Camping World (CWH) 2 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Lindsey Christen	executive
Marcus Lemonis	executive
Matt Wagner	executive
Joseph Altobello	analyst
Tristan Thomas-Martin	analyst
Noah Zatzkin	analyst
Brandon Rollé	analyst
Craig Kennison	analyst
Daniel Imbro	analyst
Sean Wagner	analyst
Patrick Buckley	analyst

Call transcript

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Operator

Good morning, and welcome to Camping World Holdings' Conference Call to discuss financial results for the third quarter of fiscal year 2023. [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.

Joining on 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, Chief Administrative and Legal Officer; Tom Kirn, Chief Accounting Officer; Will Colling, Executive Vice President, Good Sam; and Brett Andress, Senior Vice President, Investor Relations. I will turn the call over to Ms. Christen to get us started.

Lindsey Christen

morning, good and you, everyone. Thank found covering A website. financial that third Relations be XXXX company's was press press on issued company's can of release results copy yesterday quarter a Investor the afternoon, the the in release section and on may contain Securities of Private within meaning forward-looking this call remarks Reform Act statements Litigation the of Management's the XXXX. interest conditions, expectations, our industry and These pipeline goals, the impact future remarks and and expected may dividend market business capital anticipated include plans rates of and plans allocation inflation, statements acquisition financial trends, inventory and regarding payments customer performance. and results our various indicated by important Form reports on XX-Qs Actual in the the these of those from including section result in and discussed other a differ may with factors, Risk file materially XX-K, remarks SEC. Form those Factors as our statements we and Any of views them. undertake no our forward-looking as to update only today, represent obligation

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

Marcus Lemonis

profitable Lindsey World's Chief period But last on Wagner, today growth senior Operating I'm thanks Administrative Earnings most Camping today's joined our the Good call was the Officer; is Officer. The World's by fastest World's room had participating Camping experienced. company for Christen, team. morning, XXXX Call. for and Camping our us of management members ever Quarter and XX and in joining months Chief Matthew Third

we while over performs over we of $X.X also year, EBITDA. in business billion last business, recognize Early help canceled of we strong we slowdown to shift further used we industry of profit. the revenue Look, stand business consistently and gross cyclicality our new boldly towards and accelerated time. adjusted forecasted the coming. $XXX period, that the generated bolster over our During the how We RV million saw orders recognizing immediately

X,XXX significant XXXXs year this Today, track XXXX remain start we company the the core year-over-year. units a with our segments 'XXs, less, on and model steadfast To model those elimination Today, our improvement this end in less we coming XX,XXX strategy. December, year model around we're must new also over in than XX% than year year more have And of year the arriving, in cost is are had sitting with model and XX,XXX than by out, we're less XXX. in quickly new be to stock. of

likely quarter, rigorous to negative. breakeven and our of management, activity execution margins. Higher quarter, industry's of to will generate to the result management-mandated This a performers, ] comes however, EBITDA with top at cost: higher marketing in neighborhood inventory the front-end our stability of [ in costs slightly fourth an historically, compressed The digital maintain strategy toughest the short-term wages

that, absolutely feels, in necessary. team investment Our our is

XXXX. our this up inventory share approach in earnings believe and market prudent growth managing We to sets us for

active with will outpace manufacturers increase to the the plan. floor the to materially this our set inventory months. buyer We next want Sam's environment. management want unprecedented us We strong want around plan build lastly, alliances to proper team, bolster to our up our market to adamant us. continue XX want file for and that return We forecasting acquisition we We share. to them maximize And competitors levels higher build gain and interest for a As our turns and the are strategy growth. this we want capital to of of velocity Good working supercharged continue in to

It Speaking the be to warranties time million of records Good history first it overall assistance its in the product, insurance. our Sam, our company's $XXX that high-margin driven categories. in business, exceeds it recurring vehicle will roadside by in revenue set contribution and business, extended many

that leader, renegotiating last the Sam and program products outstanding the of undervalued an programs are agreements Will feel operation, Our both the with loyalty to and years the underappreciated launching our company. Colling, partners. over and consistency and its first has job done company's X We streamlining strongly for contribution Good

on company's most about I think of strength our order growth to land the In expect, we train achieve team. particular, When the to continue greatest I company in promote for and leaders. achievements, our X build, must I our tenure and our

exciting you that a bench it's will built of part assignment forward, my more from ideas, hearing and Going is and several new innovative most fresh be them decades. here. Truth of told, perspectives be the for

the to our Wagner, particular, the our team. Operating And the to a call him little in on hand over He before Matt with as well the has Matthew Matt, cover business. instrumental know future you Chief XXXX. financial since been has last X X years our as of members more began as Most of of Matthew? most And and Officer. call I not company intern, the to proud to been could color turn the the I for perspective be his of results over over an

Matt Wagner

Marcus. you, Thank

an the used units, Within increase over quarter. for XX,XXX XX,XXX a we year-over-year, including units, record quarter, third the sold

while of we on to substantially procurement and used adjusting to by our Our are we sales ourselves focused positioning market business units in our of the market remarketing believe team that share absolutely efforts, we used continues share crushed it. are our XXXX. grow new growing And The business thrive.

units. couple 'XX we and price into response reminder, was increases back. model hard year the years As to used the direct a pivoted This new a a business of 'XX significant of

our we down. and both that is price informed time, that demand changes, manufacturing influenced consumer up RV by partners During highly

that we key volume months, to River few with extensively Forest our sales a greater last while points price segments will Winnebago yield margins. the partners worked have new healthy as manufacturing and such Thor, maintaining Over RV identify of and

