Camping World (CWH) Q2 2024 earnings summary

Executive summary

• Achieved record new unit market share, selling over 22,000 new RVs, up 17% year-over-year, with same store new vehicle unit growth accelerating into the mid-teens in June and low-twenties in July.

• Q2 2024 revenue was $1.81 billion, down 5.0% year-over-year, with net income attributable to Camping World Holdings, Inc. of $9.8 million, a 66% decrease from Q2 2023.

• Gross margin held steady at 30.3%, with new vehicle margins at 15.3% and used vehicle margins dropping to 19.0%.

• Operating expenses increased due to higher advertising and impairment charges, while interest expenses rose on higher rates and balances.

• Management is focused on disciplined used inventory management, cost structure optimization, and risk mitigation amid macroeconomic headwinds.

Financial highlights

• Q2 2024 revenue: $1.81 billion (down 5.0% year-over-year); new vehicle revenue rose 6% to $847 million; used vehicle revenue fell 22.8%.

• Adjusted EBITDA for Q2 2024: $105.6 million (down from $139.3 million in Q2 2023); margin declined to 5.8% from 7.3%.

• Good Sam Services and Plans delivered record gross profit of $35.4 million; Q2 revenue up 3.0% year-over-year to $52.5 million.

• Net income attributable to Camping World Holdings, Inc.: $9.8 million for Q2 2024 (down from $28.7 million in Q2 2023); diluted EPS was $0.22 versus $0.64 last year.

• Floor plan and other interest expenses increased $9.8 million year-over-year for the quarter.

Outlook and guidance

• Expect used vehicle volume for 2024 to be about 50,000 units, with back-half margins in the mid to high teens.

• Anticipate double-digit same-store sales increases for new vehicles in the back half of 2024, with margins around 14.5%-15%.

• SG&A as a percentage of gross profit projected to end 2024 in the low to mid-80s, above the long-term target of 72-73%.

• Management expects continued pressure on used vehicle margins and further declines in Good Sam Club membership due to pricing changes and the introduction of a free basic plan.

• 2025 expected to see margin stabilization and renewed growth as rate cuts and improved sentiment materialize.