Fred we'll to go Citi.

Fred Wightman

know entering a could specifically something bit talk that's But, was about wondering, planning I I'm within just you the out in to versus what that inventory and that used seeing can availability plan? what you're emphasize a customer you about year. talk how from the Marcus you playing used you're business, just were seeing perspective, more

Marcus Lemonis

pretty year-over-year don't use. Yes, in I basis tight. but the a demand pretty strong. very, is is the supply in nicely the that marketplace very used that I nicely am will -- Obviously, so exact up we have I were for on the in tell figure meaning April, you

they of is very go the is to strong strong. we the is if directed side. on are know market the above XXXX, selling a used bringing worth, strong consigning high trading are you aggressive us prices or has be values trades I to very which 'XX side on through if in have value, -- more process see book team unit a they're to sign, If where it? the very their because, a did we is so on if today, are the auction the very, something which what it they're it still outright, formulaic customer not re-marketing And expectation The auctions

We have our campaigns launched capital Mel into pointed we a significant amount and of investing, used out as consignment aggressive inventory. into deployed have

out some that the our we in on reduce to if demand inventory that, is because of numbers. us when Xx, it redeploy some Until if will April do feel to and it, Xx, have know counterbalance for Xx soft, quite inventory turns half million we're that I And experiencing especially retail showed on inventory. our compete inventory, used be Nobody of today, it, and in we March our still used in even there back inventory. compression which to to margin the in we continue particular we I quarter. to take up we frankly, have unique. we're $XX proved every like used first new can As item under capital And the side, is strong that into with more securing a market continues

Fred Wightman

next marketplace And few over improved based shake the then, momentum the the next of sort you discussed, where months, and cadence industry wholesale just is still production you guys in the facing to retail tough comparisons of you've how would couple sit over some months? some expect the out on wholesale

Marcus Lemonis

So have, going what's about happen rest of to ourselves. we can tell we market here's but to the we can't the predict you not what

numbers an is manufacturer year for now, drop confusing for XX%, opinion that the is scratcher because, is dealers a backlog over and more we But, has considerable I'm first pretty that down simple data The were a very customer entered to wholesale because six in but are months River we month seen are in see the That inventory. a the ,you The see have on organization an and retail would manufacturers marketplace and very -- see there math for and sure customer Forest entered are that and were out quarter under extreme and the is planning continue. after you of aggressive. quarter swollen that are a big fourth the I know We the don't weren't orders a our bad. we importantly The to orders XX% know only. have as that's today drops have and drops. We going big almost overly surveys. are profit reason have Thor, entire days organization the some our on was in their don't Winnebago, registrations that. and that XX perfectly for placing the month, a some amount If for XX% I we are we big that healthy that not continuing we're thing par. after were un-audited shipments argue a of We robust just me. we advance, the at in numbers. retails shipment me organization, XX%, And to we shipment what we head fine. segments month that's inventory of the customer they manufacturers is of XXX planned slightly of right could after Then, manufacturers in that inventory cases month XX%, that is okay XXXX, in not in opinion is actually convince trying were stat with my that XX%,

subside as believe it that hoping get of what believe positive, at the in back year. will to into pace. that we giant start so we I'm we gets own you're of a as at we drop zero half this data And part to that the And as industry, or in shipment orders, look our a seeing pretty nice the

Fred Wightman

Perfect. Thank you.

Operator

we'll with America. And go John Bank of [ph] next to

Unidentified Analyst

but questions. can would change of if first EBITDA that third Marcus appreciate And the fourth of XX%. certainly want here, Thank historical be quarter about XX%, don't achievable quarter optimism quarter dead of think really the be to keep reconciling challenge having we're hard the quarter I this you to outlook I year. be unchanged? is represent the look, but, about how X% for market my and a time it's guidance we XX%, about quarter taking year at kind horse XX% if cadence, has kind second EBITDA, the we first I about and your convincing And the the going full been about

goalposts milestones or cadence you you out rest the think So, on kind kind put how for help to of your of play year? the us of going is

Marcus Lemonis

question. your good would a not using correct? it's allocation, XXXX as that I I you're hope Yes, mean,

Unidentified Analyst

Correct.

