CWH - Earnings call transcript Q3 2020 | 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 Third Quarter of Fiscal 2020. At this time, all participants are in a listen-only mode. Later, we’ll 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 are Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Karin Bell, Chief Financial Officer; Tamara Ward, Chief Operating Officer; and Matthew Wagner, Executive Vice President. call Mr. the turn will over to I Moody us started. to get

Brent Moody

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

Marcus Lemonis

joining investor afternoon section of back for an us you’ve initiatives key We XXXX. the in our balance our today. time. this vote. outlined is of for hope held a not, Good available chance had thank you, information you call still Investor September, we and We website. year If to on Relations and have everybody recently where still our That

periods. prepared we’ve I’m strong was trends $XXX quarter over XXX% million, an period Business any XX-month million. going to of the and EBITDA the prior EBITDA September up then $XXX into we’re with through remarks, ending Adjusted year, all-time adjusted for be So, right XX, remained was jump It seeing an prior been Q&A. nine-month the nine-month XX.X%. margin brief to was positive the for XXXX for high with October. Adjusted going or our with EBITDA

$XXX resulted over quarter, increase year. XX.X%, the the increase $X.X $XXX million for over a Gross Continued strong million, $XXX was profit the revenue XXX margin demand prior in a Gross improvement year. billion prior of of of million. an basis-point

diluted the the to $X.XX XX.X quarter, $XXX XX, the were per pleased the are believe for September improvement. XX.X% be continue expenses, to nine-month with of we is gross quarter, for profit year, SG&A ending XXXX. and a percentage there our Earnings for million for compared and we or prior still which as While for share period $X.XX opportunity

the ended be our floorplan sheet pleased And cash in $XXX position. improve. quarter with cash cash equivalents, of Our as offset of to to additional as continue we well million our million an continued $XXX account. balance We with and liquidity

over remained that Our quarter. strong million account flow prior cash cash and cash the our flow position, including $XXX increased our [ph]

at up is of the deleveraging million of remain capital the of healthy to investment focused the our working through million returning combination Our as use most We quarter, the business, $XXX efficient which from shareholders. $XXX on our and quarter. the end of capital a very continued previous from capital, in is

believe separate we are competition. in us proprietary our We systems, improvements making to from technology significant our will which continue

opportunistic We’re new basis, least On store X RV and through a end as year. the the to quarter dealership and be to times strategic acquisition, of the development We locations by credit X year to with eight end combination go adding XXXX. times locations or investing in of in our that below plan developments ratio forward per we the and our XX and market we leverage versus store by determined acquisitions, particularly the a new this of new as anticipate ended X.X X.X six and at to end of facility open dictates. QX, year expect senior this at under at

increase pay that Class be obligated in declared actually $X.XX quarter, mind A of regular $X.XX we dividend our the the annualized per Board. special $X.XX not until from dividends, increase is common $X.XX to our stock in share. $X.XX per XX.XX% share. During dividend and share we they expected to dividend per these quarterly by from to are of Keep are to announced our our to quarterly a a XX.X% Combined, holders

over A of week, Directors of common our addition, for $XXX stock, In our last a stock program XX authorized repurchase Board months. up the next Class to million

and from XX.X%, business. for margin our profit respectively and Good Good Plans revenue and gross quarter, in the XX.X%, Services increase high Sam over increased prior recurring with X.X% basis-point margin Sam a gross year. Revenue the XXX our Turning to increasing

over driven including assistance, all was extended our our roadside assist. insurance, growth products, warranty, Our most travel

our RV revenue at retail stream quarter. Looking for and outdoor the

in million, price. selling $XXX.X a XX.X% a sold by XX.X driven our increase X% average units increased new revenue or vehicle in New increase and

gross XX.X% XX.X points Gross the million. or XXX.X% gross profit XX.X% million XX%. vehicle profit XX% to our units vehicle increasing on margin $XX.X those XXX increased $XX.X for margin points gross basis or with new increased increased increasing revenue XX.X. Used quarter XX.X. profit New revenue XXX also and or with used $XX.X basis to increasing increased And unit Same-store million. sales increased

significant We activity our and in to tools online investments and brands enhance and continues continue across technologies. digital to grow proprietary initiatives with experience and Website new growth. all

like We XXXX, in cost growth management, will supply inventory continuous inventory with top We excited the year nine-month challenging from use our grew in to allowing the manufacturers and staff. period personalized on them But, efficiently. customers, that focused XXX the chain paid focused with user platform, approach the we with has been XXXX, has our ended clearly purchase over Through management digital our experiences an year our very business. beyond. experiences we improvement XX, disciplined to our For and our for anticipate capital advancing next we sessions. which million, view stepping a XX and like without am improvements very are one-on-one million In shop, controls, September believe before, proprietary sessions I’d foot remain while never technology in in for a dividends. very-disciplined This I prospects inventory about supply say chain. to and relationships our our closing, to stores our on result with and personalized our

Finally, in that full million during expected the be we third adjusted to $XXX the million. quarter, EBITDA range year we indicated for of to the $XXX

low operator are to increasing end Again, million we increasing call over the to on million back to $XXX I’ll officially Q&A. our turn $XXX that range the million. for $XXX are the We on to to end. XXXX now the high year for million guidance the $XXX

