CWH - Earnings call transcript Q1 2022 | Camping World Holdings, Inc.

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Operator

Good morning, and welcome to the Camping World Holdings' conference call to discuss Financial Results for the First Quarter Fiscal Year of 2022. [Operator Instructions]. Please be advised that this call is being recorded, and the reproduction of the call in all 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; Matthew Wagner, Executive Vice President; Lindsey Christen, Executive Vice President and General Counsel; and Tom Curran, Chief Accounting Officer. I will turn the call over to Lindsey Christen to get us started. ma'am. ahead, go Please

Lindsey Christen

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

Marcus Lemonis

first us. with them. results Lind. around of Thanks, report Good joining lay and On the view. and as today's our out call, going our and we're we short- for for with thanks quarter the members I'm macroeconomic discuss comments here industry long-term financial trends management supporting XXXX. team morning, senior also results our We'll to

year Camping right a know, As was all for behind and of was you XXXX historic that. XXXX World

Our at rates path historical the leading but industry to explosive to pandemic, the grew during remember it's XXXX. important

reduction to see our a this people's new years in XX I'm and younger every for of or years, been new, For units into more over hotter. loved has With compared almost world's grow. the RVs a buyers years this grown have market, produced, continues customer prior our ease coming for to From going outdoors never when they XX new lighter, now, Look, the file sold. to concern perspective, and industry decade prospective industry single has since to continue the passion being and diligently I've flattening work lifestyle, a inception. been the RV-ers to innovative

'XX, we for importantly, and infrastructure, strengthen the weakness make that proud see of to foundation. our some a our an into April. record and improve of strategic to temporary it continue opportunity a We're pad, generated saw further as that revenue sees most as trend While opportunistic new report company our shift risk, launch strengthen first and areas quarter acquisitions

for quarter over by million. nearly year last sales $XXX the billion, total up $X.X were Our

when increase some business, in some service While from attributed a that revenue outdoor specifically core you year-over-year, we Sam QX an it eliminate that also of repair bolstered is our of to came and prices is increase rise true that RV also well business. It as of in used business categories the our XXXX. that by sale exited in was our of Good as

first adjusted incident quarter totaled our distribution centers. The expense. locations to opening and compared added EBITDA the with increased to our adjusted inception a of Costs ago, our $XXX EBITDA quarter million, $XXX for company. system, primary since rebalancing due the associated Our change million year new floor to our the was cyber to second-highest our plan

$XX profit for the combination up added from was million the a gross to locations the stemming year, the and quarter of additional over from last months. same-store previous on contribution, XX platform Our

up, metric pressure, that was but the variable in we is the under our or in on also namely was to as same either expenses. It come variable segments compensation. important it before-mentioned One approach is SG&A that cost focus we expenses, margin, our for Our those that maintain added revenue and structure. additional different attributable us heavily to stores we

For from supply and drove our and overall When we're the well we investor percentage our the will the up in bulk start XX% levels. constant rightsizing the But same were the costs our the questions adjustments for commonly historical supply the what last number And average. of are separation questions factors quarter that the now process, staff Those the current industry, that the the And products recognize Number items and make in the about the for of manufacturers our towables, incident. expenses affect business there industry? a resist chain up increase industry, result, these Included improvement. internal proud emerge. year. quarter, Let's have the the roughly cyber temptation one, adequately to what restocked. as our chain in is is we that are perspective, from overproduce? need are of the the feel From is this were expenses below which gross the XX%, the in pleased with were of a QX we to inventory are inventory on of impact the status the stabilization will greatest margins? How industry? what financial the which that

As same-store is a reminder, highest is right now, a of the start inventory key at on when selling the season its basis.

reduce. will the Over season, natural quarters, appropriately through next few selling the it

that We own process. to just-in-time are hopeful, and demand. that we for In on abundance matches manufacturers disciplined positioned case and forecasting happen, back with have our of to rely shift rigorous in an ordering production ourselves doesn't and strategically, retail caution, we

business, $X.X progress. see of on on stacked used additional of As revenue that RV have for we of the an used for growth to continued top used billion quarter our revenue the We decision million at have of the end the since in reported made churn, million that quarter We increase we essentially year. reached last a the $XXX reducing inventory. but over our used peak of to inventory $XXX

demand believe continue for alternative, so used great rate-increasing and We a to specifically consumers. provide options environment, a robust be to for that in it multiple can our see payment we

less and tight on we day note closely supply use than important of it's XXX basis, daily a values to run very days. we addition, that a monitor of In

it RV the the and existed has, that's our anybody to moving. XXXX happened The manufacturers little inventory credit of scarcity to during by work the anticipated, repaired than to for part, industry Turning a side. a most our itself. that done supply quicker perspective, keep From

see levels shelves production these hope that. are discipline maintain operating the new to stocking to now historical manufacturing we With We side but levels, restocked, now with a on similarly to as key the levels.

anticipate margins As we move we through continuing side. year, the the to the new on normalize balance of

