Camping World Holdings(CWH) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company recorded revenue of $1.4 billion for the first quarter, representing a 4% increase year-over-year, primarily driven by a 30% increase in used unit sales [13] - Adjusted EBITDA rose to $31.1 million compared to $8.2 million in the previous year, indicating significant operational improvement [14] - The company ended the quarter with approximately $179 million in cash, including about $158 million in the floorplan offset account [15] Business Line Data and Key Metrics Changes - Used vehicle gross margins improved to 18.6%, reflecting year-over-year growth as fresh inventory was aggressively brought back into the system [13] - The company opened nine new dealerships during the quarter, with five Lazydays locations becoming profitable in March, contrasting with previous cumulative EBITDA losses [11][12] Market Data and Key Metrics Changes - The company achieved a combined new and used unit market share of over 14% through February, indicating strong competitive positioning [10] - Used same-store unit sales were up in the high teens in April, while new unit sales increased in the high single digits [10] Company Strategy and Development Direction - The company aims to improve SG&A as a percentage of gross profit by 600 to 700 basis points, focusing on cost reduction and operational efficiency [5][14] - The management emphasized a commitment to selling more RVs, improving margins, and reducing costs, with a focus on profitability and market share growth [5][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth in excess of low double digits in used units and low single digits in new units, despite some pressure on average selling prices (ASP) [9] - The company does not foresee significant fallout from tariff impacts on the RV industry, maintaining a positive outlook for demand and pricing stability [28][29] Other Important Information - The company has made strategic investments in its roadside assistance business to stabilize margins and drive earnings growth later in 2025 [13] - Management highlighted the importance of understanding consumer affordability and the potential for RV ownership as a cost-effective alternative for family vacations [41] Q&A Session Summary Question: ASP softness and promotional support from OEM partners - Management noted that ASP softness was not driven by excessive promotions and emphasized responsible inventory planning and collaboration with manufacturers [18][19] Question: Acceleration in same-store sales in April - Management attributed the acceleration to improved weather conditions and easier comparisons from the previous year, with confidence in maintaining low single-digit growth for the year [23][24] Question: Impact of tariffs on pricing - Management does not anticipate significant price increases before the model year changeover and believes any increases will benefit the used business [28][29] Question: Durability of balance sheet amid economic slowdown - Management reassured investors of a healthy balance sheet with significant cash reserves and plans to continue paying down debt [34][36] Question: Strength in business despite consumer confidence softness - Management highlighted the stable foundation of the RV market and the appeal of RV ownership as an affordable alternative for families [41] Question: Used business outperformance - Management credited effective sourcing strategies and record procurement efforts for the strong performance in the used segment [46] Question: Cost reduction actions and their impact - Management detailed the $35 million annualized cost reduction plan, emphasizing that most of the cuts have been implemented and will positively impact the bottom line [52][54] Question: Market consolidation and M&A outlook - Management indicated that consolidations are accretive to the bottom line and expressed a willingness to pursue opportunistic acquisitions while focusing on cash generation and deleveraging [72][78]