Three to months see the sales. At the trend time, saw that in affordability curve same-store year-over-year started we that improvement to the an informed we ago, of we line market beginning bend.

lending further in we we established XXXX. quarter, that stage the greater setting As quarter, be of of refining our and our impact to push market favorable the focused the we inventory, curve Throughout into overall these grow our modifications. the used share fourth price procurement will on evidence

profit billion, last and most year, of profit. negotiations driven revenue decline business as third gross by Sam, and from quarter that revenue for improved the of and roadside a A unit, X% million we with performance lower from third recorded of in Our predictable for business. $X.X lower million the is the with record unit importantly, believe quarter record primarily volume, our stable follows: Good new is $XX successful what portion growth vendors ASPs. We of revenue gross posted resulted $XX and assistance our more

adjusted was Total $XX million. the quarter EBITDA for

on income on some plan the of able through $XXX million ended we recognition of quarter, offset vehicle of broken additional million profit on through additionally, balance cash with by $XX for finance our quarter improved that up offset the million and cash, of compressed the sales cash $XXX roughly product While the performance finance sheet. cancellations. gross we to of were floor We in experienced margins

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

of Finally, without an associated mortgage. million we own estate real about $XXX

XXXX, to our and and over legal Christen, been the call Lindsey President, real Officer. group, our Moody. turn M&A I'd under Today, legal on like efforts, started Lindsey oversees estate to organization, the our has Lindsey Chief company Administrative capital training our team human department. since our Lindsey? process our our entire Brent with

Lindsey Christen

that that forward-looking number be smaller been the Thanks, last as workforce. our when SG&A We're in acquisitions, of a well months leaner manufacturer-exclusive for would and our operations XX which at Matt. We've options reviewing over planned footprints. locations planning we adamant as our impact have thoughtful

current climate run more a We reduction. gross we view existing in of the stores with realistic of the profit economic also can impact believe profitably our

As people, million by quarter reduce the rightsized in a our and resulting workforce, difficult made to end of SG&A savings. result, X,XXX plans, in of headcount at annual $XX about X% the decision pay we over around variable the third

We will continue our growth. to balance and workforce investment in

to in employee continue invest aim training, experience wages our will and best-in-class have benefits. and for We and

to locations We will that have close haven't and expected. continue as performed

During X quarter, third a center. locations closed and the distribution retail we

X that be to will the underperforming fourth locations were We identified and up quarter. closed also in

the these obligations We estate or through a locations real plan terminations. corresponding sales, to closed have sublease eliminate lease for

been also on a We've acquisition path. robust

week. last add to including added we locations pipeline, Over the announced chain continue past we've a XX year, to XX-store our and

of some of very year pipeline process, XXX-plus overall less While the potential with deals remains locations. calendar to than out the XXXX hope active. in, fall we Marcus? All during deals no end our diligence the influx

Marcus Lemonis

to management willingness execute action and company and makes effective. and mobilize decisive The our is team to what nimble, quickly unique, take decisive our

revenue having months Sam total for unit next will challenge that continue in generated we billion positive will same-store line. $X.X for It over company be improve XX the that last EBITDA, XXXX, the expectation and is sales in up XX. to Good With adjusted top the are our and

expectation gross elimination to margins positive. Additionally, will to approach disciplined we gross in be is reductions our SG&A company of expect percentage to a operator improve growth, store assets, the as in our of expenses, result flat by could in it slightly lead items, underperforming the our overall With no an now of to inventory, managing XXXX. coupled in Q&A. count XX% earnings I'll less over with to turn than X%. our call excess These increase

Operator

is of first Instructions] [Operator you. The Altobello Thank have Raymond Joe James. from we question

Joseph Altobello

pricing in is How low-doubles. high-singles how growth even modular aware, few Or mentioned from to be mid- we to 'XXs order the could and towable next maybe think need thinking you indication you're are a see do decline that that? drive well demand So down see over you in elasticity you that steeper Marcus, price manufacturers 'XX? to Is about you the quarters? pricing As earlier. on

Matt Wagner

every some resulting of byproduct been don't our we which Joe, to heavily same-store question, price And That That and this we're same-store and down, to call at a we walk we number trend discussed however, could same-store within and on where to continue in this on toggle did I rate and mindset management face see that improve beginning a the of these quarter monitoring general had that July, one, modification through our first that new to to as in impact, the line marketplace. speak making team, is through change sales a derivative. earnings continue topic we change we've were continue that the second proactive our improve. positive prices to of past price used continued could resulted transition we or to we this demand July, related our is where started been September, we if sales. Conversely, of margins Matt side, well you it's when October. same-store our is the that the rate, were margins, trend the Wagner. August, as I'll earnings while group new you calls line started look we've Great really field at elasticity about to a that recognize calls when as we seeing that compressed August in results in you even mind. tell as to super post course, saw

partners been we've starting segment. some entry-level going working seeing price manufacturing based percent concessions that we're and the it's that some cases. points, tell to points, XX-plus trailers, Joe, travel really, price price I you of to target steadfastly right to upon ensure in to with the certain tune especially these in the vary So we're can

Unknown Executive

Yes.