However, to be pretty we expect consistent used averages, with are historical margins which good. more X-year

you it's to inflation, new that rising cetera, recognize the true the part that new macro it's Lastly, our of study it's RV more are business, rates, but sales, complex look for when company's interest easy a our revenue. confidence, pressure, RV we that. sales at than big us, et factors impact consumer When

collision the last installed grew base retail Based However, believe RV-ers base that installed over of areas years, which XX% over Good the we and years. the several other serve it's our in remember to the was by million also of our several X% the quarter-over-quarter, RV-ers. key which and X and installed business, on feeds recurring, data last business, grow business, in high-margin important predictable revenue. up over service, to steady RV parts The happened Sam used base our

new As The them. RV a different anticipate team, the it's management retracted common sales discussion changes model. sensitize what would for to is, the job our at our We look levels. and if like business have our business we adjust

then that revenue assumption business factor If that I the is our variability is you the this in of determining make results, the guide often only use. the

generated RV we reminder, revenue XXXX. in new billion As of a $X.X

that reduction elimination $X.XX could revenue attributable EBITDA related be SG&A would the to to approximately impact in gross $X.XX -- commission, factoring around of gross to After in would that we compensation which $X to primarily expected For we new RV every $X.XX of profit, expect is could that to company experience, profit the and $X.XX. revenue. of of $X our eliminate eliminate

lose This great all a this math cost We expected what result this would the The cases not lot. clear After path revenue. of does the you I results. deal. if, to variable a what questions, as their So a reduction acknowledging give and importance years, importantly, a is dollar. any most our and of include in learned importance and provide understand The we've that we results telling in every both structure, giving a and for to I is maximize all that hear our the you we reason nimble our SG&A to don't being of show that. doing XX market example make additional investors small of that modifications to own happens

confident that going also economy While after repurchase several be through solid. dividend disciplined we clear, do We're To our proud strategy. business stock improvement and that can't are business results the have the We're where delivered the forecast meaningful quarter committed our way. increases exactly growing dividends going, public know in a consistent we program. fundamentals since the core quarter are to in along we to is

X.X we million. During reduced last units shares, quarter, common outstanding million totaling units. have the total repurchased net In by $XX year, we our the million X.X

outstanding and Our units a interest. year held common both shares at XX.X just Class count million ago. share XX.X the by in That's from down A sits fully-exchanged million noncontrolling today

our those we trends revenue industry, for months our selling and factors core April we're and company, the your to into monitor are that head today, to in continue with pleased and our going consumers we through affect investment. As closely

commitment annualized we new new and signed As forecasted. be basis, believe those the less we maturity, that that than other profitability construction, Between under billion new first are of our revenue $X.X range meeting disciplined stores We we mature locations. and locations. year profitably. an we'll expect with in approximately part investment, the no grow the add of in added are locations with quarter, our that we'll On to XX of with X stores is continue operating acquisitions locations with consistent to to finish

that's Let maturity. an with me clarify, annualized basis on

we've the past. we in specific Lastly, great to on are two about fronts spoken making progress you that

RV our March season, of we higher, We're peer-to-peer over 'XX, experiencing dollars Xx First, to With month-over-month business. it's the new rental Good Sam rental and end as compared in significant processed of enter XXXX. through a the growth platform. platform

free in throughout on year. at up Our quarter, for of from XX% to growth platform scale the of now with the 'XX setting grown rental the end the the over of the remainder the the platform units have continued year end relationships

rvs.com digital customers Secondly, consumer currently company by states. we allow unit in. beta that of serve launch expects well home finance QX markets selection, the RV operate XXXX, end-to-end and including our to in to would the experience, This specific beyond experience end purchase delivery our

today. Our in a some be sell and company, and able fully-digital presence XX will states, we unlike new physical currently license companies, used to where other automotive both have

operating we operator the year. the physical the we states, Over laid I'll of XX for goal now contiguous the out next anticipate it back in over consistent a to location XX questions. XX last months, with turn

Operator

first your Craig Kennison of is with question Please Our ahead question. Instructions] [Operator Baird. from go

Craig Kennison

gross or new profit I unit, business. on wanted your to per GPU, about ask

had levels. higher that if we you wondering further think down in You at back pre-pandemic to hang or had look should on they is you mentioned coming to that what I'm basis a optimal a more inventory be level? can now consistent at if means GPUs with

Marcus Lemonis

and like ramps 'XX. are obviously, there Craig, going and as traditional believe return it 'XX be -- in that is the we margins Well, landscape curve, to to on in do that competitive margins is there experienced with not we to note short to pressures demand we are But the supply going term the up. important

when but to glut we to, marketplace. about margins that. caveat 'XX inventory want in and so to a But I if, return happen expect A And to manufacturers, don't 'XX I be talk there that now. of we retail everybody exceeds rate we We're pre-pandemic continue extract lesson. on to manufacturers want from the the lesson, 'XX inventory think with learned because to 'XX think we at clear. demand. the margins, learned right a their could the good and it was their all that have We we've conversations far pretty produce And but had everybody

decent that And so the very you pressure on saw but pretty results, in side. margins the our used we confident are some as can pleased and on side, have the quarter, seen by very with new first continue we

So we're comfortable.

our what we the just looking did the a fair both same. the make we benefits want do all that that pricing for sure race things And of a to industry with we We to share. us QX, to in forecasted a our by by continue bottom. We is creating dealers and have share fair not consistent one promotion, believe manufacturers internally. we're to we get all it bellwether that for healthy and are do, and And are getting

sure make creating to want the same. with manufacturers unnecessary the we on so along pressure we're And that doing not margins

Craig Kennison

of And months try then, the quarter, investment think What a heard in had XX believe, that you you last reduce up, that if true. used your I inventory? goal That's I you attainable? getting still approach curious that's that you some if RV RVs. market your could Or to $X I'm over very plan drove And horizon or billion you so. used that business follow Is like that change balance to helpful. say I to to then, as targeted just decision?

