Camping World (CWH) 3 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Lindsey Christen	Executive Vice President & General Counsel
Marcus Lemonis	Chairman and Chief Executive Officer
Matthew Wagner	Executive Vice President
Joe Altobello	Raymond James
Daniel Imbro	Stephens, Inc.
Michael Swartz	Truist Securities
Noah Zatzkin	KeyBanc Capital Markets
Ryan Brinkman	JPMorgan
Tristan Thomas-Martin	BMO Capital Markets
Brandon Rolle	D. A. Davidson
John Healy	Northcoast Research

Call transcript

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Operator

Good morning, and welcome to Camping World Holdings Conference Call to discuss Financial Results for the First Quarter of Fiscal Year 2023. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Please be advised that 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; Matthew Wagner, Chief Operating Officer; Lindsey Christen, Executive Vice Present and General Counsel; Tom Curran, Chief Accounting Officer; and Brett Andress, Senior Vice President of Investor Relations.

call Lindsey the us to turn started. will over Christen to get I you. Thank

Lindsey Christen

good press the yesterday Thank company's everyone. Investor release you, morning, and in found A copy that XXXX the results can be a section first financial release website. was and issued on afternoon, Relations of press company's quarter the covering

our Act expenditures; remarks interest future dividend business conditions; and include the Private of anticipated on the within meaning may goals, and performance. this and Management's plans customer of market planned payments remarks Litigation goals call the of Reform our statements statements acquisitions inflation, These may impact and expected regarding industry contain forward-looking initiatives, trends; XXXX. Securities rates strategic and capital financial

those important forward-looking SEC. of indicated and Form to section obligation as of a result other including today, factors, from in our on statements our the our update materially as our file these differ we Any Risk no various by undertake XX-Q statements and them. only reports discussed represent may those in views Factors XX-K, results Form Actual with

website. first financial of to quarter, our most of included comparisons noted. are statements adjusted believe Please and share investors GAAP be against our XXXX that these the in we are measures EBITDA, release certain earnings operating to financial adjusted to first comparable on may performance. we unless be note made XXXX financial on our today's important such diluted, assess as referring which All non-GAAP measures per call, directly also quarter our earnings and non-GAAP will EBITDA the to otherwise Reconciliations results

Marcus. to I'll now call turn the over

Marcus Lemonis

earnings we're to provide quarter into XXXX for am joining Camping call state and World's the then call. of today I'll back of the to senior call, union, turn and operator on and thanks going us Good by results a provide morning, financial for remainder first and team XXXX for management I the highlight Lindsey, the the today's joined for quarter questions. insight

Sam business unit in new quarter meaningfully record We had we parts outperforming Good very board used this strong RV our the as sales category. across in service a segment, and posted vehicle a QX sales, with our used and

new were down more quarter, unit RV the For anticipated. sales than

new expected. However, better margins were than RV

Compared we million, new to originally reduced more yearend XXXX, our by inventory to we've to. $XXX the close million committed $XXX than materially

Additionally, XX% less beginning material XX% made to year Comparatively, in year, of today. gone we've progress as model from than exiting XXXXs. the of we've almost

location, of it significantly We XXXX to are historical compare to per down stocking when units you XXX XXXX RV average new $XXX units.

to expect RV will six new RV be particularly months. levels, continue new pressure continue margin next We to both believe four new, RV disciplined demand on around as the we to and extremely for stocking

never XX-plus challenges, its that macroeconomic like doing I've market favourable influx which has the is I've know dealership unusual the candidates, and find from and Today this the the of recent a days about What that been this, RV last years XX emergence acquisition environment the seen. I very likes most acquisition the intriguing but of of the is I opportunities. rapid of outcome

As miss will a we the management team, not opportunity.

my to to from $XX to months, five range locations in locations close an agreements are last acquired $XX These or potentially locations. acquire various in have to XX XX we've and the additional simple, stages four paid million In revenue acquire inventory recently, on that including two drop, multiples range and in real I'll to multiples time very seen we've by Historically, some each. are sell. and estate we've average, the million deals and those

highest we capital. returns with Based our acquisitions, volume here and how company's constantly allocation, capital our to of sit profitably, deployed grow best team, on we acquisitions today. solid a use combined balance we we the are as of capital management mandate As the have our on a with opportunistic believe

is those of making part higher scale, practices leveraging best more in our big and when process A monetizing margin our segments and categories. acquisitions, predictable

approach are track which segment, had $XXX delivers service to of million of used stable $XX Our Good our million company's RV to annualized in category, installed first our and differentiators. EBITDA Sam time, is the and large that high a for growth parts which on great base the our margins RV's ultimately

multiples Capitalizing even that why acquisitions parts, service, based on performance, Sam, more to a we Good basis we attractive. before for are compelled these F&I environment. this on in differentiators so is acquisitions are makes on we around our another and reason historical those make pro-forma which used, pay install acquisitions process The these

business, proud I'm how SG&A. almost in to structure, were we how against as reducing priorities landscape this $XXX this streamlining our very by and is exiting for three executed company controlling performing this current keys house Look, core inventory our a e-commerce quarter, at operations and centers all critical cost restructuring team year-to-date and million, distribution