Operator

take Instructions] Capital Markets. Andress from question our first [Operator you. Brett with And we’ll Thank KeyBanc

Brett Andress

afternoon. Good

So, taking guidance, XXXX million. roughly your about fourth I it implies quarter of $XX updated EBITDA, think,

what than think, of, is way there But, a here? the that looking guess, the spend or change should us of, we conservatism were for. was just be any was I aware I or that most of your little expressing trend in that shy

Marcus Lemonis

range, the days actually the around you in We top of more had than know is our continued XX COVID. be because Well, to I million. come XX the outside of the coming control. don’t what more $XX of with rises And conservative the today it’s unrest to cases what’s at and if that election is in we to think, end look stuff

a with the pleased how things we December to and and October improvement, are has downward seasonal we’re happens to factor on see but basis, to anticipate this We are expecting to normally our year-over-year that had November the that control relative in. of But, there outside gone, be year. that consistent time of continue trend will

Brett Andress

it. Got

million $XXX there was your think more heard to Okay. And today? than of but then, don’t XXXX I I any targets update it,

Marcus Lemonis

point. Not at this

that We’re to in said on final about September of we stages that $XXX provide on the being we confirming. we’ll call budgeting, able what of are middle and next north be our of update we our the million, call. But, expect

Operator

Brinkman we’ll hear ahead. Ryan next, from with JP go Morgan. And Please

Ryan Brinkman

able into take just whether looks fallen lay quarter. see XQ? a It more versus Hi. XQ, historically the or sequentially. the I’m actually or Congrats XX%, think versus XQ, from if industry indicating X% here have industry strengthened be it sort seems might falls that pattern operations an that so you underlying seasonal XQ month you XQ or question. in is your sequentially in to return its to maybe again on X% taking has historically your your of -- XQ. like declined of curious, your the in for own XQ, basis we could pattern it to we in my revenue the one the EBITDA as outperform Thanks momentum, on current the us X% And and XQ, in to increased expected maintaining in a just to revenue XQ, seasonally the land

Marcus Lemonis

October what mistake XX-month dramatically saw steeper nuance the $XXX It a make numbers a look as That’s which the normally a than in a April, month are is that question. inside to line. of seeing are, we and hill stronger good was be No as the no at million, we demand would again. see as top was dramatically, $XXX calendar. that flattening there But, climb come it. much we much that the matter about of hill but really could down And But, is suppressed. QX, to in curve. the we a in million QX

colder to quarters. the gets and it start compared December As slow outside, demand November, darker down, outside October, to previous does

better to don’t perform expect the but year-over-year we QX outperform expect We to than QX. results,

Ryan Brinkman

whole. strong limit cases from unit of I potentially upside see. And for other be comment your sort with chain keep could that get Marcus, week thoughts, it sales the struggling the a RV that some RV in a on Winnebago to parts about supply industry the would put for the to manufacturers Thank the you. demand to up from as the on great

Firstly, relationships et that’s do imbalance Secondly, and margin And your competitors? were or you shortages, case? source cetera, event or think inventory pricing there for implications, demand the secure the be help you the than what thirdly, in that better your scale Camping World supply be might could or inventory Company? to

Marcus Lemonis

bigger going with where the a up is the final say existing dealerships in the XX is at challenges supply our consistency days, that the could were it stocking over think, produce to maintain a year I know repairs could some to ability believe manufacturer’s actually chain think, year at addition continues pieces I And I which to up. it that certainty We on itself, XX even exists parts to that manufacturers completed drop keep point -- of to for supply least expect at goods. historically. happen unit levels demand when degree, fact had demand a issue level make take will I don’t the some that like a to and outpace the that to least chain that the to to there we that

means it. Now, there’s is a The demand margins with plus would still that. along behind and is and minus plus a go that strong

would different to things I going does the and the while pleased was industry receive we through manufacturers that to bigger at other struggling with product how planned our a faster six we get And and some a more going think, with the months us relationships dealers top were out to to ability inventory, inventory, advance at in of is one dealerships. how is, are I very have because who’s eight in cases really find inventory pace. arrive QX the and they in gave the navigate question like

competitors different has sourcing Camping that think, are. invest on also supply in it that itself World it great that We aftermarket many. be in the partners chain I or with and do understanding expected what more a chain, you state, chain to against two always something strong they Industries great investing that supply business in Camping from accessories Patrick as so overseas been needs into who in it’s should businesses whether issues. parts where supply it’s Lippert, manufacturers, do is like could expect will but and holes here World up because its work leg are the And we is partners, those have to defend of who have been

so, we industry the find ourselves pieces. middle that And to and trying an needs that in parts of support

quicker. we’re competition inventory terms our we resources as our up on to a into the market leg expect of and to so, going it receipt our to And And tap ability get to well. bring in of

Ryan Brinkman

that share for you balance your or the announcement of like $XXX over is repurchase relative to capital priorities, your the two just it repurchase as view allocation to clear And as Okay. you more shares opportunistically investors years? repurchase at program. full authorization Should to an intention discretion, lastly, more the million