Marcus Lemonis

No.

appetite And capital want test try to increases is, have we about in but yield market be the we those want see think, any that to in capital, Much to And them. to when the models, where X not make did Craig, below importantly, to about we same that amount we to inventory quarter, and we're we we ran as that the as of want disciplined goals. keep time slight when make happens to more sales. make achieve for if we have that move ultimately, of have our can chase achieve than at days, believe prudent we highs, sure go deployed to -- the results, new what us times, what that we most to put I you're first revenue, to you margins to $XXX we works, that we to our going the want or table like of to the at slightly with looking we're on our very be the when sure recognizing want reducing balance. And because try And would our while million we to adjustments and tightly, we you find supply something, know, a so well. XXX margin less efficient if And it be at turns want we it. not days scared manage breaking goal we're model. want want we we in

continue XXXs. on to optimum deployed. to which If XXX capital we quarter, to that and get positive So in on results, or we we're it, in back number, did it see finesse so the results second that's call XXX, can we from to, it's to the XXXs the do XXX reduction a April, down slight based continue going we

Operator

your go ahead with Brett Our next from Andress of KeyBanc. is Please question. question

Brett Andress

and the but kind GPU, Following or we not and you on where we're you I quarter second a question. the new XXXX you returning understand maybe exited hear out, trying to us you today. on on levels, on little XXXX, how Craig's on help where quarter up maybe more vehicle could back think based to April? it are ended maybe where the into entered I half it could just the color get of play bit

Marcus Lemonis

let that. I'm Yes, to going Matt cover

Matthew Wagner

as As heading but made our in at that we giving some little the February, optimistic year, end us obviously not of into what change Heading results, frankly, material We'll this March, entered April, bit a And throughout using was XXXX by as we then change continue GPUs. just of and really of this want what at into seen of sort upon our certain we're sustain. of to from And as into we modify we necessary, last see time. this a to not based to seeing heading a we were those the online terms our change to with we By trends that much and there we're year. into And GPUs a much saw environment. continue there an garner possible. very we've and pricing pricing out took year year, of a logic. very adjustment, bit demand confident make we saw We in that out quarter. changes the opportunity little whatever market we're that actually

all, going As Marcus not have see short bottom terms. to don't race said, the major we're and at in fluctuations we a to

we're that supplies based little are make going attention, of to to a of and what do there's we the share always to see and to depending hate quarters. elapse coming that the our we over continue more inventory recognize fair current competitors to current that situation want quarters little and upon getting actually we our bit possibility down certain a to marketplace. What could as garner a those speculate GPUs I'd bit as upon manage is, demand, we like However, what of is? of then come course,

Marcus Lemonis

that into that be as entry-level to that to and in at in of to the on quarter we charge I first trends how goals, number. the Part that -- affordability, from we they quarter combine I'd present we attract one GPUs look the reported we second different point core the I lower the if that and add think we're X buyers the those first-time when approach and X.X the look point I sure like stabilize at our and our just wouldn't of to of is, thing I market, a together, look at on is, than surprised and making I taking anywhere those were the units. through attracting both market, continuing at business to we're leading payments terms look that

in we're we still ever as metric So call to is to into trying quarter. our new $XXX capture to sell that. $XXX, $XX,XXX was resist happened to look unit in one And thought trade I that it, We're percentages a at, to not bring the trying payment monthly first going arriving our what people ecosystem. interesting

Matthew Wagner

to in to trade Well, we going realize we in started point. percentages, trade teens we're going had reduction of normalized that those that where XXXX. back at levels percentages, to were we're We the that down back

that for quarters same into reached continuing we've sustainable of marketplace. XX% maintained point higher level of now more the returning this we've few past that However, back that trade-in buyer the to at coming see really rates, over while track and

Marcus Lemonis

had single a it's It note March. to we was unit, that, what expensive at continuing our focus bigger can't first-time see big the units trailer recall was. part We we of quarter, showing had, think That the that's at through level that to but up, is have the been unit. said, the to industry, us could being to had don't XXX RV that more audiences continue particular and And Coleman more our entry-level think I'm to what new XXB. of buyers when for to going as we And entry still sold in we for We one. it important attract still entry-level a space. is of that's big month month travel and and that the that we not balance came our that We the our I so buy don't biggest to a business. want good a an well consider not buy somebody indicator importantly, found actually us As think now only business. buyers, of that new XXX expense I year, the in of

Brett Andress

Got it.

questions have take a then, look, you know on And lately been payout on And go perfect step level? But EBITDA ratio. here to maybe the the the and Okay. back before dividend current Marcus, and has about dividend no think we've low how getting one I a macro. crystal more ball would

Marcus Lemonis

term and sustainable. all, the We modify that to scenarios our dividend ensure have have no in strategy we is our strategy plans sensitized near multiple at to

Operator

Please Next question of is go Inc. Daniel Stephens Imbro from ahead.

