What happened

Shares of Camping World Holdings (CWH -3.53%) trailed the market by a wide margin this week, dropping 13% through early-Friday trading compared to a 2% decline in the S&P 500. That decline wasn't enough to push shares of the recreational vehicle specialist below the market's returns, though. The stock is still up by over 25% in 2023, according to data provided by S&P Global Market Intelligence, while the wider market is up 17%.

The spike this week came after the company showed improving results in its Q2 earnings update.

So what

Camping World Holdings said on Tuesday that sales landed at $1.9 billion for the period that ended in late June, translating into a 12% decline. This drop reflected continued pressure on the RV market, consistent with the trends that rivals such as Winnebago have reported as consumers step back from spending in the industry.

Yet Camping World Holdings achieved some successes, including a double-digit increase in used vehicle sales. Gross profit margin declines were modest as well, despite price cuts to keep inventory moving. And the company remained profitable thanks to cost cuts and reduced manufacturing expenses.

Executives highlighted the company's rising sales volumes and its expanding presence at dealerships around the county. "We sold the most units in our company's history, with record setting used vehicle gross profit," CEO Marcus Lemonis said in a press release.

Now what

To be sure, Camping World Holdings is not firing on all cylinders today. Revenue and profits have declined substantially over the last six months compared to the prior-year period. Yet that's to be expected given the current downturn in the RV industry.

Meanwhile, the slump could be ending soon, and the company has already demonstrated that it can remain profitable through tough selling conditions. Its inventory levels appear low enough to lay the groundwork for a sharp earnings rebound, too, once the next cyclical upturn starts.

Given those positive factors, it's possible that the consumer discretionary stock will continue its broader trend of beating the market so far in 2023, notwithstanding this past week's slump.