Matt Wagner

there's the we're just or other moment, digits, And high current single take. give where cases at seeing

target as continuing on where being focus particular ASPs certain really it's to to an segments we So can down. where our year. next head into know yield we we're going those place we're demand as to as improvement in driving that's we And

Marcus Lemonis

the single I at that funnel funnel interesting look equally $X,XXX drive gets every is what's we that addressable ASP, down think that wider. on wider consistent growing the the market. always Joe, Good to bolster it is when Yes. available file the that our buyers the to Sam, of we we have our price we lower the in-stock know And units, is about been

path Karin be, to we faster And higher that success. may require can as our turn market really to then some we our realize are share, like to or it inventory and affecting that's that Tom look address and so rates the gain that because whatever other of issues consumers us

at We months changed a costs we the from all. enthusiasm But this over at itself. we look do that lifestyle not believe rates well, that at demand units, has and and existed on look interest in when for the XX customers' lifestyle have staying suppressor last that's rising

And the there, $XX,XXX, a his volume. team that as have bit in fast so understanding unlock In to want [ work have to $XX,XXX. X, and instrumental But an to though, little we we of to of use couple get do we next working ensure $XX,XXX last Matt units to in clearly months, order average that to manufacturers, in accomplish that with more months X, as these ] we from us means get can, that. X like ASP in going the need as down for lower-priced been

that are target. We towards driving

going this have up but you are more that you transaction more That's to okay Keep revenue. in et less Sam, you more people down looking not drive for We're transaction of will ASPs, parts, forecast count to cetera. ratchet When service, will Good for leads us. a count F&I, mind more properly. lot because volume,

So be ASP to volume going a with from want to the up we revenue This acquisitions. game. ASPs will make drop everybody funnel that the And declining accretive is incremental we upfront. tell widen

Joseph Altobello

just helpful. X Very of clarification. And point

of mentioned thinking thinking you growth EPS, XX% could earnings north are Marcus, clear? to year. be think, you that Are I EBITDA, just see you or you next

Marcus Lemonis

gets it. in And we look guess, growth is less thinking growing, anything try it I EBITDA. all if little said to shares, pinned B you EPS. at than simple the our obviously, with EBITDA not all And going answer know we get specifically. are and around a A go we I'm adjusted I'm wonky how numbers. XX%. down But and so ahead no a And to on other expect of is adjusted

Operator

of Tristan The next question Thomas-Martin is from BMO. we have

Tristan Thomas-Martin

quarter, can off to Is calendar case? 'XX, right I we XXX the XXX Just last the stock about ] shipments. your expectations industry think still talk bat, for [ said you that

Marcus Lemonis

with think told. about asking dynamic wholesale matching you there's retail? that Are Because needs to just that story there be interesting or wholesale a very we

Tristan Thomas-Martin

Honestly, looking tell, however hear you whatever to I'd to you're like at. story want

Marcus Lemonis

Great. Great.

Matt Wagner

Matt is Tristan, again. this

that range that that are true that would that -- You Alex were we quarter, correct. wholesale particular. Last we could anywhere I asked in with the XXX think did to suggesting up I And question. retail speak on XXX in that holds had side. maintain end still

rapid price believe could wholesale I dealers honestly anywhere the Or think on in up as segments replenish to XXX in manufacturers and well dealers' there's to I to XXX yield loss from points. opportunity much end that are so been destocking the the positioned very such lots. certain of a actually

that. retail retail In see do terms of retail beyond XXX. activity, perhaps mirroring could see not however, that I going up I

share to this I to our think ability it moment these could and we we're is I at more new we used, XXX when new just Which which the range, questions are each a confident into heading on yield XXXX. be moment, focused perhaps look know taking of in though, market, by overall we're market. the And but oftentimes, saying what like market next are over of year. XXX

used new in are which overall continue the on new Within don't so combination know I new touching nearly market we we're of and on between the really and grown anyone the and We're efforts share on the market reporting is all-time fact to share laser-focused that levels at used growing XX% side. has enhance used that that combined. used considerably space, our where marketplace, our with

Tristan Thomas-Martin

Okay. more. just X And then

of to the year does model XX,XXX that the 'XXs year or You model 'XX your 'XXs. versus 'XX? year compare called target year out X,XXX at or end How that's X,XXX model

Marcus Lemonis

our clearly for and us, the It's the will X,XXX production excellent is, hopefully good almost That's year, so we a 'XXs quite do dramatically. the as number slightly improve 'XXs a a in the how know over ago. The we XX,XXX. frankly, half be that middle a benchmark That's because news had hampered question. be be a as And because gross on confidence end down, to aged start of has margin. XXXX? it, year year faster us with we under we have total of process. lot of wonky that we're much goal started model our to, at we using greater was COVID of the And overall the a will higher inventory number beginning the 'XX the percentage an were we opportunity little Obviously, 'XXs 'XX than shut the at is gives a we exited we out the as materially been of rate and of to out manufacturers year. higher have What had what last starting

manufacturers, while the those really and on forecasting is is think overall shipments think through last piece XXX working over same turns, wholesale how going the And down cetera. increasing we've the days I predicated data I replenishment, provided in you're have that it realized ASPs. that the XX want drive to finally focus that the we in them, driving with in et on that's Matt's retail to neighborhood,

same a is over investment model that XX, 'XXs significantly brand-new dividends unit massive liquidating really understand continue our XX, and the days old XX the so why to we because trust process make a and cost. 'XX. in are model really years lower these believe of those that's floor asking driving We pay what's the to replacing days in plan Well, next to going us the to market accelerate That's next with adamant the and at we're the this over we're this. in holders exit XXX

Matt Wagner

XXXX initial clarify corollary model I to year thing. XXXX ever And X a Tristan, of compare model too, kind XXXX There's year of and year. and to false to could trying up 'XX to if model even your question, back