Unidentified Analyst

on do members, positive growth This do what negative Daniel. to is Noting think growth, that? is think is Club you Good what Joe going moving And driving for you the in forward? drive Sam

Marcus Lemonis

the with set Good apparel a our business, made Gander that were categories that pleased our lost particular RV that not crossover and that of and hunting file. and very between performance Sam decision actually up. year, didn't buyers we match note the to equipment, core their chase because we that buyer of a firearms, last QX particularly equipment We're Club. we behavior the exited to behaviors of And part of we fishing in when important exited It's the

pure us, and core we positively our And to we're In of more growth acquisitions ability stores names feel good done and it's add file, to file, a our our customer, some our of cleansing in our RV new for and that we've those that. new so to a with areas. seeing particularly

membership the we categories exited. with where that of understand, But out that's very all with the revenue and to associated And XXXX, side, we both so the consumers quarter cleanse through side and third happening. the we're of on revenue we have happy on those

Unidentified Analyst

helpful. super That's

levels. and by new noted inventory as inventory partially the remarks, in in historical vehicle a -- closer easing of was new supply It used chain, driven the you to the release, Just follow-up. and the new prepared

is what's then, you supply do step wondering, be temporary of And of a a easing of more that right driving structural in what chain? more expect kind that's Or Or of the direction? Just could normalized? the alleviation?

Matthew Wagner

maintaining, at able look largest the to still historic we disproportionate source levels, industry, a exclusive variety have given dealer, ability However, out in levels exclusive relationships we the you inventory as an with of When supply manufacturers create as a also products, light from relatively be field manufacturers, brands. actually know, our of to we're to

So past with that scarce years, plans. to worked saw of of all we adequately been make inventory, well inventory these care as put over of sure good they've manufacturers the in X.X the that the we to not the that supply heading into able without diligently were well work season. are certain We floor we feel needs core products and make our that take prepared, to we

inventory levels. levels of selling However, we that of back seasonally we were what inventory know those us. April we reducing adequately we the in moving any market that we the also We're certain don't supply then as the half see know covered, the heading into for able well and things just we're be we more natural prepared, that into than prepared prime are adjusting that we heading to to capture April. And And feel of are season, we're actually certain sell stocked. requires ended season -- of to season heading chain, like on excuse right see today, season, because sorry, we We but May, make happen I'm there's also always forward. me, in wanted the now, could the in

Marcus Lemonis

at even And texture Yes. on of there. that's a layer maybe

a on that is demand. have supply all always daily orders We on the are we in our when own in we threw a open forecasted base And those the system, what orders would we that we and into monitoring with breaks basis what wrench had historically, chain.

And we the them. go get lot that so in great anticipation into had going knew weren't system we a more percentage to orders a to of

reductions. and restocked in planned brought we normal have excess we for have season, reductions of some in inventory the shelves seasonal for those inventory As forward selling already

less. rightsized because look the that's June, you come so level when May, can And a and that amount supply comfortable But selling want June, we in into proven markets, in, to coming July with to could to and of presence parts other did expect to in we particularly more September, our the inventory get with the in inventory pieces Asia August. were at sell July, still having and going go COVID we're season, a chain new have from not we where that August, May, with disrupted that we've

And so over months, But plan clear, our slower inventory be we're inventory as take we we several some at inventory rate in very take it, we than would let's forward. it to a seasonally next brought as is the normally in we than selling adjust. more

through with going where expense. disciplines year up importance we years expense -- not more the recognize are made read of are much as money And at those associated it us that, to that people our that the of in and the inventory the and the because risk last lines, than go the have so however lot several of own give to at a at today make anybody's I'll through levels want we clear they're balance to we not going be our keeping inventory

Operator

Please question Swartz ahead. next The of go is Mike from Truist.

Mike Swartz

plays be that to some expected To start that year. maybe full I the around throughout last off, is us Marcus, slightly the with that I thoughts maybe comparable you outlook, -- 'XX had to guess, provide positive the for I maybe, sales how on you that give had the but And outlook? out regards call, year. think you the know said much didn't Is detail,

Marcus Lemonis

have. the quarter, the first issues it's -- Yes. our on were same-store market to XX%. had and flared the up When macroeconomic extent we had the environment, did deal have geopolitical a last call, rate-increasing When tough. not we for you as down look at really And not the issues sales that our new they we

I were at that's outperformed it, When market. our combined basis on at we then down we look XX%. slightly were the look how we think we overall is used, flat. a And relatively

that confident, confidence, lot that all information SG&A our down have service, our will further on business caveat of factors and including April We as our inflation, other new including expect based affect to to to parts confident feel last time. to I that after perform. we to we unrest, year-over-year? to call, to -- a feel types including some confident service, perform. itself more confident presented a and parts adjusted one internally that, We consumer very of those feel retracted other the the that is know but will I the We make, that other last saw think, have it trends selves. and I the We still own continue address we our modifications business But have continue that. macro again. continue clarify political Why used received And want questions in night. our

those will because Our sure, much fixed nicely. products, down and you firearms, repair to adjustments hunting, apparel. But one for and on pure base year-over-year, negative make What Hear fine. parts fishing our whatever the with changes from servicing broke see number, look of dealing with of a the But all-time business we for an and structures, the X% in compensation Good and service new at the to our our monthly things record Sam we performing the we we structures, then year, feel same-store number for record. the quarters. confident installed associated a the new our to performed other advertising is extract with have labor make for when months, was industry That's of And don't that we very us, will over. RV address deal elimination be daily, we this, weekly, that our basis. that, part the the will And the control of of hours we're Gander parts that pressure up actually side, to we we next that when structures as the the couple continue think that need on to sales. on sales whatever business,