Marcus Lemonis

Well, we wasn’t full something our never intention. that would announce

actually between our we look real management isn’t let or that. to marketplace sit It and team a first and fast. hopefully Board a have. on placeholder that for execute shareholders best we But, an the not better gave putting to our use. opportunities for if of did are times. a down very path. that acquisitions our a discount, highest or buying use when to as to It’s one be was the The me and need as my So, our have the But, go want all we’re right hope have authorization that that going to is customers, best we’re me is dollar make and options. we It estate presented down at But, our opportunity and clear we sure I at hard in be buyback. much our that at I yield delevering -- to about authorization the intention making for then to

Operator

next up with Nelson Rick ahead. Stephens. we’ll And hear go Please from

Rick Nelson

sales is is sounds as also comparison Marcus, that October progressed? the well. you can sequential numbers discuss just in quarter reported? like tracking to It tracking you trends the How

Marcus Lemonis

well just our at the the operations, to going give inventory part Matt that that better. Wagner, performance I’m you Yes. color, have as the movement who understand oversees happened of time, to as same

Matthew Wagner

we to in saw in bit replenishing better July, greater our constraints through in of chain our QX, competitors. were with sequentially we a obviously OEM and terms that sourcing of our through of we encountering out a we supply were throughout partners, greater supply maneuver a But, we at for moment. off than were able we some as chain constraints inventory results level brief a at more found Coming Yes. to saw better QX, April inventory believe rate, rate beginning to little as Rolling it June. first we

better confident levels replenish sequential the as improvement I QX, started feel continue, QX to that should come to we to extent heading Well, inventory able into of where a sequentially. So, our closer to we’re especially actually see very meeting year-over-year such continue demand. we by to end an improvement

Rick Nelson

differences? At you what season, supply given changes and think you will Do the see in more potential do demand consistent with normalize point spring selling inventories sales?

Marcus Lemonis

that very to be hard dealers The be surprised able get be a to XXXX. working would would I manufacturers the normalized in if it utilization. are was full at inventory to level want

remind the there I want manufactured more they’re reaction, the patch up soon. appetite just is I RVs to that sort we’ll XXXX, Winnebago everybody and whether like a that to that’s end regular with this a in basis. one River we And they to demand compromising robust out be not expect XXXX I I slowdown We’re in is pulling -- fight together stops. producing continue that XXXX. or do doing or will there COVID things thing be all quality demand in don’t about they’re Thor, of anytime them Well, quoting notion XXXX Forest something. are just on what And than for to while think, the meeting deliver this

is important XXXX, to RVs year XXXX were point reference it’s that guess So, where of my have not most will be. sort manufactured. that the the

would the never would buy. long we’re the dealers independent in As time you’ll record dealer relatively happening supply the I fragmented seeing it. you where what’s that record for in is but the that stays well. to as in have consistent, And to risk marketplace numbers, manufacturing see about want as also exit expected What’s appetite expect chain a odd process see retail numbers you’ll XXXX with

think all-time to one all-time high, cash. industry being hold the highs, would would and people on want the but not of all-time the with that that of at You manage one highs the

think, is I have and the appliances with their the is have good secure work in chain process, we’re to able or to furniture whoever conditioning, or and able awnings or manufacturers air I to the that the with to whoever hands terms inventory, hand their year be I the able getting but supply manufacturers, whether think record. relationships coupled it think, that the in maybe, inventory will, with We that, XXXX normalizes. year -- will in be as inventory. be will of the they’ll able think maybe new I a charge set don’t But, see being lead where it the

happens. I be should think, before we into that XXXX

Rick Nelson

as you supply long outsized as there maybe constraints? to continue GPUs, is So, these expect would that

Marcus Lemonis

used, I’m sorry, Rick? the question around was

Rick Nelson

Marcus… The GPUs,

Marcus Lemonis

Yes.

just an Camping it’s but spills sort us. into of and not overall, industry over think, World, I it as the

externally and were an really and had the take part there is yourself I of early to think you think internally XXXX the We’re it’s the issue. going only that latter constriction was My we to glut healthy we this margin before. of RV And margins. see we’ve -- of when short-selling is inventory, part ‘XX, just continue argument, time both to back I where don’t if

any I where there’s industry, a think glut that’s inventory. of

X.X think, is people forecast technology to dealers way. from to a the reasonable a RV going But, a industry for along while RV make the here. sold to need for get and homes are clear. funnel I and The thoughtful or celebrating there year, manufacturers given here. funnel get using XXX we’re I with the and the a bigger only over really, are going ourselves And million being bigger RVs is inventory like doing that better job made other to in the in in really from industry plan only million more America.

And RV to a think we where is. to so, rate close the the potential penetration isn’t of final homeowner an anywhere

the So, years, through our next existing is existing put consolidate we goal happening in from XX building ground continue or that marketplace, a the is And something providing the laid to several we’re times, up. where we a buying can several can been industry, this -- in up, we know the the going some we’ve to are to dealership out both year dealerships, to absent as facilities execute. we buying odd things marketplace we X number that

I be market public, share profitability share. share we the play all We day market people not market since and compromise think, can gained, game long. but at should going that is, we went will focused is of on to not said the the profitability be expense we’ve day what And over how really margin.

demonstrate, company, faster. with third there’s just control, all bigger SG&A along bigger think, of expect get I I fourth our quarter, good those this hope to and the a But, would the that balance get quarter between will perfect not three industry, and things. we

Operator

Swartz And Truist Mike take up with we’ll next, Securities. from question a

Mike Swartz

the the the ran from learnings then the I virtual at terms to the that plans your event in you in metrics and high Marcus, Can sales quarter wanted a just guys during of show. future level as you say middle on host well? to you that of Hey touch that that could in share, may or

Marcus Lemonis

that good. part connection as of apologize. got you I The question? isn’t half. I back the just repeat Can the front

Mike Swartz

quarter the sales you So that ran Difficulty]? of during terms in just [Technical the virtual event

Marcus Lemonis

Yes.