As the change of their XXXX. manufacturers year model in such, cadence switches

change used year the they So model to April May. and in

XXXX, introduced introduced had X that in a July. Ergo, months selling of missed actually they when solid they year season. model However, the you

So make of good feel really totally compare front. we years to with continue this just we're to that norms the given progress model kind X really, we set is new of we that a where establishing, this really that on have

Operator

KeyBanc The question from Zatzkin have Markets. is next of Noah we Capital

Noah Zatzkin

Just And positive gross mentioned you slightly flat next to me. expecting maybe be X year. for margins to

given particularly margins terms you the in of your thoughts of dynamic provide your if vehicle that down, kind there? how will hold and to some of on ASPs around gross coming kind ability vehicles, So color impact could margins

Unknown Executive

Sure.

I think is -- Chief Tom Kirn, this Officer. Accounting what

new piggybacking we of into as to of off have of heading bolster Just our to XXXXs we where I should what stated the next we out can think going able be in on somewhere maintain those position those Matt earlier, is on really margins. year, quickly as new moving historically where help margin neighborhood

that. I very think we feel strongly about

On quarter, look were turns..." we the X the the said used that in the was sitting at -- and lot were the each get and or some Matt we'd we I I reason on going "Look, side, looking to stuff through we for went another, said, to We at have aging. of other,

Marcus Lemonis

That's actually not how it happened.

clean to inventory." and "You said, went Matt be To up You clear. your better

Unknown Executive

Yes. words. many So

-- updates to start the the short valuation of that as heading in do procuring So price QX, new in of some tools XXXX. and and work our that that our points to in we we used side kind these said, term, used may procurement are through policy while on our some margin ability into at confident we of compression see the new we see on

Noah Zatzkin

Maybe X helpful. just more. Very

at hear count I I viewed mentioned benefit? $XX SG&A end that annualized X% of that million that be of the head you kind right as did a think you reduction QX, should the

Lindsey Christen

Christen. This is Lindsey

right with that are for We to do total as made headcount was difficult business. combined the at but of thing compensation the as the reductions well the looking plans. modifications a overall variable to It we be health savings to decision,

Operator

Brandon Davidson. D.A. question of we is have from Rolle next The

Brandon Rollé

that still Just first, used inventory the used what looking to to are you spread to achieve? guys of the needs on be -- used pricing percentage new new your inventory, versus adjusted

Marcus Lemonis

the about historically we in thinking not it, map I, I'm the our in that of about and X Tom we that organization really XXX with dropped have team I'm the probably I in comfortable they have that units been is chop. brought are. to about in the a It's system We've that to range, decision first cases, in satisfied to go cost. Tom of instrumental have allow want about sales system. And that cash that be from Karin and and terms a that to redeployed "Look, to try by the way wrong. that to of to level into them see those been wood need not that made we and when lower road accounting some it the the X.X, the and rest think wants flush fact are Matt but lot with business, it's I the they XXX down the out and better We the providing improvement." bringing units grow with the quarter then Karin own to fact cash a back overall said, So for quarter below turn at a consumers where

looking XX-day for they're quick swap. XX-, So a

probably X% that used will by same to closer of the or you'd right? telling basis, to inventory want stores, a back to As up expect is Actually, probably brought to back our on us, overall really where I same-store we'll that turn say total they've up X.X. get we have what X Matt, they get that would north add it, X% is which more but been down number,

Matt Wagner

that understand these also of the better can we're but trail, some just to depending relatively where yield exists such Brandon, new marketplace. that to that demand agnostic yes, needs going what's an in to to happen, on where environment follow used a the upon We're to segments get we new there. money we're some we compared fulfill in out whatever segments, Ideally, happening

and Tom lot environments, certain a put know certain make KPIs. be clear we But pressure these in might to pretty So [indiscernible]. of me X.X moments, Karin is which At that these good. turns I actually least under there

Marcus Lemonis

bought sales be the They we the improvement pretty made. acknowledged have it gamble to pitch middle What have some ground. to news so trying necessarily good. that yet, we're our That's is haven't find accounting that it's is, The team, good we to very the took took, in that business from you paid to calculated the strategy if overall grow the used we months. dollars. we has that it And the really really the profile at off margin XX gross look the total benefited of business, last

making If QX, you bit XX make days. up pain the margins that year-end used lower. we look suppressed whatever linger QX see frankly, because gross could redeploy for give decision dip that. thing that margin that in our you in XXX a we that another that a back saw And at know days. bring to the probably inflict quite the than decision on XXX We in cash that's that margin to XX in we're more But and on accelerate following I they're that next you turning. of another days, it would to can expect profile to X% to flywheel to up little in get by ourselves will then the

Brandon Rollé

a X:X ratio current industry in environment. little retail dealers your I on you on want in just is levels above like a above this understand plan destocking, wholesale it seems then given XXXX, will some been side, confidence tough And rates? to there's gives what Great. take that floor but inventory

Marcus Lemonis

Okay.