Mike Swartz

expect to Marcus, open XX And for maturity just Okay. that maybe year, locations of the That's in new $X.X billion. -- rate the of helpful. mentioned then, this you about had think was new kind you the terms run I

to $XX about something in context backs around that a five that years, years? Maybe that give years, location. help into around think that? per us reached Just out? how little four Is think, I million right two plays that us maturity ramp

Marcus Lemonis

our Yes, question. at We look that's stores great today. a

you reach that months, I novo to as of takes about operating bit and does the million, XX we profitability On of our to that than but performance about a wanted XX stores From opened, to are because a doesn't an XX a acquisition it do see de cash from the for get happen traditional EBITDA new our level. that We from It operating things months. sensed a to happen. variety positive average in sometimes, $XX in that minute. flow cut we that opened standpoint, leverage, north XX take sometimes that, an EBITDA a past, little standpoint, stores shorter earlier think we and margin. store performance, oftentimes we make that forecasted a acquisitions we then little

into and in. Sometimes, they the and because our go they perform they our exceed very expectations systems well integrate system,

being average, can XX on retrack XX them that on a they within of that want we is our months capital stack for slightly our core do growth $X.X sometimes, But $XX regular that million and year assuming a see, at million And we businesses. if rate don't to billion, every system. between $X.X we from average, to months. $X.X to basis, $XX organic then in and way, what our that market deploy And so able on billion, other billion be deteriorate we should conditions get expect don't

Operator

Altobello question ahead. is Joe of go next from James. Please Raymond Our

Joe Altobello

back I on you Mike's go made to sales. question, same-store your want comment to question just I unit to guess first Marcus,

new QX. down, mentioned call You in it, XX% was

Marcus Lemonis

XX.

Joe Altobello

Was flat. year? We expect -- compares Yes you up. coming to and do continue is some what have that trends easier of the the balance for those

us some So in on maybe you color can you saw what give April.

April, those in the sound You with pleased little month? did but bit improve trends a

Marcus Lemonis

side, but on they new They used improve side. actually did on the did improve the not

for probably And that when that it when about we three numbers. two people's which temporarily either pivot. latter based opportunity And finding We GPUs missed buyers we that than so some on used through had to you pressure an haven't and as year on starts company that new of some keep on think proposition the here, talked And slightly fact and the strategy, it, doing see around as there part in preference why potentially continue We're pressure our everything multiply that the comping quickly. that marketplace, first-time mind, nicely, we the we're we'll macroeconomic in before, sense as met of big when volume, there, side units could our to around latter started the alternative, then in is better up business wrong the they anticipation we have our number of business performing pressure need what we part add we're XXX the we or behavior. very on lot our as can our service last units add these of Good in through of our operating value future stores, funnel all to will relied our and our a to back discussions But the out now the have by take on don't as of is part the we anticipate beneficiary But be we same-store that themselves to retail the that set that business, of make range. overall predictability, focused business. predictable Sam sales, segments, business erratic in easier around used do the then of business we used comp bright it and a it, RV same year, side, light wrong gives a sales of that the us If our our can half company side. SG&A we to as because staying another as be business, internal historically, the in the to as business set our of way, tentpole new go repair want but terms new we well. payment in light goal replace be last in because you're we adjustments with to we're performed the issues year

Joe Altobello

That it. is production. segue Okay. to OEM Got comment about second on your my being which disciplined question, as actually earlier

You at in QX digits up on it's When year. a the seem look there. we last double data, IA optimistic fairly record RV QX

two help data points, understand if So us maybe try square you will. or those to

Marcus Lemonis

all hesitate months. continue commenting rate the manufacturers both on what when into their manufacturers the business there any a RV scale purchasing and inventory they lead that's speculatively. in then both especially to We would I are because that the were strongly dealer manufacturer not yards. information those time, hesitate to as try and of and coming retail I purchased and times conceive always always in demand data, confident would seeing the we go by discounting as industry, in and in we learned where their speculate chain produce forecasting to their don't why individual even product just-in-time to have that with, retail IA January with to I they registration lead when to they from feed And the at product that try clear in that lead withdraw will own of we to prudent would level of side, we telling Matt raw little out trying yards, was see we cut run back cases, XX out in, factor we to those and had relationship complement that you and that rigorous for bringing also that settle hedging businesses, that and them production they in And what a lead February. the ones a of benefit collectively, But the breaks conversations to the data. each when parts a push to manufacturer, a no that in disciplined were it believe and for more lesson. I on unnecessary know don't do finished-goods these of manufacturers meet to ordering even think the just and match glut think back about pieces, to some all so those in the ordering supply ignoring the can last inventory. believe you're encourage And also they're had out business, managers approach can But some other do for the system We can. I costs. in materials, of on of we us that an get and frames, that the that I and raw times to bit, ordering ultimately want to that. at them ordering

said have going I ordering forecasting want to to. like And are the they're great, own if margins else's but I hopeful, not planned anybody are on going and not so our reiterate inventory we We our bank intake right and as inventory sizes and to of our but and our they if before, decisions, do, stabilize.