Marcus Lemonis

And that first to that $X.X it million performance can our be in in relates we was was have as XXXX. with so the particularly, $XXX a our fourth million it the line And you balance And the and expectations better think say $XXX provided and and expect we of I that of to to we market year, $X.X that the about million because forecast million. to to we forecast. to the as quarter materially than second third

of And a have a we So, will for our who side. were, I level I the line I level. economics or and But, look back speak just today million, the ours macro a in to at as which was market why feel was wide was whether to disconnect would provided something changes that is is provided the $XXX debate up with -- the it can't results first full I because $XXX year, be achievable control I apart still challenged. range, will come look macro year at to can't was to April in want there our terms be ,if you to right macro And at look and we and know you the I to think that what on half is $XXX which the But, million $XXX the don't on if SG&A and their wrong? I first that range. analysts a We who million quarter match the really forecast. back that against something million, on that or fall confident be assessment of to what

shift and be could in was But, that top some a profit there could a there in SG&A be there. shift and be there things. could gross was it so, And other line

today, I that's And than problem. be. a used so, any our And reason a business business don't is different it see to why

looking And 'XX? you're XXXX so, year not and 'XX it's and don't assuming what historical I'm know I at?

Unidentified Analyst

Correct.

Marcus Lemonis

business, different a business just Yes. today. It's it's our

Unidentified Analyst

here. on be then moving And may

to opportunistic this thought help or process this -- alluded today. further buying go mean, on I carrying, think and have the just is understand, Does you past the more similar you about structurally is new inventory And I you're strategic you I that? about -- you it mean Does it mean carrying quarter being in what than can us than kind you're last of a comment side. RV a made think less

Marcus Lemonis

more for the So we reasons. the the to I'm on and that delever the definitely on to side, motivated inventory retail to want to inventory XX% balance down company. importantly sheet all cash obvious some put less carry about But bring

So that's number one.

that On for after sales we achieve, XX% revenue very at store on basis inventory. the the I to able being were same happy side, RV was down a

re-branding and were across think, felt more like want we a there. relaunching inventory at location. who taking broad inventory? I we you we not that entire And We look good Matt enough at inventory by Wagner, location when a and we any give our the want location-by-location, strokes oversees want the had Great. in to wasn't quarter. first to I'll Inventory look example. I there And said, you inventory

I'm days little little and You're closed going tying and made to lost location and getting location that bit, those inventory we a later, that dollars. we Two it's my not inventory. close made this lost other a return reallocated for little we've bit, a up a bit, made, little on that a seven years, bit

inventory. and manufacturers I too inventory a the If much a period we doing. back think not they're of XXXX, to cadence get only if, with regular inventory their production carry swelling believe So out get we we less had. on to inventory prudent be we redeploy that basis than Overall, do can it. it most the location-by-location believe we know have to historically a more we that of of yards, that and -- which we to

Unidentified Analyst

Okay, new seeing you trends they're a RV? to a RV from any any used level, buyer that's demographic between signs I'm versus what buy used last and are about RV new more guys just helpful. millennials that are And a thinking apt you seeing and and a high then question

Marcus Lemonis

versus of We for seeing they or new based to can relates are payment afford. used. of new is typically it made appetites or family's not thresholds as needs The have to want any unit type decision on demographics or their used for what demarcation they the

just So, around. people that's it's

like buy we age We new the drop market RV that expanded continue buyers and younger millennials helping is in believe ultimate day why which will and much seeing to It's why isn't offering we're is continues have for average not most single our we're younger the for market, have that mouth to smaller, every attract to to anymore, get wider father's acquisitions, just wide, that consolidator, we to, it's consumers. tollables retirees [ph] which has will always product has of helping anymore, big and we funnel. we to emphatically your the less see attract homes. here, definitely which we we whole be strongly love think RV and are market seeing and that our the track outdoors think buyers, seeing buyers of attract in motor vault a to to is buy people why we online are offering be is But, most our the make -- to is are the which a product our people expensive our why We widened,

Operator

next Jefferies. to Instructions] go Brett [Operator we'll with And Jordan

Brett Jordan

Good industry up environment were guess in quarter? your at afternoon. wide X%, the with and in you constrained you Quick question did inventory inventories used on performance line guess as or used; I what stock largely being look talked used was I you comp does tight the about down, that