RV summary a revenue to from by we recorded our billion of of financial soft Moving XX% sales. primarily quarter driven unit new first $X.X down year, last results,

million sales quarter $XX.X Our million year, revenue of and of an business for to most in XX% increase our gross XX,XXX and of units team last over sold predictable used and Good stable profit. XX,XXX RV compared the the had asset Sam, quarter. $XX.X

EBITDA the first for was million. adjusted Our $XX quarter

the with floor million balance $XX roughly our up broken million cash of quarter account, $XXX an $XXX in offset million plan We by additional sheet. of on cash cash of and the our ended

million inventory, flooring of We also and of $XXX about $XXX net inventory. parts used million of have RV

mortgage. without Lastly, we also have of estate about $XXX associated million real an

in around XXXX, XX management discipline months. for plan will intense off of know the we we pay inventory coming new the an that As remainder

sets coming used that the growing store and capitalizing our our years. significant in our stage believe pipeline increase XX% Our acquisition allocation business the can capital we count next We towards in the by for growth five years.

the turn now for I'll over call questions.

Operator

question, Joe. proceed your comes first The with from question James. Altobello instructions] Raymond [Operator from Joe Please

Joe Altobello

your your big question, get to I'd I view. morning. RV the picture guess comments given market good the Guys, love Marcus, new just first on

know, outpace in is you will XX,XXX expect that RVIA units, is wisdom, more. for neighborhood possibly you somewhere of forecast well? to the As this retail conventional this year that how I XXX,XXX out as units Is play roughly that by the around shipment year and or think the

Marcus Lemonis

so. think I

to macroeconomic that XXX factors down it has summer and could as you and we the to a the first thesis retail know. industry, data outpace XX,XXX, think since certain lot XXX, will whether But remembers everybody know, and of that a I And and do we manufacturers really together it's to solid we everybody a do the there's the go by driven and at risk number prepared to called XX,XXX the are As but the with believe and we shipment last were that pace inventory RVIA XXX,XXX XXX. of down between even that de-stock that call XXXX. else's position discrepancy north point is out of big we for braced current a very for or dealers what working that we're your know agree we don't so that healthy closer

Joe Altobello

cautious in, met acquisitions, maybe mid-January, in of last the were we was an and in clearly aggressive just terms XXXX capital first here, of to of when from the last, of helpful. Very at of think sort more half follow guess standpoint the you on I it of Tampa I for allocation. very terms kind in M&A up weeks industry a you've the few least lot become And

M&A; So maybe being conservative other move much more has else coming in little A, of a to than of to what on stance you valuations more aggressive? kind bit, more changed from

Marcus Lemonis

and company January anticipated, Well, softer market of inside we're we're still had and balance tone doesn't us very concern margins I The to how we're about conservative really the trying of the change. new our RV than inventory. managing proper destocking along that that really with a lot any capital is in

XXXX prices and ever that company that going inventory period, on cost the What performing e-commerce decisions about reduce in strategy business period, that we feel at and retail sell distribution I history to going have by at and things looking also influx every in XXXX at that which of again, been the was the that these we the of and executing it of did this additionally of opportunity, years whether that top $XXX single being making in including centers, venture to our is miss to acquisitions. every XX not After business and our inventory out changed have the that restructuring out shed and number single of and low we've and capital, we're all we're is opportunities, we lowering additionally M&A structures, quality as business better a all mind. reduced January, well them our that working them in of in, redeploy getting I our out new we tough in we're seen dollar every look of the knew and on means into how and million businesses, last quantity I've look to fresh do of acquisitions we we're unit, or that's right say the the the not as restructuring But them, of had to doing that the I take acquisitions never our gates. this, or where we're

when have summer. fall another to but XX it's remind and the in discussion, We've a think and when have we normally didn't level usually I everybody want from activity you somebody see of this us, already approximately May announced so far XX I other it's good

same and and confidence. buy look going their there's In summer, going dealers it's that Dealers have. buy confidence a multiples that just family we year historically able for lot some the to decided time their sensing have ever their than into of have we're into able property to spring, inventory, level of cases, and or exit not different to XX-XX the we're the that

of on we XX surprised team increase how and the other historically our this annual you're sensing dedicated difference over a a to an around community. in don't XX basis, we've rest integrating these is months could of human I We the didn't and next We know amongst wouldn't to really we one volume around that if do records think that be such many these but months. allocate populating specifically for type acquisitions them rapid capital the acquisitions, I us, around making venture. set reason

Operator

with Daniel from from comes question Imbro Daniel. next The proceed Stephens, Please question, Inc. your you. Thank

Daniel Imbro

in the success about Hey, on to you've talk stand Marcus, I XQ, some had evaluator here good morning, inventory. more as of guys. I and you guys to out I RV you buying almost with that RV it related investments there January procure in on the much Can buy and your introduced, and might paying inventory, back dictate business. you talk as about tool, more to you Obviously guess GPU used inventory control the the used on you inventory you're is think side the is? about this what other how that to and controlling sophisticated evaluation more want build use get quarter. here, using Congrats the that get talked tool GPU ultimately