Operator

Ryan Our JPMorgan. is from ahead. next Brinkman question go Please of

Ryan Brinkman

that need there inventories around restock you XXXX, probably a supply, could recall year wholesale lean that to maybe demand but from middle remain inventory. a the think or where so after because with was also of I I that, a of the matching industry away period suggesting, be

today previously as a that total that you maybe made adequate, normalized does or would demand inventories say faster than And thought? supply think? about or being that So full the primarily indicate do What higher you of stocks was function comment both? lower you that

Marcus Lemonis

definitely all I things. think It have quicker than happened us of could two anticipated.

is just in to we two they healthy XX-something-thousand, that the that industry I it hotter ran hottest you it us, ever are it's all normal And trying they're the good of some normalcy everybody. had level get seen. for number in I dealers to broke, them, of not than and think dealers, a was I for at creates a December all because The think, their back supporters think the fairness function was look like all that and we normally January that manufacturers stocking And do. January level things. own than dealers to by November, business, of shipments

because of had demand. months of normalization none anticipated that had in even of and demand the be the to think one I running -- more and call and that I us advance hottest that hot that April have or could of a forecast slowdown industry. manufacturers this is be the first thing it still the and seeing in May, one everybody, in we're there months want in the because remind saw we've normalization quarter a would would we is I they ever years of 'XX

next season bit that going selling XX%, the and to sells continue great normalize you manufacture look as if they happened, we you retracting tens retail to two in and industry maybe it have dropping Because you registrations continue darn five still while a slow season. then expect little dealers to five, of So by good level a do down manufacturing you're and this, high August are do months if down don't Those rate, XX%, when like got that rate, mistake at you and into hot quickly or have I us smarter, high could to All by at Big good selling anticipated. a September. we're a a the we things buy into in units. the push inventory is pace four, pretty going so working have fourth that's of in that tens concern to the thousands XX%. six quicker I here Easy -- at the are retracting think quarter. tandem, to is industry continue the at bring manufacturing, your take to solution, months normalcy four, back slower than levels and probably inventory a

it think quicker. but I we'll happen did be fine,

Ryan Brinkman

Okay. manufacturing might very than And including likely association, expected. and in large upward other by the too. more And think, of reasons and generally dollar in the resulted I prices resulted RV course, material helpful. the higher for increasing demand speaking, whatever. did Great. used But RVs, think were have increased, new its that been the were just, raw depreciating and That's pressure on prices, than there aftermath supply other then margins or rose I costs, more RV prices prices, pandemic

be I potential And or modestly about been relatively expected if you supply see forward, do than to as move relatively curious, we decrease fall more modestly, have how than similar were margins might how the in or might we demand so think to for had about increased more you margin, just prices hard call, just to really outlook might think previously, curious, explicit this for you of cetera? management in context as et earlier? be that But as the the talking been which your not with increase inventory in about thinking expected how you're say. you've it's being

Marcus Lemonis

an if indication explicit, of explicit have to Well, in margins. that The Margins I over give 'XX be I haven't you QX about want down done been more results XXXX levels. they that. come have

in to there look expect accelerate stabilizes. inventory to make love margins in more and sure be as to our sales contraction We slightly, we we QX the of slowdown to demand, slightly deal that with

Here's what about. I feel pretty confident

to manufacturers the it us that and explicit for that's going to I clear that clear continue be as we what to general overproduce interest And next to and 'XX whether happen or long not feel believe return to rising needs pressure, think the As don't demand it's pressure. and the 'XX while for it's going feel margins. not see in months, rates is is enough, six may a consumer we manufacturers. demand, do will

interest a one, mind. that XXX the at rise Number lower-end to stock today, payment stock while segment clearly we're twofold. rate financing it terms is those that segments. And that materially, exist doesn't consumer's of months each we have is and that of to against in the blessed we hedge each XXX on Our the point price affect months from in

to have neighborhood, least the expensive sure the in have home expensive the in make position always to at neighborhood. most not that the want half. home ourselves We the we we So bottom

you that And started unless sure seen our from raise to never we or thing. from by customer on now, up XX price. why same and is the XX April, thing. know before the saying it we'll 'XX, which RV-ers, knew our used the perspective, that an decade. we certainty, a industry." isn't and did isn't XXXX we and alternative, I'm focus as the had materially. rising we installed we'll our of that really, with we've I if started in really years in new we our gives years now, strategy. that it And say, the hand part is we that is to XXXX and to by And the XXXX offensive and not in probably entry and base and the did the not business or contracts, it example, pre-owned what from not I the of going us went another to in that our The same did love did Our because the really When industry from our the today, almost company, accident started happen that's internally strategy retracted. Decade to their hedge was decade, market make and response supports pre-owned inventory, new saying than used business the trade very that lifestyle tighten that, of gives it give supports out up, happens the that In of and says, that the consumer when after it actually trade going industry. after public on every outdoors, day to smart single I'm happen happened to either regardless a by the small be market loud that it company, bulk want to accident decade started clear. day something to this Secondly, long-term for be "I grow exit not to want it previous more study to intelligent to our of they something that inside decade, consumers never up a alternative lifestyle. the cycle, got people we I'm thesis strategy that of when thesis our noise go into

if fluctuate I the anticipates is against saw that from Our fluctuation be, and they will to that again. But of that. time 'XX performance XXXX want would results anybody what to range I you the that financial time. may in say caution