Marcus Lemonis

You're referring being our sir? down, used to

Brett Jordan

Yes, as sales decreased same X.X% X,XXX. used to vehicle store

Marcus Lemonis

performs basis store which on new than materially same our a inventory. Yes, better

the willingness book. and inventory the marketplace of want One over we the is so -- inventory our the and right always to getting balance unless couple ramped overpay there's foreclosures of XXXX and in step way to as there's bigger, the and had I is dealers. because downturn, the inventory access much think right? bigger And at the issues, it it. ground. number of is of is it like plentiful inventory values. so we -- not glut used created day, much the on and to bigger. there you the the stuck the overpay for foreclosing market that between much went what There through gotten fine And of and XXXX suppression glut end was The has it's and the the of demand no overpaying with I the because end it a is a up on up a for buyers the plan and lenders so and putting floor be inventory and RV Today, supply to step-up were the a would manufacturers overall think

trade balance. have want find manufacturers be this for to model note, that we and and The to you is important in trying dealers by late distressed that we're or So, to with want new may use that that 'XX. up challenge don't step an 'XX buy that that don't units model discounting, heavy by could you distressed or compromised to models is be

'XX. So are we that all 'XX, in that XXXX, and their putting having Where we're -- dealers day on people XX's be kind in still values our until for 'XX trouble new that that really their for. new that. It's sweet we XX And to an that what we're because certain up step as we exists, XX's ourselves XXXX we're don't to spot and had are or on is. see of long. the have oddity trading curtailments careful liquidate markets are on inventory that's of are having real looking XX's That's because pressure targeted that stepping certain

Brett Jordan

this that or your follow-up listing doing And selling your product product one for online and you're you fulfillment on where is doing then Amazon; fulfillment? them you're own to PX, are

Marcus Lemonis

that mass We have. distribution they both. of don't have that combination A

is have were fulfillment well. product And imagine. very agreed standards those to would going Greenville compliant our are done also other distribution into to to we as Amazon as facility both now high we and center, Amazon shipping So, an turn you then which be centers

ultimately looking both can't we that on for the how sandbox. channel So, have know we the sides to of revenue. we we're -- do We play maximize

Operator

BMO Garry with Johnson [ph] we'll now go Capital And next Markets. to

Unidentified Analyst

afternoon. Good

RV inventory just to figure? clarify is year-over-year First, new X%, down the that a

Marcus Lemonis

Yes, it is.

Unidentified Analyst

service on And product Gander -- other you there basis? lifestyle the then the you same-store store performance Can way any legacy talk outdoor and performance the about that the a to well AK, is decreased quantify about XX%. all, of talk product, of can first same product

Marcus Lemonis

even open were full of first stores we're I or two those are quarter. of not only bulk them one them, think open Unfortunately, the the for not

days. either In a don't that legacy as we're we is disaster In handful stores that performing yet. and product small or see in slightly February January where did for accessories we York, pointed Camping markets Michigan attributable of largely weather eye and cases pressure on had some those We keeping have had markets flat it's certain out. and So, unfortunate we some data an New Colorado that markets, parts in very some down closed traditional Pennsylvania, several in we nicely. to World locations like

And take it in quarter on so, online. the products some shift markets. the chin shifted the slight there's the little noticed have we of also bit a of we where products, been those early non-installed And of a in the consumable did part more some have that

the But, we're that we part profitability on watching closely of so based in weather that ensure And see some the location impacted. softness did that early quarter. to isn't

Operator

go next we'll Conder Securities. to Wells And Tim with Fargo

Tim Conder

for you question. taking my Thank

store down XXXX Marcus, that comp expectations? the dollar sales unit your clear, be that to expectations is was wanted for Just to X% or X%

Marcus Lemonis

dollars Same-store for XXXX.

Tim Conder

down On area? or to RVs, you for okay. there prognosticate industry that similar retail, that your is want then And in still expectations

Marcus Lemonis

have the industry for our of a opinion the speculate. don't want Tim know a you're and industry, I we do to scientist in we're but on numbers. know don't we opinion, I the an What great bellwether

quarter more what we out big think the the the there year. RV realign numbers in team. I And a be knew have of were into we which think have sales quarter into will dramatically to comp effects get We numbers be seen into year, to of any SG&A mean year. is Winnebago, of back management those quarter, should of third in what the first that imagination a we example. We the good I know And golf in the softness positive stabilize expect as told the we in some expected by particularly a we We XXXX it the wasn't than do is better big quarter. we January half in all the we and numbers you not as industry was April a as that February. heck fourth the first some the And is We to the comp, because would that the know good a deeper hurdle but chunk quarter. first everybody is fourth and some cut year. manufacturers. there with some we stretch And our bellwether candidly hurdle. as of saw do accelerate difficult even It big had numbers. as easier we whole, its saw lot a we've that store coming

Tim Conder

And strategy… the used

Marcus Lemonis

is Just the in was the very to Company's April, give color. a more top note. a -- the April history. month of you in this biggest little important April April line

Tim Conder

again, X% the down right? on comp But basis, was Okay.