So, for thank about asking that. you

a or that with are driven the continuing virtual and event pivot around activity. restrictions a we’re customers while So, I exist restrictions historically our we a to whether us. the to plan will weekly desire the in our based activity that a want to hopeful that interacting lot on marketplace, and show way And was business are a our all show keep for have it dramatic And doing in associates company. add we our a be a to our vaccine that short to and doing something in relates have that. basis, a moved little the week of the we’ve to continue COVID as on safe, cure COVID will our come we color fact customers and virtually order, to seen

sales RVs. we location For a way is the we our the on and to web well gone on time has terms of improved, and years, technology starts as that appointments, of a continued are number the at and leads garner has activity in the really ends execute and at brick-and-mortar our the it And our evolved store. now selling how have of has our in function process set

in our which buy XX the months all for there XX in regulatory the an in And their we transaction next of that ever the can’t That unit, over a platform, that happen place. we that for delivery. focus that as mandate the because to leave XX with having that than that plan is the suspenders execute securing fact. RV an next arranging But, states potentially have in putting wanting of And there. the before. create us forward, the would leader to most XX to that they is about XX we the on, around many prospects be interact As are the we And And we’re process and customers our include while to to are think it ever online. customer to ignore we’re months. almost that, We’ve company home. required and that our without seamless moving differently it are to framework a to that’s business absolute that could allows spent fully seeing to choosing know as price, financing belt years a execute, laborious space negotiating includes think

goal So, the XXXX other manufacturers we the in certain have small DMD single next months, maybe it than while America, of being that’s Hawaii online, over state end the Alaska. we’re are that by brick-and-mortar will state one, and from our prohibit transact be location requirements, that And in a XX every a would to location, done. a there reason is, able important with regulations and that relationships but things

in every be those in state. have a have minimum, So, things, all a order to hanging shingle to compliant we single with

If element that We cars. their you seamless does sell like is a in new to the space, the through base experience. our customer that and lead an for their a a company to relatively cars think relatively that control the in that particular to we process mandate company to XX We it Carvana in it’s XX next support is a well, ability would missing for charge one months. like compared and your absolute us database that entire

we our the a how really It when in them year-over-year September, show virtual wildly a was last I ground testing give look numbers to So, was at test would how and year customers the of Hershey more did respond, of how that react, that unit. successful, had they say this year. particularly if we was process see we this you beta tour

up in alone, were I those think, business. in shows almost September we without XX% our

Mike Swartz

a into That’s lot obviously color. of and up entry-level starting new more or Okay. And ASP just quarter. or ASPs into second on Is that but to timers a typically read of year-over-year X%. the factor talk people, was question anything in comparisons were product, on A the first that, value during great numbers? then, coming there new the market

Marcus Lemonis

up. something into artificially particularly that. to price average one, Number of the unit, read selling inflated the lower There the going end in supply, lack absolutely is

early procure that not a continue in think months. please But, XX-year don’t to of et So, The up XXXXX trend continue XXXX, less It olds. expensive in will did first we that XX, potentially opposite. XX in [ph] units, quarter the for part because the We quarter. come to may back will that’s extent cetera the this don’t for we the quarter. of the for that of kind and down. as demand, fourth continue demand that number the did the go them of seen a that unit quite lack demand have we’ve That previous never XX, that the

Operator

up from Please Bret with ahead. go Jefferies. And hear we’ll next, Jordan

Bret Jordan

chain process? hands dealers being discussed You on inventory. with update the having in chain in an time us were that easier mentioned supply the give your about supply the process maybe I you think an involved getting on Day. Could thoughts you it the Investor

Marcus Lemonis

the outside purchase. they first. of companies of at most of fulfilling Patrick primary be want really And of and to that trying are aftermarket Not our aftermarket demand That’s And desired business want to that enhance OEMs look RVs. for as ability is our But, providing much that that things we includes That’s to can. working place we’re but replacement our a find Look, as to selling accessories control do to as for believe pieces, of manufacturers products on an we The we because that. on on us a mattresses. the work these. platform, the do The side them and are list the as to And that we’re sales benefit RV. excellent side, the know understand furniture, of appliances, and parts look that of product. what demand we the Yes. entire parts able there squeeze our control middle OEM Lippert is we see there like on electronics, everything destiny and of goes on to inside aftermarket. we in at on aftermarket OEM that for the to have stuff job you

be wouldn’t I surprised XXXX. So, in

on I up our to do efforts OEM that own we’re a but It’s that. If not our destiny, and we that are to the business we’re something certain ensure aftermarket part become investing that items on know quintessential see to expect ramp money Company, to our major our of controlling would you sales side. start want to