from manufacturers, at and service, company, much different looking for XX%, used, on so and dealers, not parts billion the dropping XX% you're take prepared profit as remarks, $X.XX our you you're and things. sensitizing If math, delivering of gross if of the table, is showed cost like our all or profit comes your that because other can gross the And not from our from our hedge finance of revenue this business, based in it Good business, or $X well. gross other, revenue, of do our you those get $X profit, the industry other of from off the from XX% removed Sam we associated models

you profitability? for can do so And revenue, lose do internally, lose out. the demonstrate done so we've $X of that some, And is which lot able extrapolate why clearly. we're math a Yes, that and to it you of and you

to The we But and to benefit in is that a retraction company behave our we other is, thing people the in that up us our own our is allows retraction belt. miscalculate it demand think tighten how of do I that period. what company

out flow. factored the base other every at grow to we our our return we that company started started We've think at as open and understand have mature, it the Today, takes also the next we XX period, here, board locations. new to and them our and to to we necessity because factor dividends the of cost we back on XX cash plan investment, about acquisitions, started locations time and cash over into predictable If And years. look that a to cost you of the that flow. rate. shareholders, go we for our into to X.X the forecast Not new takes them, disproportionate we to it sit the

marketplace, them where on people about So at whatever we moments is with that putting caution this sensitivity in know doing they And we is would out to potentially perception, time models happen our other in the business understand first. everybody thinking looking we're what's going. and

Operator

of Bret ahead. Please is question Jordan Our from go next Jefferies.

Ethan Huntley

things Huntley in is Could pretty about of the any were base, maybe or you Ethan but color the greater the business? with trending you're on cadence Bret. some on of service cadence I installed you This seeing know positively just mentioned maybe that sort segment? the a talk for of trends

Marcus Lemonis

Yes.

meet I want and problem, the people of have they the I product furthermore that a heels know else our we enough would lifestyle and stay, a affordable they it, problem the but own that real, don't and call do, that stay, it's that when like I And at rate our company, who of it guess, industry stay, installed that they or has I so One base consumers Achilles' technicians our space, grows everything use is, in compared their the we have shouldn't use days out have industry. words we to more to don't demand. love there, to enough to because leave

that's us greater what we that Sam, the customers. recently own for and even or significant the didn't swallow from has us, deploy good on doorstep, to giving one they repair, of that is focus willing I'm positive for a A floors, about reconditioning, keep don't in pay can't real even our so service, the buy new service the new happen new of new renovation, the new to that another of creating sorry but the to is work, demand all customers Our probably it's is capital on awnings, they're seem our in name dealers in strength ourselves. Good customers and more confidence because started where work, customer our have collision, bottleneck sense, that sense warranty couches, new Camping tires, and show we that chunk a roofs, up other World things, And rambling it selling.

map with feet on XX,XXX we can square days a what's next several of with those days. stores and seeing driving than to demand retail we're allocation built compared more square and of to our even the years, building us -- footage is We're service of and that XX on. take at over square swallow. store will we feet XX because days days those the the part Historically, stores that we them amount And disproportionate XX retail new is look XX capital so the X,XXX as now put

about that a visit try see parts. manufacturers units What the the on thousands of investing takes if out the to learn the customer come departments a least concern get few for We're it health by the going we're unit those of thousands days production strategies of one to here excess continue to thousands service parts of number where anybody of more. of in or that our actually five waiting not term repair. the if to improve so and their So reduce at can and repair and some is, the in a has and into take we hopeful shop. and those, and of that about repair of importance the is even short We the industry to a need hedge for Unacceptable chance today. shop days, four

million month, one we month $XX the labor So this, don't report had our parts we excess unbelievable. service demand is the and We and but in first where service, one had quarter. was of in

up and right again. We it against crossed million we get April never before, $XX in have

know to be you when the and where we that is, our business. know where associated we so capital at particularly needs allocated, return margins And that with look

Ethan Huntley

helpful. very follow-up a That's then here. And as maybe just

forecast I bit about 'XX that's where still think shipments current do that the on that's for or the high RV XXX,XXX things shake little you think side? so. Or Do about is think you IA out? maybe is a --

Marcus Lemonis

We from know that. XX,XXX those that. very side again, that the sophisticated all to and in But At than Forest manufacturer teams finished Lippert on number better starting way River. Thor better XX,XXX Winnebago Patrick, respective smart the with at and supply and less XX,XXX hope manufacturers, to XX,XXX to up at dealing we're with management least, not. least than the We be think, that less we

we're they even us predicting are hope We putting smarter than those confident things just that into in are those people dealing practice. with models. We

Operator

Our question of last Gerrick is from Johnson Please BMO. go ahead.

Gerrick Johnson

Great.

say part I a you then mix answered disconnected for unit so versus Sorry, to I increase increase. B saw you that. was And ASPs, was price there, 'pass'. on I'm have that just the these, moment, the if curious proportion

Matthew Wagner

asking I'm ASPs? to were the just sorry, clarify, you about

Gerrick Johnson

units. And correct. That's

Matthew Wagner

density continued of increase an bit of this here start a this our And we from sequentially around quarter. quarter May a But to year to to sell April, towable little last time units. given see heavier in we've that mix timeframe, of

little don't to that start think average quarter-to-quarter. where that used sustainable material much we the on a that's for we see to a off bit is going continue as change to here the more. put next ASP emphasis level And You sale from than new on price of units, start a to quarter, unit, furthermore, lower which used relatively we see be