Marcus Lemonis

sir. Yes,

Tim Conder

Okay, on your used strategy.

third a of the of rate on but So your used new units ASPs a were basis comp down store increased.

the fruit versus there new? maybe used margins So year-over-year there us the color on Can versus trending how pivoting are looks bearing give given those the backdrop. you

Marcus Lemonis

and we're to course, need margin I margins wanting with inventory think me. would have Dealers used front as competitive a of Still some few to on And better. first to performed in have you to trying of still to performed trying unprofitable. it over better, sell get The used inventory. of to always know things. few We compete. I quarter slightly by feel in historically not out the still we're things. feel has saw don't inventory because The need the compression get We the new, the you liquidate out manufacturers remain of We don't imagined but

aggressive You that we look basis. from September, significantly. November, every at policy be a going changed in we -- aging I get X% XX to for X% pretty that stuff use some tightened north and we standard days. winter, for our the started to the as want the snow still We lowered acceptability We a stores of October, in the do on by in up unit December while; that We the sat we on inventory in more opportunity. decision is first right? was made quarter room liquidating aged think to that think about percentage it's there and

of And still quarter performs bit materially [ph]. spite so the all do. did But we to first gas we little than having inventory anticipate that in a my still in of don't it's that continue to better opinion new in

Tim Conder

basis margins So in used higher gross just QX points basis were on points margins? new to to be about clear, your the XXX XXX than

Marcus Lemonis

Yes, sir.

Tim Conder

get And Mel… I think long-term and X% want points, couple indication of a to are. X,XXX those historically, And of close it's got been but in that up X% kind of just may be a then basis to years for where one to an

Marcus Lemonis

on have I'm color that probably And when to put Tim, uber-conservative those I and I numbers, me. than want I'm there. just of it front -- you gap being wider -- extra that uber being is give I the I don't it's that conservative, in when say

I learned I've so being lesson, I'm don't my uber-conservative number. -- And in because that

Tim Conder

That's you said make as little were that sense liquidating that would you inventory if to compress… that some aged bit more

Marcus Lemonis

is being what than I conservative. know No, better it's but I'm uber X%. the saying no, I'm

Melvin Flanigan

exactly or Yes, it's X%. X% Marcus,

Tim Conder

but impact to then to -- your the change implementing is at knows accounting reporting X% that a from grossing lease lease new with any the okay. rules? going accounting did up X%, the balance in new Mel, there to result of sheet And everybody there's P&L be pronouncement as the So,

Melvin Flanigan

really no. not No, --

Tim Conder

I perspective? whether here can the pull you matter to if anything you the World five terms within gone lastly, you that's at any then the then, on purchaser can color to you know too shouldn't how in last want point in all repeat three and may, but Gander give over RV And that just year that then of can And but this that say I network give locations your trend? that any and truly Camping stats give,

Marcus Lemonis

types addition that least with we're Gentry, And people internally Russell at data of providing don't the like have going of available. I be to those dashboards.

better So our that we understand how to manage database.

business they who machine. have. to need with have is businesses disparate get giant and Salesforce. our the DMS those relationship more of We We operate You'll today with understanding, of Sam, to a because a quite reasons, need the and have. more that historically that need for the business is of to customer frankly, on systems of be efficient multitude dealership retail that and out what the even And Good challenges one of type

Joe digital customer we're or either understand work behavior. has that, have how so through should us. that have the marketing, marketing, Smith continuing print we Tim, our we're data marketing, build email then on with marketing but to getting to and And don't like We based doesn't we what And fast. on data we better their consolidate so

Operator

Marcus I to this back At the like over would for Lemonis to hand remarks. closing time, call

Marcus Lemonis

reductions very is be put one We that stake more And management our America. made, the confident RV in we've couldn't the have where very the a Company excited that about ground retailer about additions as the confident feel made. we SG&A, we've about going. We in number

expect So quarter. to and to the next Thank you continue so much. to look we perform reporting forward

Operator

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

Camping World (CWH) 9 May 192019 Q1 Earnings call transcript