Camping World Holdings (CWH 4.42%) held its fourth-quarter and full-year 2024 earnings call on February 26, 2025. The recreational vehicle (RV) retailer discussed its growth strategy and operational efficiency measures in what management described as a relatively flat industry environment. Here are the three most important takeaways for long-term investors.
Market Share Momentum Continues with Ambitious 2025 Targets
Management reported achieving record market share in 2024 and outlined its goal of 12% market share in 2025. The company has seen promising early 2025 results, with January used same-store sales increasing in the high teens and new same-store unit sales up low single digits.
We ended 2024 with record combined new and used market share, hitting 11.2%. We're seeing combined unit momentum carry into our early 2025 results and expect to set a new record at 12%, selling over 130,000 units, up from 121,500 in 2024. The early '25 results through today are encouraging with healthy mid-single-digit growth.
-- Marcus A. Lemonis, Chairman & CEO
Financial Improvements Expected Through SG&A Cuts and Used Vehicle Focus
Management outlined specific financial targets for 2025, including SG&A improvements and gross margin ranges. The company reported it has already implemented cost-cutting measures including headcount reductions to deliver on these commitments. Used vehicle procurement has been a particular focus, with management noting record-setting purchase volumes of used vehicles in early 2025.
It's my expectation that our company will experience explosive EBITDA growth in the first quarter compared to the prior year. That's going to be driven primarily by gross margin and gross profit dollar improvement along with significant SG&A improvements. Look, we have 2 goals for the year. It's very simple, sell more RVs and make more money.
-- Marcus A. Lemonis, Chairman & CEO
Plans to Strengthen the Balance Sheet
Management detailed recent financial transactions including raising $330 million in growth capital and extending their RV floor plan facility. The company ended the fourth quarter with $288 million in cash and is prioritizing debt reduction, according to executive statements.
When we went out and raised capital, we made a commitment to not just have the cash leave. And if you listen to Tom's remarks between the cash on the balance sheet, how much used inventory we own free and clear, how much parts inventory we own free and clear, how much real estate we own free and clear, our balance sheet is really, really strong. ... The No. 1 focus, and while it's not part of our sales pitch, the No. 1 focus for all of us in the room today is to get our leverage down by the end of 2025.
-- Marcus A. Lemonis, Chairman & CEO
Looking Ahead
Management provided an industry outlook for 2025, projecting retail demand to be relatively flat at around 350,000 units, with wholesale shipments expected to be 10,000-15,000 units higher to restock dealer inventory. Executives stated Camping World has already acquired six dealership rooftops year-to-date with plans to close four to six more by spring.
The company outlined specific improvement targets including: 10%-15% unit growth on used vehicles, low single-digit growth on new vehicles, 13.5%-14% gross margin on new vehicles, 18.5%-19% gross margin on used vehicles, and 600-700 basis-point improvement in SG&A as a percentage of gross profit. As Lemonis stated, "We are going to achieve that 600 to 700 basis points [of SG&A improvement] come hell or high water."