Marcus Lemonis

for thing One Yes. point. clarifying

to On okay? lower-priced macro in We to right? see On for more laid a down what's team want of camping the affordable people continue side, anybody environment, that make his we make in mix new to particularly side, than Matt units, the happening mandate sure he new that wants with the has to a else. light

the are bit On on a motorized new not that playing XX we different however, months heavy little the we're the used side, because last business. game in we've played

really business. in diesel the much In don't we play fact,

going of still motorized contributed gross are constraints gross on in our side, there necessarily motorized dollars used used And supply is but profit our We has business. business used the margin not because that profit we after the some are of playing business. that new what the to are

to good. the buy cheaper luxury day vehicle go outdoors can at affordable discretionary. to makes the when and a and so and want the continue you lot When tow primary one still is a cost But the people not life, do available just XX family. households the And two you not consumer $X at product of provide way, the gas. isn't this the take I the towables, far. to for look mostly make $XXX RV the market. a bifurcate at and other the and my we'll look addressable gas. I about theme another don't and And look incomes. the a I you're for to decision don't or that enjoy more all the does. funnel things, That's widening cost widening than feels vacations with used, it the parks, the gallon that doing we so max, take timing thought weekends, essentially, their miles more can those any way, as that means way to to financing airlines, that full you think believe two the you an a to of something you're But month, drive of ASPs of People have, market. camping, cost over month which is look And days cost color. $XXX the consumers, they the the new, down more entire the that in it traveling The ASP, the we hotels, of sell, working of camping people a And where at XX, on have that drive are they're can't go country. XX, they distance

alternative. offering, down rates and we So of if a we see we we're a But consumer providing ASP impediment, interest a drive credit tightening an potential as used have scratcher. good as head enough

ASP, So from we new think that's how about used. separately

Gerrick Johnson

XX% I and kind asking questions of XX% All sequential. was year-over-year, as usually we And thinking sell-side Matt, new ASP questions, used. in reference, year-over-year. But ask up year-over-year, in not But you're right. ask we're whenever the just for

So should bring there, down to I'm mix towable mix. ASPs you more your on your that so see shifting wondering

on it seeing you So Or together? basis, up XX% we it about XX% think what, a couple how versus... mix we year-over-year, mix, that is are bringing a should so are up, of ASPs put consolidated pricing down points.

Matthew Wagner

sequential that element of industry it because was year-over-year, board. has about the to up seen more compared far increases every that price across just brought given I Well, the relevant,

continued same to increases into XX% to that that start see some data, rough amount. with up seen you'll well suggestion these back range supplemental we've that the ASP, factors go other COGS price has in associated you of year-over-year, if assets the the average you're unit quarter-to-quarter, as that as of also new in that invoice same-store with So which versus the

much a quarters, the We couple were that we come quarter-to-quarter here the biggest up yes, increases past yield ASP from especially. year-over-year. like but well, feel transpired over greater that, to We now. or margin able see of So as GPU, changing has though, gross don't price

Gerrick Johnson

that cadence retail Matt, Okay. in February. Great. you the adjustments during And with I mentioned guess, quarter, the then invasion. coincides of

year-over-year? -- you through you downshift they And So in again things up off they pick did quarter? And starting see in back do did did February, how then, if transitioned how March? how the they

Matthew Wagner

as it bit actually a in into February, March, year-over-year. the sales well, a week bigger started a saw started March. decline, difference, relatively And May, Heading into to see good of current heading we little feel in heading was same, to been And it's about then, we around year-over-year. slowdown February very that volume then second, out year-over-year. a bit we a about compared terms we're the where actually into of about April, roughly time, third

whatever out So upon next our in will ensure position, our we'll based inventory modifications be this that there. good retail end will continue the here of sales are confident strategies exists monitor to that we're make And months. and sales transpire by three the demand volume very we to to capturing a over that levels or four the season,

Gerrick Johnson

Okay. since the here. the last, of Great. I'm in I'll more I there group for benefit And one throw think

last $XX double you that's million year's about per have that location from inventory, X.X. RV about Now

maybe you If for ASP, higher. adjusted XX%

bit big might still heavy? in. might peanut in all a if have like your Understanding, holes not butter, Where a spread you increase So where be you little inventory?

Marcus Lemonis

in was to I forward, it don't to know if if, was inventory strategic on color any that think to of are don't travel where some that in add believe want we perspective. Matt, my like entry-level from That's we bringing and heavier be, than terms that. our I but trailer we would have you the today we holes side.

Matthew Wagner

Yes, information. I right think are on you

to motorized be sold a But for still the about amount of there's units our only However, XX% also the know of within there account supplement of to inventory able capture annually. bit that for bit segment to market. a going we motorize some little more particular, opportunity the us total in of to of little

the So we mass covered the the feel and mass of retail volume. marketplace like production we've

Marcus Lemonis

And used helps fill that us void.

Matthew Wagner

Correct.

Gerrick Johnson

terms, what a but want we I as be Marcus to motorized in it probably dollars, keep about can talk profit of know to And later. gross Okay. would that percent

Marcus Lemonis

our to quarter on for you us much very this you thank look forward much. Thank results. joining you We on call. second so guys, Okay, back getting to

Operator

Thank that for conference. and today's Ladies gentlemen, joining concludes you us.

now disconnect lines. your You may

Camping World (CWH) 4 May 222022 Q1 Earnings call transcript