Key Points
- Revenue for Q2 2024 was $1.81 billion, missing analyst expectations by $60.6 million.
- Adjusted EPS came in at $0.38, falling short of the expected $0.55.
- New vehicle revenue rose 5.8% year over year, while used vehicle revenue declined by 22.8%.
Camping World (CWH -5.76%), the RV retailer and service leader, released mixed second-quarter earnings on Wednesday. The company reported revenue of $1.81 billion, down 5% from $1.9 billion in 2023's Q2 and below the expected $1.87 billion. Adjusted EPS of $0.38 missed the $0.55 estimate. An overall drop in used vehicle sales and lower average selling prices contributed to the revenue shortfall, while new vehicle sales showed growth.
The company is still showing signs of growth as it expanded its network of dealerships, ending the quarter with 215 store locations (up 6% year over year).
| Metric | Q2 2024 | Analyst Estimate | Q2 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $1.81 billion | $1.87 billion | $1.9 billion | (5.0%) |
| New vehicle revenue | $847.1 million | N/A | $800.9 million | 5.8% |
| Used vehicle revenue | $480.8 million | N/A | $623.0 million | (22.8%) |
| Adjusted EPS | $0.38 | $0.55 | $0.73 | (48%) |
Source: Camping World. Note: Analyst estimates provided by FactSet. YOY = Year over year.
Company Overview
Camping World operates a national network of RV dealerships and service centers. It offers new and used vehicles, vehicle financing, parts, accessories, and various protection plans. The company emphasizes extensive product offerings, customer service, and strategic partnerships with RV manufacturers.
The company's challenges include managing seasonal business cycles and inventory levels, especially used vehicles. Its recent focus has been on leveraging strategic partnerships and customer service excellence to drive growth.
Quarterly Performance and Notable Developments
During the quarter, new vehicle revenue rose by 5.8% year over year to $847.1 million. New vehicle unit sales of 22,084 climbed by 16.9%. This growth resulted from strategic discounting and partnerships with major manufacturers like Thor Industries (THO 0.10%) and Forest River. In contrast, used vehicle revenue fell by 22.8% to $480.8 million, with unit sales of 15,700 down by 11.7% compared to 2023's Q2. Camping World sold 11.7% fewer used vehicles year over year and the average selling price dropped by 12.6%, reflecting aggressive discounting efforts to move inventory.
Products, services, and other revenue declined by 4.8% to $235.9 million. The restructuring of the Active Sports segment and fewer used vehicle sales were key factors. Management highlighted that elevated inventory levels and discounting led to a 392 basis point decrease in used vehicle gross margin.
The expansion in store locations was a positive for the quarter as it enhances Camping World's national presence and accessibility to customers. The introduction of new parts and aftermarket agreements, such as the one with LCI Industries (LCII -0.70%) subsidiary Lippert, aims to improve product margins and overall profitability.
Despite revenue shortfalls, the company handled operational efficiency by reducing employee compensation costs, even as store locations increased. Floor plan interest expenses of $27.8 million were up 34%, driven by higher interest rates and principal balances.
Financial Outlook
Looking ahead, Camping World didn't offer specific guidance but management said it is optimistic about new vehicle sales volumes for the remainder of 2024 and into 2025. Management remains cautious, acknowledging the challenging macroeconomic environment but remaining focused on optimizing cost structures and inventory levels. Analysts predict a better second half for the company, anticipating growth in market share and operational improvements.
Investors should keep an eye on how the company navigates interest rate impacts, inventory management, and the effectiveness of its strategic initiatives.