Marcus Lemonis

when created of two reminder when very Matt, candid Matthew all couple he everybody, years. what's we it's ago, that as the we to to Yeah, happening populate, to to need us Wagner see was say, evaluator really measure against years on to to it hum. starting RV understand we're a We tool of news the things need a this to side going take really and how need data with work,

we done inventory more than in because In leaving not not. of taking that's had April, to people one great and more ever the It's with fact single to process are it I and a that the our month that used the they're with to ability procure month of customer industry our Historically, the testament think science lead. acquired a retention tool we model. job integrating in hadn't we importantly, ability a

their hand process. refined today this, values think the that want and dropping were to and do Even tool. historically our So I we raises we has not really well as as executed as inside says, after a are customer I team

it that expectation for to and head the ago of front. to is like our known sidebar. it it we the XX want we back continue As bring has Today a company year, be to use months what was our almost to half to the is

very aging a want are things looking One the that two a much inventory used time turns spending know the to we on. the and of There and is manage, know how because values disciplined have, we're that we really moves inventory have asset that how that to at lot around we we investors we with aging, times etcetera. many so it's approach how turning,

marketplace, know properly to the pricing the I that and close other separate second we the shop want that the think marketplace has to it's people the proprietary to essentially an used do It you're all asset process that we that to that more and and do pricing recondition our is thing from a asset we really of in attention it's because terms more we the the out in building assets are unique. use, easily. pay protection very as it refining around you in can't it,

been continue issues see RV should amount significant up human dealing price When capital use d that new then you discount that, do both a saw in do business, it customer day, buys. first dedicated RVs quarter. we growing lot we the manufacturers what same not RV, the but there's have used to will with to capital inflation between of of on the agnostic that of and time, a lean allocated that we at price company are margins the expect to driving that you the to our and around historically in a in supply control every the and a the that have chain single We they're new know trying of a we've the it

Daniel Imbro

one no, a Marcus. like, and taking Yeah, And more, thing follow to use of touched with service, that's Obviously sounds of much is I then it capital. helpful. wanted M&A there on up on is parts priority reconditioning. really you

priorities, relatives seen add about to where initiative guess, you bays fall Day and ago? you kind maybe your back ability with to capital initial does being in year what provided highly returns on locations your of to Analyst more think talking base and that use today ago you and terms years I I adding expectations have service service those a of capital. the a that creative a half the of and

Marcus Lemonis

an it's Yeah, I term. because sometimes want to overused clarify capital allocation

absolute Our core business is the cash our flow. first dollar of priority of free

our that which is Good is means only which our see one number and in priority, the growth not you the the why there, inventory, and but investing used Sam service business more the the team. growth core in technology, and why Our parts, and you're importantly there facilities, seeing investing investing in is our

collision half is back our instituted our XXXX, over million increases across The the strength of service differentiates from everybody service In what entire and parts wage we $XX platform. of and of stability business us else.

away anybody ever are from go. And That's going dollars to used, Good so that service from away please taken taken Sam, where away don't the dollars anything. be from think taken first to do

are dollars buyback, like to second The go and towards things debt stock reducing going acquisitions. making

Daniel Imbro

I appreciate of luck. the color. all Great. Best

Operator

Mike. next Thank your Truist comes from with The from Please Mike Securities. question you. question, Swartz proceed

Michael Swartz

we're investors on aggressive Hey, questions. talking M&A conversations the ask confused Hey strategy coming little good view yourself and now I year, what's think Joe's earlier wanted containment everyone. up some for come, of really are some based a M&A morning this down was on that. about year on and about a into to think Marcus, I And and the hatches follow in and we're the just mode, cash to flattening more with

us about what's but So a typical think all cash making, should acquire dealership, the maybe maybe I you on know maybe you investment give are that? different, we that they a when be how can sense

Marcus Lemonis

point. Well, let first me the address

we assets, cash our that And preservation and business ever QX company. to that go bleeding segments, are cash, not are sure is change return of we changed. in great us of inside that that's looking making the and going anything hasn't we inventory preservation units not to cash all if away have and all or mode and that it's of collection believe at all a in We our going executed our giving that's cash

what want tell opportunities, there's But as And the range single that XX experiencing that at up store. opportunities, $XX shareholders anticipate store for of a highest we acquisition specific those volume is now, to we're we're difficult because opportunities. size that the and what million we it'd make an acquisition you a building anticipate dollar million to our we're in multiples do cash of what and return. a we with didn't looking discount as cash, we're to sure location the didn't days that giving ago to be volume those a of they the quality to $XX from on And amount

to So with back prices is, historical not times in. it as was of based a values, we bookends nonsense on and you other things way two look we would performing but bunch performance imagine, the an those pay different the us financial of and acquisition, at would two for have not different four us adding historically that

at for inventory, look a land, buy buy inventory, it's, bit buy today, we of goodwill. give buy the cases in of some land, my In stores and what and don't buy over some my month little buy of we're me able goodwill When the they kind in flavor it's a my my cases to board. me and inventory, many my the range buy cases of we've my its little seen land and bit give all