have we're you to taking that to slightly look opinion But down. There's And the to we the actual is the ASPs just the I drive loser channel, equation manufacturers dealers inventory cannot lot down. overall that the the you And to be. in Efficiency, proper that Winnebago down want consumer when that. and entire way the and that on a the clear already to probably understocked across in material forecasting, that. that Forest in include equation. manufacturers going cost and the from ASPs need down driven key -- need number, to understanding customer, to River started -- address both of The ASPs around our decontenting. discussion key both at drive Thor, be $XXX,XXX and think of be drive I proper is where side you be dealers the is production aren't the I been and ordering, raw by them this,

we and provide. now, "Yes, XXX know we can higher. to make on it families to and it take RV contributed everybody, sets buying rates We also the they company necessarily feel that's that that any to we that bit financing And confident months But really, by to the believe "Look, more do pace. the us to be are these Yes, runs have slowdown is see anywhere over it's And that an we may important. most saying our really analysis time, lines trend a want a activity can of for telling more alternative we be moving. a consumer vacation the We other true continue Matt the industry. for them, the everybody little sluggish." overall where XXX just for and affordable see also are bellwether to affordable from the still We're that's to is a regression that. We going." bit things to all

Brandon Rollé

Great. And down just industry? take suppliers? telling the help XX% And lastly, little pricing about wanted out needs it here know conversations What their a like you've said feel to do conversations I ultimately margin back are OEMs. know you is. who to you with from you with you had give to Right I about where they now,

Matt Wagner

it's question, setup that's like Brandon, a say. should I I a question, leading feel where

margins because to margins to they that the they the same protect exceedingly healthy they time, have need at toeing to their innovate need think at effective need and manufacturers I products. of while been grow that to and that fine decontenting knowing line maintain continue

consumers However, going be the are turned by extent not to it. to whereby off

unfortunately that saw question Which feel supply amount I pressure OEMs X.X of to the that the we something between this some ourselves now, understand particular. tremendous pressure. But in years they have over started be well that ensure feel that's lingering go and the vertical to to suppliers most suppliers years, on dealers And finally, first going, a suppliers, from that together to could and Us, to put to OEMs X I your and work chain. importantly, year. just were cleansing dealers. And and where need the up to ago. products think the pain the need pain manufacturers, we last still we're about the frankly, us, continues after The pressure of

out of the I the all reconcile sort off exist there I we'll be. better quicker all funnels, So whatever lingering think overpriced supplies think that we in these

Marcus Lemonis

the start how manufacturers Let's who a UAW, meat And tough of providing up it little side. When on down while dealing the you road And I to motorhome that towables business, OEMs slides, you we prices, overall frame, deal bit drive even the whether product starts just with the a because whether bit break it towable is is that issues it's for of of dissect it's know mentioned made, those all up whether bulk we into it process, the And the it's market who look for if part at our the a and to appliances, motorhome big it's company, make more. dissect unit. things chassis of it's whether it that labor on are the you motorhome could with the furniture, still having frame. are segment a continue core to motorhomes. with and potentially side, those at they're things. The manufacturing

other industry market. business those ensure I sources of their its diversify think products there's up to that those into or diversity manufacturers in to this are there's for to starting options and train entries the own manufacturers whether continue needs

healthy have environment We a so as to industry an out have more drives that to innovation. how competition figure

drives we believe competition down an Those options. are So prices, have drives that see overall that down so as things competition that industry. we to

lifestyle, we which in to a The part why that consumer, which a hand, well, the that the business, the the big we some to play we as has consumers are a them appliance to We heavier that products the to in for affordable. be believe make reengineer back will product we're work more why more to to is in the the how down itself more consumers know to have of we on affordable play more X why come part manufacturers Rates provider at business, sure. want little this enter of these is reinnovate which for for products that, with bit largest point, product. is make simple we we going have and affordable But furniture reason.

back what the we out are where to normal get at of look even it months that, were. and big to off but And go ago, we a back inflationary got that. suppliers not you was we a contributor XX to environment, may come If

Operator

Kennison next question of we have is Craig The Baird. from

Craig Kennison

Matt, your spot you mentioned behavior. of XXXX's. monthly how you and sweet today consumer last terms good into know to that compares is curious in affordability the where have curve. And I'm payment I or year insight a

Matt Wagner

That's opposite. necessarily a great the question, it's upon. Craig. consumers now, industry aren't away preying what That is we've that from quite exactly been the turned we've Because recognized rather, RV right

once submitted level there arrive?" having being why out actually ultimately actually these "Okay, downpayment for relatively of saying, start the entirety to see year. they're general to and flummoxed initially the just we to that were put we the And of consumers willingness a stable leads interest certain just they converting realized, maintaining to Which not simply buy. consumers a payments, aren't kind continue seeing this are when We it's

be would to focus we're of frankly, payment. that target assortment used product because of upon been where more willingness able get conversion which to $XXX more resell back going ELEAD money and on seen is We've prefer as we've was, under. based down down working going side. products able gone has be to mix. to monthly our down. frankly, has customers year still where to it to result used. once to over And used to that's [ overall transition ] those an this that consumers that just our the diligently efforts But continue to be monthly up side afford $XX,XXX our payment not we're that considerably been to to new that put So consumers new to try going that Historically, $XXX these to some necessarily having the of a a And for the over we and

Marcus Lemonis

segment. Craig, There the sure of Right? segments. making abandon to X balance, We are have we any don't find that ever though, other

sells Wheels. that's whether Fifth with that's just for an that And is. starting want entry-level into word as there at or to to so or the flywheel But the housing just C the of people entrants seas, be that's in lifestyle, we Fifth knows don't diesel, we new into market, do what flummoxed an gas, new if the segments, look we have this turn isn't it alternative inexpensive know trailers. we Wheel industry the declines into a that whether the I This as attract entry-level think to want the Class, way. an ASP destination to anybody trailer, bring various as to the needs affordable the segments, great most we to going all people in