Bret Jordan

And sort about off maybe rate question. fill of you Okay. of XX% think a the you inventory, at ideal Are and of your then, when far level are How you? the have are or percentage to parking space loss and full what mean, I what which we? or XX? you at think you when would percentage your about like on your white lots,

Marcus Lemonis

concerned. In you as we time we obviously right? It we at asking But, that business floor winterization in hit of a that’s the where and were in that happens far year depends on normal are what we and seasonal aging we P&L the more looking there’s our June, required. would that because June, the cost were want Bret, be curve of our and now plan

that if entire the X,XXX, you’re think a Xnd, -- a natural X,XXX it’s said is, by and compressed you it say ask So, XX, meaningful. would coming We’re start like days. which fact little We short? XX, me, would to January in normally a units day But, how for if be our whatever maybe inventory a in could enterprise, But, few, doesn’t the bit there’s much even you right our that in to you November, curve. do sound December build XX we like across We lot. the do think year. now probably maybe they short on salespeople stores, you

are look one from quarter really and the that how really our we sales from know. argue missing? could even you results don’t October, We If much business at

March up on up. X,XXX responsible rented X,XXX us be My So, X,XXX, today. units we’re hope or you be ramp ground about April. have expect very to very pragmatic we in April we that significantly we more could is to maybe than going But, by even and to how the more do

Operator

And our we’ll Markets. next ahead. moving Capital Johnson on, question BMO go Please from with take Gerrick

Gerrick Johnson

statements. some in the margin Karin, maybe we quarter’s could talk in the gross pretty the about Gross margin? How financial about items strong.

What growth year-over-year, in about to above basis, that of if be? the look should $XXX you driving pretty it million. do it a the this particularly So, margin, what on high? expect SG&A an some adjusted are at then, side? million quarter? vehicle And $XX you significant so on think Do stay And what it’s drove are components it SG&A, gross you

Marcus Lemonis

not we’re we’re answering lost new new focus people. I people, gets those businesses and not is of Before our ventures as the a business into dollar. grows XX%, make being more adding our dollar XX%, focus staff, but SG&A grow. just real under percentage will and as we sales SG&A, add the What that, about me questions, on make technicians, want that or we gross we new locations SG&A point as and specific always our let amount -- dive on acquire more always we the on and number a profit. open Because gross the gross XX and sure focused under on more business, to to that percentage

Karin Bell

sold we the mean, year prior more thank area main your the question. in And driver for services. in products you increase more and I the really obviously and where very much is in units compensation the

increases So, are to substantial the compensation there variable pay related those plans. in

are for and in the the quarter. the is decreases that last obviously main compared savings There by But, store that the accounts in the people when in compensation those probably areas number to expenses change other change quarter. offsetting in So, were the with stores. those that’s largest driver changes far year for in

Marcus Lemonis

side? the on margin then, And

Karin Bell

in an margin we’ve On side, the the seen margin. improvement

But, We we’ve are our accomplished in improving. we It’s and those, more. have looked that. looking are Good at expected which script. Sam increasing And was be. X% where to improving margin, the our discussed unit I them sales, in had believe at specifically we I specifically share believe That the the margins we roughly

Marcus Lemonis

had to in you were peel want Good year-over-year, phenomenal I compare struggling onion the change process through liquidated you importantly, if margins if as more And the when you a growth. strategic remember were we we Sam on that our back, product. side. But the the really we business has Gander at think, mix, of in with look shift

that of contributes because right? business billion but think gets million over the You’re on lost of that EBITDA, contribute dealing I top line revenue. size the of doesn’t revenue, even with the $XXX people $X.X of

sort perspective. it look it, a So, because at that, you has of of and different

motorized a we continues margins Good We continue business, within to business the strong. Sam to margins expensive be to look our we these drive continue within and And think we at grow business from As effort range our really are away are if think down sustainable. range sustainable. F&I these you a

missing to I think, see sure we it’s in out down because records to some here. not make time setting just a continue transaction margins also grow little, but every opportunity we’re that we’re an get count. we And I our want nervous

Gerrick Johnson

answered think on I next question sustainability. you my

question. more one just So,

that You to term or have about pay on ability loan, $X your down? what’s billion willingness

Marcus Lemonis

it investments paid go month have we quarter, our of capital. and question a to is, month fourth highest the Well, all assessing the down. that And half we we’re a down about is $XX The a ago. into million as willingness pay capital. of We

much obviously we to goal Our Company as to is as continue the delever can.

a million first early But, flow think cash pay of the to in our million, but looking that to $XX could be excess sweep. quarter. We because coming to I be payment down determine always have $XX will we That the debt. anywhere too up are from it’s

debt on things line, of based times, end all the the believe if facility year. of we senior definition by below be will the in our X Our stay credit

number. that with comfortable We’re

we’re to said I historically up fact, In X. that comfortable

make buyback. on our If And out so, accretive clearly going one. at our see service or are we technology those. acquisitions side, at business and to we’re make well. million that’s for return why our on is want back to We those there’s as the one down the value that. our buy to going investment stock, if to priorities And value clear. and authorized debt the stock of us look ability -- we part where side the the do for when of investment number the areas But, that’s we’re capital we clearly best that the opportunities there, good our sure look find to use, a business of of are to we reason $XXX that Paying making there’s is highest on the of currency

Gerrick Johnson

looking on good X% Okay. on I’m idea. I guess, the turnaround. it’s more

very So Marcus. much, thank you

Marcus Lemonis

You got it.