But on these $X real amount million the average see rooftop. per is the in spending that back excluding money acquisition in that we're about per estate average on of transactions we napkin,

a rooftops onto hold XX we we'll We're be of less put the it, estate we'll that mortgage a would year, the of or our $X to but good it, a than going $XXX a holding just not million a use. estate, on napkin. on in side, to sale a On hold of $XX capital choose that do likely Hey, number if bad Is better to there's environment could around capital either this that do use helpful? we property to of in you, and use we're acquisitions million lease -- real a and I may is that it's real back XX back bunch to it. number say million so single because

Michael Swartz

Yeah, And us topic, appreciate yeah, maybe think new no, outlook. you that's very that. side, dower would vehicle give on the to I some another I just switching helpful. over pretty margin

and I bit a the think in first better were the you last than quarter time little like sounds it expected. we talked things maybe

about just think there's a that, that there dealers a I 'XX through still out know way maybe lot margins struggling probably some is to flattish it the we improve that we for we of progress year, of the worked just as should cadence do through overhang. of with think lot new You year model vehicle or to as year end? there that of a opportunity have are but through

Marcus Lemonis

left first between new the margin we his on how do that how stage $XXX transaction, model balance was team sit to the how feel of total from we sales The get our inventory 'XX. out exit vehicle being as Matt more system, a and today on really XX% did hell here 'XX a 'XX? than our organization in of managing year of I reported do million a the Wagner we product and gross being like of we And quarter going we the whole every profit job maximize do

back XXXX probably periods maybe 'XX that, to bit we we're with QX, to of importantly, believe, the of debate, the in internal do I in tick point still because 'XX. a it going ourselves previous fresh up think as stabilization of margin to was that you're four that fresh and than better some a half and would half months point another a couple more years margin see it's that down pre-pandemic quarter little and and experienced you're dealing a now rid we a more we six still to an The from and while

to couple for We're be the to most of margin going company the can really to opportunistic for X,XXX-ish thing and to the cleanest then focused that can more a cleaner head is knowing little our giving exiting could we and model setting important remaining months. XXXX us ourselves selling years, into we the in six on inventory going April, do stay think to everything hopefully have in for 'XX, months going is 'XX the of our still May, fall, we in 'XX are season, the the we're that the be four as up inventory June, XXXX. next last that because we softer in possibly left I performance restocking our the into July, do it's better

Operator

comes Thank you. your next Capital from proceed Please Markets. Noah question from The Zatzkin with KeyBanc question, Noah.

Noah Zatzkin

my question. taking thanks Hi, for

on is do and Just business? comes are in used the cannibalization dynamic the side, terms thinking about new that you the out just you moving the on strength down performance kind through In year? about somewhat of it of to to when view the related how think consumer, Thanks. the how outsized playing your trading

Marcus Lemonis

when our strength the It's value with on look they more at used at for and a them business of price rates higher used isn't think dealing better alternative. increased oriented, customers looking better prices down. I you're new, a more being trading as an and value interest

there's never is to the And get know out one The thing to hard sell reason is space. to people have that their lifestyle that rush work we the RV of how to to we exit willing prices we opportunity very people the because not been find would door that. this of industry the be And rapid be wanted absorbing If mind to and while used unfortunately would everywhere, the units would that we dropping to pace. unit. at may presented be a hasn't used about us, leave inventory

do make we phone, a customer to their convert us we want everything them sure so sale on to when them. what doing what may the of is that through transacting when we're your shoving sure I we're can work like ultimately with online trying and they with to a the engages to make or that Not we go think want camp, something to family is what's We're into process for and like, where budget? our you to your do them doing analysis not we're needs family. that

new, a it, but new come a supports they there's while month, to there that a when able more more to a comes to website of about at when $XX agnostic used, often So then month not they a on degree that for see looks to looking some they more used, that and stay we're for than a and salespeople you say a a our buy data new unit. customer could certain more they new, greater than our because for is can go may convert likelihood likely a into them that some are $XX a they a

after brand manage as of a leads, reconditioning the that instills they're getting sales Sam the difference the way than think to product. anything isn't us everybody and edge else encompass market, sale that's and else. when approach just a we the It's whole used warranties And the company more sell pricing in giving to ability online, experience and our over really a I roadside merchandising, our our experience, insurance against proper or XXX to it pictures, procurement, and procure or lot the properly. used Good recondition to confidence the that standards pricing reconditioning, degree

home Home replace just a would like Depot amplified be The used into mattresses, somebody new store to walk and process that dial buying and unit able buying they It up. can is retail and in they lived being new else things. at it install to and toilets, camping appliances, refrigerators, new look furniture, world when walking a new new essentially and continuing into a

like anybody they Sam, see assets well. of Good at conversion. our our they margins our utilize are existing would really retail business, of like business, ever remain difference Home builder where like service ability better real that's is anticipated If our was It's estate than that's a Depot more a making and the all why as or the to in business, home

Noah Zatzkin

one helpful? of there? more are the kind the of to Is and helpful. normalized kind Maybe when thinking forward, going about kind a there the good could $XXX related just baseline that'd be you number about that? How million think of any of you Very this thoughts pipeline, M&A just guardrails I any or squeeze if in kind EBITDA