Craig, hoping what you do that's going I don't just something think what I that's that, us used know is. is? Matt money. that I'm it know that I make learned word. to

Craig Kennison

but... it, google I'll Yes,

Marcus Lemonis

Matt That's the problem stupid. calls. with having these feel I always on

Craig Kennison

That's I And appreciate just up. Very maybe great. follow to that. helpful.

versus of sort you'll with this payment on retail do your monthly think year next you you in 'XX, year outlook? prices factor lower model is run a higher but that As year? lower out the rates, given And a come math

Marcus Lemonis

have goal. a is all look I are mediums, the been -- if advertising It different you retailer. payment our across and always the at we

do this start for make compressed have the process. or money retailer. not have to price of in to a not to are a We margins needs other to all a sudden We race Everybody bottom dealer. want us any

$XXX for at way towards when it, a and option people look the excuse look me, up $XXX we so payment payment day to work $XX, at a we towable to really $XXX, the $X, from in motorhome. and month a the entry-level strata $XX, $XX -- try the And going all

great do of in people. can over know $XXX. that absolute know formula a the but a afford an we we RV we or a as monthly buys. We the we number. need to of $XXX, need into buy don't We if where have bumping from a being where the for interest the how about the and That's they're connect to up take $XXX, They hit ours be if they on that head that lifestyle. is that know matrix start away payment. deal, funds scratching build head the think prices It bit $XX,XXX it in and they scratcher have to is They $XXX becomes consumer the to going goal rates are

Matt Wagner

Wonderful. Head-scratching.

Marcus Lemonis

is Head-scratching flummoxed. than easier

Okay.

Operator

we question from Inc. Daniel next Stephens Imbro have The of is

Daniel Imbro

Marcus, real I about. talked wanted to strategy the follow up Lindsey on maybe estate

doing more that then You changes? through mentioned locations, that that The strategy? be Can the you that industry M&A found just months you could to as Can strong you're talk you those optimization that those legacy stores weren't how like across slowed, you deals. on Are you you with the can portfolio marry you provide these what work few more any consolidated those acquisitions evolving just pace X recent maybe some X thought the about with has but you still a and color the are? as optimized? maybe portfolio. big And next in see as

Lindsey Christen

slowed say, really a to like think bit. pace I'd I maybe the hasn't first, Well, Yes.

When deals of then of on. been we leadership have out we aggressive pipeline I tightening that look think the stores We up those the those march, about and our own how true typical. consolidating at deals and are reasons. they diligence various some acquisition culture, on pretty looked fallen look focus certain during for for pretty we've we at however, markets. and a really mix, that's that opportunistic the performing, process, It's reasons finances, in various

the in that We structure market. to and are right our able we that well serve RV sure that making were were costs operating and consumer really

Unknown Executive

our your and as of a not and the want a to always analyze of concentrate few efforts over our a closures perspective kind market take might things kind we where like we've those, market we We how we area. time a shift in of as it, and have And it. it SG&A we'll cost at number a a from invested -- an consolidation of we those in centers change, do whole, stores to neighborhoods taken for to And question community it's stores. population and specific resources. look back on sense looks store general from underperformance where a makes what and at do if look perspective the about Digging a where years, and change, as

Marcus Lemonis

that we no, we look company that a just overall aggressive it? a target share set But Matt think we're the company And not, opportunities to they like, the lot very the that all where a at And doing locations. tell the at Tom it the because that is they lens people, strategy. In what call We Lindsey us fall the car not boxes I like? than is financials, XXX. aggressive of on are Matt the get "Hey, will want off. Lindsey to And We years, with checked, us we then to and feel does key is day same deal." to growers, comfortable towards. this car, deals it's look we go Tom that, XXX different of the different be get grow X And I sort in sit and table grow, looking with to different and of they and on X, march and want not brands mandate over a and what's at to the visit are what they grow, XXX the doing maintaining and grow. to carry, right I the a our that look Yes, we'll than to clear What's acquisition. X inside and right, side it. about thing. and we're more deep Matt of the environment? the opportunity, both the deals And balance they way see the and often dive balance growth Lindsey been a underlying And have. of don't risks culture absolute are get the dynamic X the cases, an we a do the I facility next parties associated look have the that at while if that that market

as think the that better. went we deals we realized the I through got also year,

little of in pick up margin. generate, $XXX happening unfortunately, with -- our the a we over have so a going A opinion, mature to a us. the take whatever perform potential adjust And chain to necessarily those overall to in pass. to Which that's other a But is fixed were on of to at they when then mandate sellers, return revenue. And got the we some which then lower was better. delivering to go we could deals to time think better our those period million to will And shareholders, from be we higher to cost, means had expect if had had market, XX-store smaller, the they things. we smart, are capital, be things a EBITDA of bit million stores that $XXX for we're a unwilling

Daniel Imbro

that cost couple I'm SG&A just I if here. about maybe And talking outlook. helpful. That's the it. Got with

percent growth, the a $XX $XX right If we And came and see compensation. dollars return You we as gross of stores. direction of mid-XXs less you're of lower in we a profit see think of high have percent maybe profitable again? you assuming gross million profit. million XXs in gross going a unit low- at lower I'm mentioned comp, closing you I could as profit to the see a to

Marcus Lemonis

beat over company. best providing the going believe now right be goal public also to a people for range struggling up growth. goal, a holding public as our for even things on over we we balance little to of We're achieved the time. us what XX% in management this. bit percentage America that believe X% wages since are as our technicians the a compress went our talent investing is people We our is prior time. And and and has get as is wages And margins. a EBITDA holding we of always more been and us and growth We've we management, and understand and we better on better margin for in between those SG&A level may to our -- to optimum in Our the for XX%, of in that team