Operator

from Marc And a go next, Lane. take with Cohodes Please Alder ahead. we’ll question

Marc Cohodes

a an job. absolute really Marcus, hell First commended running be job to and the a in just the on year, of of all, ditch you’ve deserve show, done you tremendous of

sales? questions. at How year, As i.e., hurt would has have you constraint much think year. table your terms cheaper? or this the where other have view supply or how ahead. look go buy them you mom-and-pops is That’s sales in to -- channel couple do disruption one. supply finally much forced And you Two, I you of constraints had a going this acquisitions, of the can brought more you do forward how in

Marcus Lemonis

The that XXXX, But, a right? they the the that table the to the But, we today sort where We we of one were me. pretty in is good on answer at and and better ‘XX in anything performed our actually or are would it’s customer be whether our telling light at we or you that not. the of ton know. dissatisfied I idea set, we have you the they the and inventory the momentum one because the are in locations money inventory. dig they when that year to if hard of rightsizes appointments of it. had a our And first look I you started missed themselves, get of where into conversions that actual numbers and shape. we’ll ‘XX, performed when improved, into and leads didn’t I’m ‘XX, suppose I’m coming you the with swagging, don’t excuse hope with being ones the one market still of as XXXX general managers of -- question really is margins being managers, experience those say left

I’ll us in June, some challenge and the big year of as year back And March to XXXX, been we’re that’s RVs And than And for think to forecasting we more blow May made we believe really XXXX, going when the our so, us. year COVID while of up know it April. that’s we a goal what had. or hit, for in would have is kind we don’t to us. it And really any where was biggest that were again, continue made I that process which coming other was forward, the keep

level new XXXX in where We’re QX the that and And or watermark have watermark. were March looks QX. had not going the the try so was to amount came in just so was lead may COVID probably May And as on QX. looking much up bad first-time we company than as the to But then, June. forward nearly QX and and hot market. at middle much at buyers QX. dealership April that this side better to ground the was end what to like There’s the of find is that in so discussion been a candidly, noise of of there indication it make

healthy. dealer or big be how for sure, needs it As products first we industry the not be is single small, goal, for to overall XXX,XXX, or this successful head year, into want needs single to every we’re manufacturer, house whether providing to our place. matter But, we XXX,XXX. and that stays in to our the industry be XXX,XXX, single supplier be no single next every in successful, Yes, industry supply chain every dealer, to successful. Every hit

satisfy alone Our company cannot of demand. alone all big and the dealers that

more that somebody we do We we’re than buy in somebody. XX healthy to Truth to previous in for the And the What industry on want the industry be going had sure inventory people us. surprise Because focused making we last acquisitions. so, problem. else’s don’t in to same the change told, because space very is be XX for the days months. we overall. a isn’t exit to calls It’s gotten the careful is have just buy we want into exists constrained to those very grabbing that looking

in to have sure we’re am the the winter. winter me, them probably Right But, take make on excuse January speaking, acquisitions those about we into we may with very new before. capital units we’re the the is they’re acorns have And that concerned. and to have smaller that now, in hope that XX,XXX openings. making, X the who care acquisitions -- months and and into X on of XX working to about while that to the we’re XX concerned XX made bring that X than and to order. store for in I’m nervous as the XXXX. What’s factored a we don’t I environment And and a have and ordering factoring survive So, in we’re foremost, dealers to locations as X to of we they concerned want I’m them, the summer, different out, bunch what want had but February going first we definitely they today. X very

Marc Cohodes

Well, chew broken glass you. than rather with I’d compete

is part an and with Competing you bish. just think problem. that’s I the absolute parcel So,

do -- space? through So, of much does acquisition though to grow it. add be, part where that… is capacity you Just want you either think How you you’re to geographic or have certain this just how white regions

Marcus Lemonis

company, to common. location. really up to the on find can we candid ability limitation the right to this commercial very on next however important which It’s is registration don’t months, we We identify, done that the strategically dealer the be a by markets see taking build our grow XX fixed totally And before, land you that of is what us out to could when where plotting said where markets really quiet. we’ve balance we happens costs, that new hot our and any we started we’ve we to and looking candidates XX really, side, at open

a on exposure to minimize presence. at ramping digital and our dramatic working locations those shrinking our up very We’re pace

complete to X Claire Cape Cheyenne, Wyoming going and the we where We transaction Oshkosh, location. delivers our and next into to And years. have add customer have like online believe over XX Eau through or accelerated anything that walk to and piece is they a ever and year. the No Lincoln, we of and to can touch a where And quite it will full X the we paper a happen never their online frankly be are the markets a picks unit Sure, home, completely Missouri, and Nebraska, locations to without to going able Wisconsin. Gerardo, mail, growth problem.

that And are up where it fixed we’re believe up, all and our acquisitions We’re North we doing And those renewing measure fixed Fargo, those. to to making estate we we’re doing have driving Dakota. not down and without driving real isn’t coming comes renegotiate of the costs. with continuing revenue in that all and right leases leases Minnesota But, things. costs, those

having when the $XX up technology without to that we so, do about more we line our can And ramp talked $XX million drive add as try ability it. it the side, of may know end We to on requirement really or million top being a than spending up our we brick-and-mortar to location.

we best We’re it. to to don’t grow. to But, be the want order at in mandated do it

Marc Cohodes

phenomenal Marcus. done Truly year, the last of difficult probably just job a most this Well the in years XX. one over

So, just keep it up.

