Camping World Holdings(CWH) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights Camping World reported significant Q1 2025 improvements, with revenue up 3.6% to $1.4 billion, Adjusted EBITDA surging 278% to $31.1 million, and net loss narrowing to $24.7 million, driven by strong used vehicle sales and record market share Q1 2025 Key Financial Metrics (Year-over-Year) | Metric | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $1.4 billion | $1.36 billion | +$49.5 million | +3.6% | | Net Loss | ($24.7 million) | ($50.8 million) | +$26.1 million | +51.4% | | Adjusted EBITDA | $31.1 million | $8.2 million | +$22.9 million | +278.0% | | Diluted Loss Per Share | ($0.21) | ($0.51) | +$0.30 | +58.8% | | Adjusted Loss Per Share | ($0.16) | ($0.40) | +$0.24 | +60.0% | - The company achieved a record market share for combined new and used units during the quarter[2] - Combined new and used vehicle unit sales increased by 11.2% to 30,665 units, primarily driven by a 30.3% increase in used vehicle sales[3] Management Commentary Management expressed confidence in the company's performance, highlighting a commitment to increasing unit sales and profitability, with adjusted EBITDA improving nearly fourfold and expected SG&A reductions - CEO Marcus Lemonis stated the commitment is to "sell more units and make more money," reflected in a nearly 4x YoY increase in adjusted EBITDA[2] - The company has taken actions to lower headcount and optimize its footprint, expecting SG&A reductions to improve future profitability[2] - President Matthew Wagner confirmed confidence in delivering low-double-digit growth in used units, low-single-digit growth in new units, and a 600-700 basis point improvement in SG&A as a percentage of gross profit[2] - Management noted no discernible impacts on consumer behavior from tariffs, with April-to-date same-store unit sales tracking up mid-teens for used and high-singles for new vehicles[2] Detailed Operational Performance The company's Q1 2025 operational performance was characterized by a strategic shift towards used vehicles, driving a 6.8% increase in total gross profit despite slight declines in new vehicle revenue and Good Sam Services margins Vehicle Sales Performance (New & Used) In Q1 2025, used vehicle sales were the primary growth driver, with units up 30.3% and revenue up 25.1%, while new vehicle sales and average selling prices declined Q1 2025 Vehicle Sales Performance (YoY) | Vehicle Type | Unit Sales | Unit Change | Revenue | Revenue Change | | :--- | :--- | :--- | :--- | :--- | | New Vehicles | 16,726 units | -0.9% | $621.4 million | -5.3% | | Used Vehicles | 13,939 units | +30.3% | $422.4 million | +25.1% | | Total | 30,665 units | +11.2% | $1,043.8 million | +5.1% | Q1 2025 Average Selling Price (ASP) and Same Store Sales (YoY) | Metric | New Vehicles | Used Vehicles | | :--- | :--- | :--- | | Average Selling Price (ASP) | $37,154 (-4.4%) | $30,300 (-4.0%) | | Same Store Unit Sales | -2.0% | +28.5% | Products, Service, and Other Performance Products, service, and other revenue decreased 7.3% due to divestiture and labor reallocation, but the segment's gross margin significantly improved by 580 basis points to 48.6% - Revenue for Products, service and other was $165.0 million, a decrease of $12.9 million or 7.3% YoY[3] - The revenue decline was mainly due to the divestiture of the RV furniture business and reallocation of service labor to recondition used inventory[3] - Gross margin for this segment increased by 580 basis points to 48.6%, a positive outcome of the business divestiture and improved pricing[3][19] Gross Profit and Margins Total gross profit for Q1 2025 increased by 6.8% to $429.6 million, primarily fueled by higher used vehicle and Finance and Insurance gross profit, despite a decline in Good Sam Services and Plans gross margin Q1 2025 Gross Margin by Segment (YoY) | Segment | Q1 2025 Margin | Q1 2024 Margin | Basis Point Change | | :--- | :--- | :--- | :--- | | New Vehicles | 13.7% | 13.9% | -19 bps | | Used Vehicles | 18.6% | 17.5% | +104 bps | | Products, service and other | 48.6% | 42.8% | +580 bps | | Good Sam Services and Plans | 61.6% | 66.8% | -511 bps | | Total Gross Margin | 30.4% | 29.5% | +89 bps | - The increase in total gross profit was mainly driven by higher used vehicle gross profit (+$19.2 million) and higher F&I gross profit (+$13.2 million)[3][4] Operating Expenses and Profitability In Q1 2025, Selling, General, and Administrative expenses rose 4.3% to $387.4 million, but significant interest expense savings contributed to a substantial 51.4% net loss improvement and 278% Adjusted EBITDA growth Q1 2025 Key Expense and Profitability Metrics (YoY) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | SG&A | $387.4 million | $371.5 million | +4.3% | | Floor plan interest expense | $18.3 million | $27.9 million | -34.3% | | Other interest expense, net | $30.5 million | $36.1 million | -15.4% | | Net Loss | ($24.7 