XX% the margins. to driven around end probably is the because by probably somewhere down. will XX% Normalize the We revenue in we margins, range largely XX% be compressed XX.X%, to year would

that. of we we and renegotiated been on As no not. of X% look it less our come than people, know we to out. have Brent very the in and take will forward, successful backs those costs It have all Tom cannot leases. We've

backs locations. eliminated anybody the in sticky been variable we have we're had But unfortunately cost. a in fixed were don't relationships That's thinking We make We our big, certain to to that marketing costs going in of That that money driving the then people leave going all model. have want more this collectively our on terminate people. always adding We've been revenue contributes side We're successful make to and more that. way. to to on back by it. money more call

be think it we we to COVID's of seasonally should a softie held us of group make probably than September, should tend things that time. We a We This basically me went through to we said growth longer employer for And So a over. be sloppier why bit this be. We headcount. that. I like a on to do that's I got in in party's some we than "Okay changes." reduction to softie, made always significant little to around explosive choice. always be. want people

back outlined think those reduction going some folks total was selling the the reason of the because Tom are that X,XXX. returns. season and north to come Lindsey The X,XXX spring is I as headcount of

did we want number than was people other not forma that. So that to anything pro a have

Daniel Imbro

Understood.

next So think of you hundred is and XX out, down just basis then XX% how a points Marcus? to the XX%, year-over-year plan couple about months

Marcus Lemonis

X%, than our be want that year. we -- goal. them goal be good get to is when we But to because when know Yes. you how still out to as I a I going is we say as margins are XX% good less next mean, -- to not no like laid it

Daniel Imbro

the Appreciate color. Understood.

Marcus Lemonis

Yes. Thank you.

Operator

James of Hardiman The is next we from question have Citigroup.

Sean Wagner

This James. is on for Wagner Sean

of as new inventory, of about as 'XX an 'XX Do talked percentage of rest your industry a breakdown far where estimate the kind you the as inventory. and of of inventory is total? You've year aged have model

Matt Wagner

the where entirety I compared really far of tough this gauge having good into last upon tell where could that a landscape upcoming upon that's that that trend, deals the share It's And based our feel look at we point. I we the in of us. And really a about less at this insight to year. can saw to But competitors industry, manufacturers, you, advantageous we our we head we're to in the most but right of taking our position right now, based number especially with year. we're only trending conversations continue now, the we are that

Marcus Lemonis

that the And our unfortunately more through acquisitions, only is is purchased is bought dealerships we've and it transaction. the the is that analysis because ground the 'XXs be largely going of accretive the on That than that to The inventory XXX ground. on We a aging transparent we some at purchased not it end I'm was mismanagement we We had in have little a reason anything because that of ourselves. factor 'XXs recently, know goodwill we path if of that. Period, that ones and inventory we to of of opportunistic look done acquisitions. story. inventory.

understand the As but number coming appropriate in XX look please that they're more acquisitions, that we grow to at values. potentially make again, could

made. are today is going acquisition the is how transactions from those approaching to original where we're anywhere transactions to invoice XX% the Our of XX% value be

down So to factored massive disclose we the able we know accretive with if acquisition that XXX the that XXXXs XX% XX% that transaction off and or our quickly, associated data because those a we writing units and that's fully see the you in as that will to to come goodwill genesis made and We'll nature valuing XXX, please back scrape they those be number. inventory from you number at went that through move the on. in of and

into get and country the alike it other probably COVID banks The today, process. environment job didn't is, a down a good enough that in saving And when do is back want pay manufactures curtailments, that's during like happens, we're you dealers acorns around that that a when of capital aging sufficient on the reality and you and leads situation When you over slow, months. a your That have path acquired. next to is where really need compressed inventory how is acquisition may don't to the line. their to the on X, be working margins it the the business do are tougher see we you X

floor happiness we cut in and back the levels, And knowing that dealers that lower and available an some we our opportunity inventory may at marketplace, pick the right -- the of not from the absorb used may have end up the decision cash, be have opportunity not some to and unfortunately our make to which also there but to putting will to product up inventory may who -- value. light the the of made

Sean Wagner

quick another guess, I one. just, And Okay.

gradually? And sort year and of comps calendar about expect the for -- each I of industry. point is full you time? year X point to you are sort that You've Or there demand the positively? talked Is for your in inflect wholesale improving guess, just what cadence where easier expectations expecting demand-driven maybe year? is at get that retail a

Matt Wagner

are they're subsets about tough activity. I industry, where continue Yes, them the retail to the upon year, starting end down even wholesale in QX year. the is, bleed cube off the upon to time half have probably this What perhaps weigh seems have upon we're QX, heading that Sean, new, based to of based And information. manufacturers bit starts building receiving going mean, that's I a ultimately, beyond I only in separate it take of their schedules again healthy as the before pretty into question. of them can course, sort of what to moment. out back of of really, planning slow going impact talking me to perspective, a production next of because that, through little backlog But retail are it to to X from a will think on of you're that into based next From many for tell. some see

Marcus Lemonis

we But of on gaps, better. look year-over-year the the But slowing the the right, that still in a they're better. are the October. of month still basis, example, on gaps in down We're when performance new, the at month a or same-store it's piece. sense still It's for seasonal September