Marcus Lemonis

days as we're making everybody to we're a Well, that these human based knows, conversion little acquisitions and tail to from today, anywhere have and integration, usually to days a to that state capital of close. the close take XXX XX bit on They them etcetera. licensing

So to close. when that deal we could today, at XXX announce days takes expect to XX days you least it a

M&A our two In key of which it were The of I you which you you had been, and run really ever highest P&L: and had million quickly. $XXX and been, cash today, look which $XXX want when the address mentioned number numbers the charges business our go a don't there history we pandemic, to back prior think at forecast, obviously business were to When the provide million, outside the XXXX was I we we is around exiting numbers. number our lowest gander the ever and a we had of think I we through

these goal can other that hard work And is a some low. previous maybe contribute a we get to mean acquisitions -- look those will these and acquisitions we of want average we as it, acquisitions to you impute margin, to EBITDA average, million mature, if into once you $XX And look of about Do not is it our there is low. at new previous said shot that on things what new the is high set by should modeling $XX forward, to we stores generate you, can revenue forecast, if to on I we $XX believe people a team's execute We're way management to that as we a our at management about as goal, our it? that. have going these all as be we million. basis between guidance, team's our our It not on and think I but the million think on

months. $XX XX mature So in what whether acquisition into expect it's million, to the XX to coming that's months to or contribute X% our business we X% a

Operator

proceed next Thank Please from comes question Brinkman with your JPMorgan. question, Ryan. you. The Ryan from

Ryan Brinkman

thanks taking RVs, on I What in from new or comes any tiers. for used are seeing my be when affordability monthly or market expect consumers credit if question. the for credit industry. loan example, I'm ask different Hi, for maybe trend recent might you it financing the curious turmoil in payments? banking to you wanted for and you to what trends And the in fallout APRs about telling the availability

Marcus Lemonis

We have rate and as are the sensitive. consumer same all we're consumers as we

there of traveling Disney the and and when shock RV it still affordability of family alternative like with and increase and most outdoors there a the space. rates and they that's see love but all new bit And the other associated the affordable for interest the camping the has been the it that to their travel sticker prices World your consumers financing, makes so and from cruises compared of leisure of are leisure out activities over in world, little you

be things And family. so maybe still that I go those want outside people very with want a their put be to little and to have of headwind, while bit clear

relationships. we we portfolio, around when having opposed of XX or the on as new the In terms circled ones around primary sensitivity it it, finance process narrowed we banks could have out down financing a is really around six started our big we a how sizable came And retail to we side to banks. our banks with relationship lenders with where seven XX interacted XXXX of in to crisis, XXXX,

move tightening. We've credit have flow, company seeing the credit with of experienced get around, kind score prickliness you as in of little as the average change same. people customer. We're same real get -- we're not to rates is still a but The We the any a bit bought. able seen

that them manage with through out making working delinquencies sure them our our of there, process. to helping the haven't them change we our retail banks, that and terms the on banking that any affect crisis side on we're if and business of management describe, and both working their there's any people we're with the real haven't seen use In we But any issues solve kind we're seen side. treasury

Ryan Brinkman

then of level primary helpful. the the too the lastly, lower and is you those customer the having be are are how you industry the just new that less of opportunities else? like more think to context sales more amongst opportunities, inventory or achieve of given dealers a much about financial geographic level it going it follow more you That's as in perhaps OEM And diversification before up have the a you sales influx you, are of the RV different or recent or obvious there great about trying and there, seems is comments could of on strategic Thanks. opportunities, driver then benefits acquisition rapid choosing beyond dealership a do many to or a particular just other set little be objectives those exposure such anything more may or transaction

Marcus Lemonis

into the by white a accretive have there, we're a and pouring whatever metal or to or be sure think company, can water is value of you add If segment it's very filter visual we acquiring our make this you're all about stringent to process value to strainer add going add a by just but financially, filling going by space being care value complimentary. to not taking of that

we that. a for than power don't many for a we look you power that categories cases, those say at used of multiple and thank look many, in that's of we're them when it's much necessarily not those lower for of a of Sam, but many, pro the that we the Good power In right deals many materially very multiple the see because paying forma excel get us. are when service locations our you There we business, on the to basis opportunity, that X, daily want

people it's we're more be know credible that We know do up them volume that to that pass properly and know deals that and we actually on the deals able the that a we're to with reason do we're we're and they going legacy the they multi-decade show check not any buyer. we is to integrating their going many business. of going They than to of that of business They employees respect take funny the going know we're care by a to built. have

Karen the right a think dealers lot been years isn't and reason of that business just I have from soft. here I and the ways exiting RV this. who in have now seen see this beginning are over because is new the We

with generation of the second have on in owners the last dynamics their or great, couple the You dealers, XX of just really keep my old that starting can capitalize are multi-generational that years years, consolidators to I year can't wealth. with for I experience said, family built that so my can up how consumers to third I've market, communicating have are dealers today, were sure today, seventies this today, generation, want interacting extract buying I generational XX and business value make some are wow, that family

ends to in people. it it somebody hands other ever. any reason of a opportunities is That's I the up get influx grow that's and legacy to sure going greater that and of the That this number respect make than my nurture want consolidator And one. we more built business