Marcus Lemonis

Thank you.

Operator

Up we’ll next, from take a question Kennison Baird. with Craig

Craig Kennison

day. I’m to you chose avoid today election Also, assuming

F&I Question So, to were business, nicely. F&I? you for What key that. the thank drivers the up very on

Marcus Lemonis

the and entry-level really skew value. motor away Well, products sell to good we continue we’re ourselves for customer show a home, to able as $XXX,XXX-plus

things we excel is selling the of that One menu process. our at

F&I is I them dealers, exist Good when penetration think, can value office And Sam. in and significant us which of that throughout things we But, else nature from we selling we that ask we of the branded difference we whether every And year. warranty in the sell that in that adds the products about noticed Good like certain in or not. a to A-B product tested that single the roadside brand differentiates may Sam. addition everybody that thing is menu and

stores virtually We performance get more so it, better our training but low-performing a from up in of the not now. detailed since have nice also more seen across stores, working our our to move execution. we QX, everybody just starting QX stores. our The have like particularly And bottom we’ve ramped are significantly at list training we they significantly average training, up our and may can

a and folks stores. acquisitions our Craig, down shift meeting I XXXX on quite these products, in standards. in years provided with up coming XXXX, strategic closing developing in aren’t were honestly, the that has new distracted laser us focus with new of think, we and training those

Craig Kennison

up impaired little But whether by sense My tough a And with not you’re about the growth side, then, your clearly just new. source as the supply. volume used lack used it’s X%, the maybe than result, as talk pleased was RVs. is just strong that really and sheer of used whether to on less business,

Marcus Lemonis

fine bountiful, supply-demand in really If that wouldn’t the good. margins was a as curve. be It’s line the supply

side, our used. for it thing be least, to inventory work going not used to the right, ever to that. I we that timeframe. the that’s digital able do But, bidder continue team used you’re check we and look would like with And then had had December think, the to whether to to know we processes, in to have used. time. as to November, the be prepare strategically and long Last an today. for we’ll right? maybe accounting we’ll of XXXX at XXXX used I dealers’ we is cash marketing -- that been think, had in are We’ve season. modify properly up that been through about selling our are new ramping But, $XXX cash, prepared the than the get sure January go as efforts to it selling find specifically for holding that. But all shorten and procure million we today, at We’ve than get case, working to looking that and harder on stronger highest the a appraisal need be and successful maybe we We’ve ways auctions to representation season before, a making at side, the of in to come it some relates has

we We will stores RV are more they’re tells nothing called our what’s launched. know what we worth one customers looks that access is like others what worth. tool. pay of “book” because Every and can than you now that pay valuator the more. officially do. The more will It And things reason the

says. can to way not what worth the up because used book We travel a unit pay is what book are is trailer it the willing for the for, old four-year sell beyond what

to accelerating is because starting volume our we’re so, that of And see it.

see consistently. you’ll It’s it. trending October release our we nicely when think, and I volume

at that stores. of is advantage tool RV us them given has think, part I selling both they’re the when and a on them when the are trading evaluator understand things our worth, curve to proprietary they’re what

Craig Kennison

I Could an talked you on had And rollout give in about just strategy. think update plan? you then, finally, your us September, collision your

Marcus Lemonis

made centers. Very that have a revamp come offer to restoration that and executive an pleased and announce collision we relaunch our will in to senior and

will they All of the collision centers January of and be rebranded our Good come Sam XXXX. collision restoration are centers. And

the of least approach of a the is collision We know growing expect to two-pronged year. our at And business. at have them that XX to there start we

For XX% of alone, just the million alone, our at September there. million the number on a revenue think example, of $XX minimum including labor was around labor labor on not profit. think $XX parts, I with year-to-date XX% gross on there’s opportunity We through collision to

business. of reasons One the case is of its think our that’s we we added portion restoration the

that people with dealing have accidents. just not We’re

This everything want And that one to stores. what That’s new they floors, people restore with already is supply roofs, of graphics, on dealing and new you We’re we would is do-it-yourself, buy heavy-moving that new the finding the restoration, Mustang cabinets, side. the trend. in fast also to have. we’re new a a needed like why space enter the XXXX new

financials, out to expect huge So, be a as XXXX. speak margin to able contributor the next nice it but in will we We some results. our you that growth months. to over see them us We won’t in could break XX

Operator

question Credit from Suisse. next, up with Sigman And Seth we’ll a ahead. take Please go

Seth Sigman

on One of structure. cost job the follow-ups Team has over year. here. couple A a last nice the done

year. be that You next be again? up thinking talked with And top we line. this on remind into what as expect could adjusted the How you ‘XX but that contribute Do restructuring, obviously as pick expenses growth the of should basis, initiatives it where buckets, would would start will to early you to couple year? about strategic if well? Gander SG&A to it accelerate? lower about more see an come those us the a well, just like start the the point the up, that to Obviously, compensation you At is