Matt Wagner

as we best we were we have September, we showed In nearly XX the actually. September in months, well, have improvement -- in

same-store comp So we've that months. new it's seen in the best XX

line, I industry. can't While I trend the feel good about to broader speak necessarily our

Marcus Lemonis

generate We that needs largely that's it the and went aggressive know knowing confidence and segments half our driven QX be that back that in pricing being into punch. us. given we That's That's bring ultimately that's everybody what's part stratify what full to more the key that's we're as the petri QX and actually -- a identification as certain of That's leads to move the can 'XX else inventory and dish given said, by down, us QX the activity. of as in for conversion? pricing generate us in confidence in be were of quarter going of early where we to beat to lower, the the team we to the management at QX, generate as if we more the looking in almost and what's to

Operator

we Bret question next The from Jordan is Jefferies. of have

Patrick Buckley

This is Bret. Patrick Buckley on for

how things GPUs Is 'XX? new a to we expect On more and backdrop on just should start about ASPs thinking that there? consumer pre-COVID are tougher the side, normal higher to you lower heading or weigh into guys compared structurally to F&I

Unknown Executive

typically on to GPU try a it new basis. We a look as We a used of look as don't F&I company at at revenue. and percentage our really

seen kind you've mark. that average hovering of think XX% I time, the over so historical And around

Marcus Lemonis

XX% to Yes, XX%.

Unknown Executive

we that's good And XX% try forward. think XX%. moving to hit target to always a that I

Marcus Lemonis

and that's the of hard creating the we things a Yes. little -- the salespeople is interest And harder demand mean, thousands front time take lines, listen centers a from people for have the current interest the sign pressure putting had that a to somebody convert that the bit "Please have save product. caused to rates environment. hasn't rate little RV," super definitely you. our for actually our folks But they'll sales field this isn't Sam convert "I'm sell make to services. a other on to time to I of our to excited not maybe business and It's been terribly for the paper." that of sure on you piece actually X products if decision. What lot And more are ability in Good it managers, finance and to really team by and through to our that the affected is

bit Our affected they're looking issue had our of finance us reserve yesterday. warranty, of the banks the early been what's ahead rate penetration and some portion because hasn't in rates a even we of to as yield even started lower their as Sam ahead We consumers. obviously, be trying much. point business roadside at the to happening X.X banks curve, higher. But to rates less sure a some our for yesterday, Good they're We've little reduction actually really market. see little on I'm made the X.XX are And

X do on thing want this I topic. other to address

We have modification at availability in any seen point not this the credit. of

all. seen have not We at that

We they more at have a look expensive asset. when seen on the consumers particularly more pause bit little rate, a

relieved but the lower and much naive As challenge at not brought that's expect to I back there we're probably itself XX% it closer up than months, that years a we accepting that. in some little and to and normalcy a the that come it a we of the down, of to being rates be lot little new year, as ASPs, work to rate a higher my middle with a a having to than looking From the but consumer the Maybe range. more, XX% we're we'll prices but that we're little would perspective, we've that of little, longer they X next reductions, out taking We've has expect on it not over lowered they're X lightly to we of of next the be than made did ago. as hopefully to will X XX%. to XX.X% some level to in harder XX% return SG&A that planning a bit

Patrick Buckley

demand could talk your a the Great. ] That's bit and And trended more how availability you late? on side? service strategy? as capacity then about And M&A has Bay expansion trended helpful. how and has of technician parts rank [ Where within does

Marcus Lemonis

] of Bay the X that [ key key acquisition expansion pillars in making the components, decision. is

bad want a business of we from business. our to to reports, sitting F&I or product market if That's factors. that that a find lot the X,XXX bays look is, we dealer good are tend how not they service, buy Those and model. We're bad As recent up we the at their with their technicians. that used today acquisition, sure, But all good the but that we're is, business not share has, have sells X,XXX how doesn't brands or carry. sitting around

rate the to we millions pace for to inside It supplement of We industry to. technicians of just dollars multiple continue wanted do. at in own the dime, our what doing is it it own the company, our trying and on that wasn't universities to training invest

on So own. on took we water our that

labor continue for attract continue to in bolster. to to this country have We this skilled to lifestyle

XX in is... got universe the minus plus or the RVs maybe total marketplace. Look, reported you've million bay And

Unknown Executive

XX,XXX Maybe bays?

Marcus Lemonis

will a to enough there's universe be perpetuity. where be technicians. to ever that, going the on bays mean, beauty going The never white space in like I or enough go of there's it's

neighborhood. those lot that involved, just our labor of mid- parts historically, inventory mean, our basis adding attractive combined a is to XX%-plus without part strategy because acquisition company margins -- has us, margins you're side margins. the with I why, really in the the when and overall XX%-plus For a are Which of on gross high-XXs margins alone, on is in company

You our that's take you the take differentiator. Good Sam, business, like service

Operator

Lemonis further turn no at for to like would the I comments. over to floor time. Marcus are back There this questions closing

Marcus Lemonis

gross revenue, Thank call. importantly, in a improvement EBITDA And most to for adjusted you with our investment again for of our outlook overall positive and unit SG&A We better reiterate improvement in and percentage. in and our for as our want same-store profit positive XX%. 'XX growing return sales on lastly our excess with shareholders, joining

like team, know committed results. As work outside numbers. are those that our those hell to we're obviously affect We're a management to those. could that control We factors going that of we beat to ensure delivering there

February. again. So you thanks forward look to seeing in We

Operator

This concludes call. Thank joining today's you for us.

your disconnect now may lines. You

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