XX% leverage right close look a five you and In million management of in next have built would that by years years really at moment for we to equate as control on in business, the or of our seize revenue. business And the absorb have to at growing scale goal this and $X to million XX you leverage model we what absorb $XX look team, store base of that's that now. and when the SG&A our a and our want we can and a

Operator

The you. Markets. comes Please from question, Tristan from with Thank proceed Tristan. Thomas-Martin Capital BMO next question your

Tristan Thomas-Martin

of seeing what about talk quarter and retail you're the April? you trended Can over in how kind

Marcus Lemonis

Yeah, things got through were worse the quarter. progressively

was of but a month, was noise all tough the a be, month. it banking whatever in it in tough the was XX% down was whether excess or weather XX%, March fact, In March may or month. of of a were it and very a spectacular it combination oddly used in We new month

we things we saw As marginally into April, improve. got

a in to in improvement but a April where little were the have win. take we five the sales Saturdays, not store down of careful the were better, overly little were a And 'XX, because to in excited be we'll same there over we month analysis that earlier, was weather XX% get our March. think I was from Easter

comps look you same a the because go now we experience June at so we and on and the anybody start back. pat off and sales we if As themselves as easier XXXX, cliff into about May, better store right head to clearly don't slightly the July, back results, get want to numbers started to fall

make grinding that here. want We are I to on manufacturers one tight point the but hope everybody, I discipline, still including inventory

pressure of a number There's stores, on business to little. destocking of we warriors visiting yourself concerned in on I'll of locations per now there's the internally I being prudent with when previous about from And away sensible their between the I'm the at XXX while fine be starting and at and that a of business get this lot a and we're we And balance out between putting new and have XXX, be based the that excited look units months. seize having to location cusp and our on line have and walking opportunity field right practical XX and business. may and too acquisitions, grow ability taking honest their you, making with

opportunity not are going away. We let go to that

and our move leads So as organization the May, selling product so that still to and April, June we of 'XX, in we're through into on fresh while want we as our can do sales we getting bringing go and rid season. July, repopulate focused transactions customers start

market destocking us drops everybody's excited XXX, and destocking everybody's expect It's dropped drop and in about about We to we excited drop so excited I XXX. another fine by a would We the and about by everybody's inventory. don't line told very by XXX.

ended new set next the number quarter of the or we're selling it may the XXX our because in at units their if So quarter everybody season. that location the at of XXX, right, XXX end expectations middle should per

get start preparation plan in back back we again for to rise of when in our back December, normal November, in and the to destocking historical get We'll winter, get to game we'll fall then to we 'XX.

a in little and seizing opportunity, be on inventory. bit to then So of retrenching again then exiting, you're here, rollercoaster a going

Tristan Thomas-Martin

Okay.

So, XXX out mind, think just you called In your I you you low? the based shipments that's said? Kind for for too do of the industry think what year. on

Marcus Lemonis

I addition Well, are us. that's think going to where drive it in to other dealers

a its And dealers But goes the bag that outperforming we this about industry of the have. are other pacesetter company and number We be by as in concerned we want holding have we about don't to concerned where health while volume. one a XXXX's industry. amount, the the we're the to terms overall of the only material of that are be of

of them floor having are are not either ship partners with manufacturing or of we get their their a being to sizable to based that. helping to other have willing faced manufacturing who do and manufacturers do But Our risk plan good curtailments them job their need again exposure. on dealers on 'XX pulled at

mitigate. Winnebago our there here start that order increase to over expect our Forest the key balance help So that will our this with should and company, and Thor, have would there's increase positions backlog relates it to we as actually like River their coming to I manufacturers months.

Operator

next question The you. A. question. from Brandon, your Rolle Davidson. Please D. from Thank comes Brandon proceed with

Brandon Rolle

overhanging and still right year overhanging that model, inventory market about Good just model, model activity may more morning. how 'XX my some potentially with, dealers promotional your some 'XX some aggressive model for still year in like Thank and [audio sales. talking gap] were you the now 'XX you your taking with, for looming impact

Marcus Lemonis

that think affect to don't the 'XX. overhang going really are I of 'XX

and to 'XX certain with were to we the knew because inventory about $X,XXX working that us we going I have dealers think enhancements believe million, they selling the were of had didn't at units million, dealers million, Other first to losses give million, acquiring have $XX curtailments that sell support. faced need. had we that $X,XXX We been $XX,XXX $X,XXX the in being they capital quarter strategic but are very no margin choice

but the less year probably continue it model we gap next that 'XX expect into as we be in The I we years model that's to of just are 'XX 'XX. for to year pressure to expect us terms four going shortest and to that in we've since because here and 'XX. to months, we And be 'XX here of lot model 'XX exit the are overhang of impactful work a the I probably on seen had coming because next six of volume four five months. order didn't 'XX

up normal let's 'XX. a course 'XX and let's very let's set have on of prepared 'XX, out get we a focused business possibly as the of solid on as can on for get ourselves really soon I'm So 'XX,