Marcus Lemonis

low. was compensation actually our XXXX So, not for

paid employees their you In are ask fact, best particularly performance they year. basis, if the of had Company, a on most those inside that

at number SG&A our any that reflects is. So, expect There’s SG&A the what fast at in compensation -- the numbers don’t accelerate no there’s anytime. nothing I that that. nuance deflate pace would to

mind, Renegotiating In looking time that fact, other contracts, the at leaks of in to is the a we’re smallest The services, than you individuals. anybody, have key of in bucket. as need trying to an maximizing understand our organization underperforming eliminating spending But, return. lot renegotiating this my things: leases, always outside revenue. as what we SG&A, week know we better

And products individuals balance so, make units that very their we’re and are between or locations that eliminating or services business who trying weight. sense, to acquisitions, accretive find this carrying don’t contribute, including making eliminating those not don’t

in leaders business. us accelerate card We credit in have that organization our a will brought things. our We we in believe new leader help of brought some new

But growing start need Look, in our web businesses that we greater performance individual activity. tight else collision relatively process. our these look calls And bringing the products more bottom leader than We is center. need know top simple a control top line. is at call on what our on business. we in we line anything the transactions, and We’re need more of a very more strong as to line new with standalone to

Salesforce with there is there. commerce a ton We’re We opportunity help our in think to ‘XX. at business closely drive working cloud of online

on or said basis double-digit cylinders. e-commerce XX% we all is expect, I that that SG&A. we growth that When before, to range. annual in the expect We If a up things run few continue got executed better control have would perform ‘XX. that peer-to-peer XX%, return. our just go you with pointed metric us out, gave than expect we we opened, a expenses an through to our those we as in good And just stacking the think a we on But, from XX%, that I side our it less, to means things new all could P&L. expenses. launched, bit got be, don’t stores eliminating balance can’t little keep those our there, as We on

Seth Sigman

That’s helpful. perfect. Okay,

think I Let very obviously. ultimately me I ‘XX, follow-up high margins gross lot margin. up they’ve or But, guess, around fell come this you on and this XX%. quarter, the do When RV the just know me, you back excuse ‘XX it’s today. year XX.X%, where historically, outside -- been gross new a of go

more maybe can will going But, that and where higher. industry just I so think, give perhaps is the us suggesting be rational ultimately? you’re forward a you for sophisticated, feel that

Marcus Lemonis

one, I years, the think, number the supply we’ll are be make is better. to but That’s demand curve our X because historically. X we and because systems the coming materially than not higher least is for the at were just to from the is down the moment laid drive rate. moment frame manufacturer getting the we’re understand it where at customer receives in money to And really starting their to opportunity the tight

new appropriate front to good the inventory every last management continued our side the and of used. What find we’ll mix with on to dollar. moving trying margins keep We’re

sure to better make drive confused want I something. Gross margins Now, look not price average that that by selling you down. we’re when materially

have buoy collision make and And our a make or inside years, in we but don’t the which right we couple us heavy don’t we’ll travel heavy leaning those see on basis, of on is order in right which so, anything this or $XXX,XXX in magical, those bigger to $XXX,XXX, anything Not part think on as globally annual of margins are trailer next better, to EBITDA double-digit business, because goal, you XXXX I used, we our were part for on where of sky or pie pressure we’re much that up. heavy of going XX,XX And in eradicate out the in opinion. those on of to think now. for know XX,XXX why margins business that historically centers always in going XX% because margins units, but in see compression have mix. done or you’re we’ve the those going an find leaning to puts leaning have [ph] to a a because smaller our trailers our margin we them we our to is $XXX,XXX, business, margins, get and see I XX,XXX and travel XXXX,

Operator

Andress Capital ahead. Markets. And with we’ll follow-up take a Brett go from KeyBanc Please

Brett Andress

Hey.

so that your there. understand But, smaller comments Are is and to or aftermarket I approach there to your a a here something up the from of would M&A quickly, way? ground that and you that options Just get there? desire does involved what you the for in like landscape acquire, look lot maybe

Marcus Lemonis

us see No, try ground I don’t think up much you’ll stuff.

into nicely not Camping that current the partners acquisitions. we need major we believe talking fold at think we’re that World infrastructure. can I look And to about

few on our We’re to a us base, use our base. build and allow to expertise then a looking and for to that that have platforms knowledge

and the they in just of as costs prohibitive. I that. if small not really would don’t ramp-up the so, that percentage growth doing EBITDA And And experience the am But, then The of a you margin. out us I lever the and may anything grow expenses -- on the pressure put to you are popping think of ground. acquisition, take don’t I us business and our have make see And that a business. and knowledge talent then we resources

Brett Andress

you. Thank

Marcus Lemonis

sorry, for you sir. much so Thank Okay. --

Operator

I’ll Lemonis. There no questions. further it to are Marcus turn over back

Marcus Lemonis

want for years to industry on to on multiple top this much that line. today. what’s the of data front today’s bottom the Thank line, so poised much. clearly is just Bye, in is reiterate based the on time most us for believe one our well-positioned And on bye. we you importantly, based lead but very success, I have, we Company both call. joining believe we more of Thanks

Operator

thank now We for participation. And And your ladies and may you you disconnect. concludes today’s gentlemen, this call.

Camping World (CWH) 2 Nov 202020 Q3 Earnings call transcript