million) | ($50.8 million) | +51.4% | | Adjusted EBITDA | $31.1 million | $8.2 million | +278.0% | - The increase in SG&A was primarily due to a $9.6 million rise in employee cash compensation and $7.3 million in additional advertising expenses[7] Revisions to Prior Period Financials The company identified and revised immaterial prior period misstatements related to a deferred tax asset, which increased Total Assets and Total Stockholders' Equity by $43.8 million as of March 31, 2024 - Management identified immaterial misstatements from prior periods related to a deferred tax asset in CWGS Enterprises, LLC[5] Effect of Revisions on Consolidated Balance Sheet (As of March 31, 2024, in thousands) | Line Item | As Previously Reported | Adjustment | As Revised | | :--- | :--- | :--- | :--- | | Deferred tax assets, net | $153,716 | $43,768 | $197,484 | | Total assets | $5,023,162 | $43,768 | $5,066,930 | | Total stockholders' equity | $152,410 | $43,768 | $196,178 | Financial Statements The Q1 2025 financial statements reflect higher revenue and gross profit but a net loss, increased total inventories, and a significant use of cash in operating activities primarily driven by inventory build-up Consolidated Statements of Operations For Q1 2025, total revenues increased to $1.41 billion and gross profit rose to $429.6 million, resulting in a net loss of $24.7 million, a significant improvement from the prior-year period Q1 2025 Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $1,413,524 | $1,364,017 | | Total Gross Profit | $429,628 | $402,397 | | Income from Operations | $20,842 | $4,222 | | Net Loss | $(24,682) | $(50,806) | | Net Loss Attributable to CWH | $(12,280) | $(22,307) | Consolidated Balance Sheets As of March 31, 2025, cash and cash equivalents decreased to $20.9 million, total inventories increased to $2.12 billion, and total assets reached $5.15 billion, with total stockholders' equity at $458.8 million Balance Sheet Summary (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $20,916 | $208,422 | | Inventories | $2,119,169 | $1,821,837 | | Total Assets | $5,147,210 | $4,863,277 | | Notes payable – floor plan, net | $1,320,687 | $1,161,713 | | Total Liabilities | $4,688,399 | $4,378,328 | | Total Stockholders' Equity | $458,811 | $484,949 | Consolidated Statements of Cash Flows Net cash used in operating activities significantly increased to $232.5 million in Q1 2025, primarily due to inventory build-up, resulting in a net decrease in cash of $187.5 million for the quarter Q1 2025 Statement of Cash Flows Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(232,479) | $(67,982) | | Net cash used in investing activities | $(145,428) | $(59,498) | | Net cash provided by financing activities | $190,401 | $117,551 | | Net Decrease in Cash | $(187,506) | $(9,929) | Non-GAAP Financial Measures The company provides several non-GAAP measures, including Adjusted EBITDA and Adjusted Loss Per Share, to supplement GAAP financial statements and offer a clearer view of ongoing operational performance by excluding certain non-cash or one-time items - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Loss Per Share to provide useful information about operating results and enhance the understanding of past and future performance[27] Adjusted EBITDA Reconciliation Adjusted EBITDA for Q1 2025 was $31.1 million, a significant increase from $8.2 million in Q1 2024, reconciled from net loss by adding back interest, depreciation and amortization, and stock-based compensation Q1 2025 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(24,682) | $(50,806) | | Other interest expense, net | 30,531 | 36,094 | | Depreciation and amortization | 22,544 | 19,290 | | Income tax benefit | (3,471) | (9,042) | | Subtotal EBITDA | 24,922 | (4,464) | | Long-lived asset impairment | 620 | 5,827 | | (Gain) loss on sale or disposal of assets, net | (1,823) | 1,585 | | SBC | 7,270 | 5,197 | | Other adjustments | 157 | 94 | | Adjusted EBITDA | $31,146 | $8,239 | Adjusted Loss Per Share Reconciliation The adjusted diluted loss per share improved to ($0.16) for Q1 2025 from ($0.40) in the prior-year quarter, after accounting for various non-GAAP adjustments Q1 2025 Reconciliation of GAAP to Non-GAAP Loss Per Share | Per Share Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Loss per share — basic | $(0.20) | $(0.50) | | Adjusted loss per share - basic | $(0.15) | $(0.38) | | Loss per share — diluted | $(0.21) | $(0.51) | | Adjusted loss per share - diluted | $(0.16) | $(0.40) | SG&A Excluding SBC Total SG&A Excluding SBC was $380.3 million in Q1 2025, improving to 88.5% as a percentage of gross profit from 91.0% in Q1 2024, indicating better cost control relative to gross profit generation Q1 2025 SG&A Excluding SBC (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | SG&A | $387,445 | $371,473 | | SBC - SG&A | (7,145) | (5,105) | | SG&A Excluding SBC | $380,300 | $366,368 | | As a % of gross profit | 88.5% | 91.0% |