Brandon Rolle

be just maybe the year. up were in to 'XX And thinking follow in market this so now, summer. to 'XX earlier fall guess Great. some this the planning this Like people on maybe I you're versus

Marcus Lemonis

there's already Well there. some out

Some manufacturer particularly been. we And have out side are historically every grateful the late they in to a who manufacturers single here little than motorized the respect the that even 'XX mid-July. fact linger longer on will producing had 'XX manufacturers maybe push are made to started July, to that start and there decision and

the I years about think one can dealers. after everybody we're work industry very that in that together of not and evolution the grow thing this think being thing pain, is Historically, it XX shape. anymore. collaboration realize the their of cottage for continues industry proud doing grow, dealers between much I I in own if am popularity, then was be industry to and to to the a there two that and camps manufacturers realized to just manufacturers This continues and they were better in that the going eliminate

start everybody full were of will but that they've the fall this half because was to margins in that in bad started off disciplined. I see the and it to as investor winter QX in year at the if of and an back been is production much as the late manufacturers cut of early very anticipated reason dividends how I I been summer, I not peril, in believe And 'XX. manufacturers think discipline the of 'XX those manufacturer. they've year very their That's see a 'XX. disciplined

Operator

your from Alice. question next Baird. Ellis comes The you. proceed question, [ph] with from Clint Please Thank

Unidentified Analyst

allocation. morning. capital to want double just on Yeah, back thanks. I Good

How dividend prioritizing that? see? I specifically priorities, missed in opportunity the in you but the the those this significant think of if it, about that do you you are of context face Sorry how consolidation

Marcus Lemonis

to that look balancing it. think day, Are and single are stock acquisitions? very those a paying influx we right? coming, back? we can as all every de-leveraging? how Are be we're it's in acquisitions a Yeah, our we about we going Are we we And things buying exist, coming, act, capital of dividend? about we thoughtful but spend Are making at universes to most the have

down We this that sitting and every goes to down have our team our but that day and any doing dividend, sitting modifications smart no management by, plan we with board to single about to be with at make our analysis. have time

many I the supercharge at for prices in more in think too sure an cycle we this to know early going where don't it's we make to could these coming acquisitions growth to that how come because are be agent acquisitions analyze it in that at months. for this company unbelievable moment, but and determination know we continue the us, are we'll

Unidentified Analyst

Okay, but maybe more on below here. side did strong think drop time digging really bit in just per I still the the unit while a And thanks for Marcus. X,XXX a then things, little F&I in little model of first your

trends that have market forward new where of to attachment current the used kind maybe macro does of related that I and the about metric impact and trends, the of think Given versus F&I? the kind potential mix guess a should going conditions, the of of on in that, how significant we

Marcus Lemonis

little first and monetize address the see and of the customer, transaction, risk working and bit, in foremost and there let the based what going probably but has in what single first, single right. for ability is with is every When that interest feed so putting you the them payment so rates database day balance your does, a transaction, you in year. me family you're selling saw Well, some and to making it to QX dealership rising is that transaction you're the sensitivity securing a and on your our money

new on better do on think the shift perform we F&I use, I in than tend and to a we to new little used.

sort the technology of out working tell us see figured but We that if haven't hard science that really some can is. why really we're behind AI it, to there's

the transaction. better end on gross margin the profit want you the together, end taking used when transaction the and them don't much strategy total F&I the outweighs look per to and our new use and at put we front so new still you But because front is abandon clearly the

extrapolate take just your and there there to I But to out a a but X% to the bit I could Yes, same. return a softness a question, that would Could downside? look range. upside QX be be the within also the summarize would at little more

at around and current look a result it. band I'd built So the very tight

Unidentified Analyst

makes for sense. Great. me. Thanks. That's That all

Operator

Thank your proceed question. you. comes with from The Please Jordan Bret from question next Jefferies.

UnidentifiedAnalyst

still Brett. the How going into the Thanks things are there here? to Patrick for outpaced and on seeing is [ph] balance taking starting Are start out our trended Hey guys, or to service demand for QX this demand and, you capacity is labor year questions side?

Marcus Lemonis

be a ever. building job technician done you, more honest stable our stronger have our count at we a Well, of be than to and to and building service with operations heck

We them service one are we're numbers in the down putting very is those numbers up quarter seeing numbers. service strength was There the proud and the two of why in we're reasons driver. big were the first and of

$X I think about on a down were we million basis. year-over-year

business you were million our the business. the actually almost extract when a it the to parts shipping manufacturers. is service And and alone the service was furniture category other to business business up. furniture so furniture supplies our in One in equation, had of shut that off and out that when We QX, inputs significant manufacturers impact manufacturers in our business of $XX down the furniture to that

new able year year. put us new the is the being arriving that to first with were piece our pressure last dealerships than less quarter down on significantly other by overcome were of there bringing units in The $XXX inventory in we of and there quarter were at but us, our shipments million, this down first

When that We and pre-delivery less the we and with less that comes generating a warranty We every revenue -- a we're with the in inspection. that. every store, come revenue we do We had transaction unit unit do called to what's units had our adjustments, go through arrives in. unit. from

and up reconditioning, that to ground going on Our etcetera. their repair all service of finding sources; pay is made customers renovation, one from which team customer and units, two primary revenue, do maintenance out

to them, and business up alliance used of it well. put that's our as continue we as share was second reconditioning The grow making into

going plus to business margins. continue it's has that technology capital, service stronger, we're A has financial technician allocate and count XX%-XX% been business got our our because So never never stronger. to human that's part and of been capital to a

UnidentifiedAnalyst

could bit start and web Great. about or That's helpful. or shifts traffic as notable you're a then foot to changes any over you Thank more or, Any year you. seeing also maybe year And little out? as there? there far to talk regions what call

Marcus Lemonis

significant at some look We to of elected Yeah, a foot a money than would've traffic SG&A, activity. was to And think softer trying and throw manage little came some for just it still we the We're QX. a where made that's you structure in quarter, at for and us. big eliminated to thing liked, met wall not We bunch SG&A create we if to in few SG&A businesses. the we have our cost improvement expectations. changes a our

continues traffic traffic web to web standpoint, strong. be a From

to concerned web Hey, was new little have our little prices trigger. conversion I'm Hey, interested. However, interested sale really the a the about driven off to I'm little. a consumers by higher. off was little the that think And on payment's primarily traffic Boy, interested environment. really a but this I'm space, pull taking we really up longer the side Hey, in gone that bit. macro a I'm

for lot of to we're of just our our I'm a as So there's I'm always proud traffic, web harder It's performance, having not But, improvement. to work convert. but proud room easy.

Marcus Lemonis

Great. guys. Thanks That's for us. all

Operator

proceed Thank Research. John. you. your Northcoast Please The next question comes question from John Healy from with

John Healy

about you. notes positive question fair. things. hopefully acquisitions a number I'm call to than active looking kind heard Thank a ever. at big going seeing Marcus, picture ask I just of wanted it you're we've you just today, and I think be my and here think When find and of to this you're more

You're over the talking margin next to couple quarters. stabilizing maybe

You're manufacturers you more product. that telling the maybe need

at tunnel to it state the kind where is the to end and phrase of I say we've union point bottom you inflection to kind the we're light get at your maybe just of Is your how or hit that we've turning. or of seeing earlier wanted an respond of that would thoughts safe the that. are mood on your

Marcus Lemonis

the to grow once higher don't seize. opportunity around us I discipline, seriousness CapEx, that you, have reason allocation, have moments been ever My to tell around to really inventory, lifetime higher. it's has the capital around those in one for have is company. of around been I And think a to never the we

going What these business know a plan. XXXX from company the is XX XXXX is as of and gone cycles all history all me we to we and execute XXXX And and XXXX the all do gyrations that best. you're its things, hearing and what year and through around we've on

We are company business. service dealership that our knack Good the base through RV real an capitalizing for has on parts and installed Sam

in me may moment we footprint confidence. light other time voice you I to that tunnel sound the that next done in the I've confidently hear the stores. is the a such five want you're can with in never XX% grow found that I little store our the end it say hearing and ability years acquire excitement by to about piece think of from a that my at like our where

always always integrate growth to and the to Historically, associated them. make ability capital to our that. acquisition made ability the and was them human acquisitions decision management the a and team do specifically allocate to the process in human SG&A were process nervous And to process, as capital integration the tempered we our we with with

company was see the right when to on to our reality returning grow it holders because we chance long-term It they me these looking than do a at of now. to a us opportunity you is, come make from and do big reality better it and investors, the us. paper that expect what was capital our nervous we're And piece acquisitions, expect at and of that that to in they is look go. don't shareholders of That's to actually acquisitions profitably. But company,

got why is to to to to honed we be have care an stores have so new we a why existing And is really sane take business business have we in. which and to run, which remember that our grow, we of

sensing in also we've free fall XX been sort almost probably that this months You now. for of

for the don't first you store industry sales look inning. in we're If same ninth and company but in go manufacturers, from the shipments our the we're I not at and and back inning, for the believe

on, see I we're our I metrics gained putting us I'm out in and the executing structure I And team. what our can anytime the see confidence and and critical of to I ballgame middle hitting some market clarity I and them, to very the can hit and see in can capital then have us specific

and me That's years Karen I ago probably this than almost more when literally business we what XX have you're year today hearing is to XX,XXX is from XX anything, today, better from mindset. people a surrounded Karen with different that and and started than are brighter That's our what sensing We've it's imagined. people I people ourselves and and could you're anniversary, have smarter ever us.

Operator

remarks. call are closing turn Marcus to no like There Lemonis at you. sir. I'd Thank back you this you, time. questions a for Thank further

Marcus Lemonis

call. in for much very you this Thank participating

the excited continue study additional the company on announce to months XX company the you for and you much. excited bright build to improve As we've we the of before meet XX last next we're a experienced trends so number company future. over days that hopefully the Thank a to acquisitions. again, for the We're big

Operator

Thank you very much for you joining does very us. conference. much sir. That Thank conclude today's

line. You may disconnect now your

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