Camping World Holdings, Inc. (CWH) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company demonstrated strong financial performance with a 40% growth in EBITDA and improved SG&A efficiency. The focus on the used RV market, which is performing well, and strategic investments in AI and operational efficiencies position the company for future growth. Despite some macroeconomic uncertainties, the management's strategy and the potential for M&A activity provide a positive outlook. The Q&A section highlighted a conservative yet optimistic approach, with management addressing concerns and focusing on growth drivers. Overall, the sentiment is positive with a focus on long-term profitability.
Key Financial Performance
Revenue $1.8 billion, an increase of 5% year-over-year, driven by unit volume increases in used RVs exceeding 30%.
New ASPs (Average Selling Prices) Just under $38,000, a decline of roughly 9% year-over-year, attributed to a richer mix in the quarter which slightly impacted gross margin percentages.
Adjusted EBITDA $95.7 million, a growth of over 40% compared to $67.5 million last year, driven by improved SG&A as a percentage of gross profit and sequential improvement in new ASPs.
SG&A as a Percentage of Gross Profit Improved by 360 basis points year-over-year, reflecting run rate savings and sequential improvement in new ASPs.
Cash on Balance Sheet $230 million, reflecting stronger unit sales per rooftop and improved fixed cost leverage.
Used Inventory Owned Outright $427 million, showcasing the company's investment in used RVs.
Parts Inventory $173 million, indicating stable inventory levels for parts.
Real Estate Without Associated Mortgage Nearly $260 million, highlighting the company's asset strength.
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Operating Highlights
Exclusive Products: Developing exclusive products tailored to consumer preferences and desired monthly payments, suggesting potential upside in the new RV market.
Used RV Sales: Unit volume increases in used RVs exceeded 30%, with scalability built into the used RV supply chain. Model year 2026 prices positively impact the used industry outlook.
Dealership Acquisitions: Significant white space in the North American RV market with a pipeline of dealership acquisition activity being pursued.
Cost Structure Improvements: $15 million of additional cost takeout opportunities identified through marketing technology, launch of 2 additional CRMs, and implementation of agentic AI.
SG&A Efficiency: SG&A as a percentage of gross profit improved by 360 basis points year-over-year.
Net Leverage Reduction: Net leverage reduced by nearly 3 turns since the beginning of the year through debt paydown, earnings improvement, and cash generation.
Conservative Forecasting: Adopting a conservative approach to 2026 outlook with an adjusted EBITDA floor of $310 million, excluding several potential upsides.
Focus on Core Businesses: Used RV sales, Good Sam, and service businesses remain the bedrock of the company, targeting a mid-cycle adjusted EBITDA of $500 million.
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Risk or Challenges
Consumer Sentiment and Labor Market Unevenness: The company anticipates entering 2026 with uneven consumer sentiment and labor markets, which could impact demand and overall business performance.
OEM New Pricing Increases: Rising prices for new RV models could lead to resistance from consumers, potentially affecting new RV sales.
Conservative Cash Flow Expectations: The company is setting conservative cash flow expectations for 2026, which may indicate potential challenges in achieving higher financial performance.
Dependence on Used RV Sales: The company relies heavily on used RV sales as a differentiator, which could pose a risk if the used RV market underperforms.
Dealership Acquisition Uncertainty: While there is potential for growth through dealership acquisitions, no M&A activity is currently embedded in the company's preliminary models, creating uncertainty in this area.
New Unit Trends Impacting Q4 2025: The company expects impacts from new unit trends in the fourth quarter of 2025, which could affect financial performance.
Lapping of Prior Year Benefits: The company will be lapping benefits from Good Sam loyalty breakage and F&I actuarial benefits experienced in Q4 of the previous year, which could create a challenging comparison for financial results.
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Guidance & Outlook
Consumer Sentiment and Market Conditions: The company anticipates entering 2026 with uneven consumer sentiment and labor markets, alongside rising OEM new pricing for like-for-like models. Despite resistance in the new RV market, the company expects another record year of combined new and used unit volume growth.
Earnings and Leverage: The company projects consecutive earnings growth in 2026 with an adjusted EBITDA floor of $310 million. This projection excludes potential upside from cost reductions, used unit sales, M&A activity, and conservative new unit forecasts. The company aims to further reduce net leverage through earnings growth and operational efficiency.
Cost Structure and Efficiency: The company identifies $15 million in additional cost reduction opportunities for 2026 through marketing technology, CRM launches, and AI implementation. These savings are not included in the preliminary models.
Used RV Sales: The company is optimistic about its used RV supply chain and expects high-single-digit growth in this segment. For every 1,000 additional used units sold, the company anticipates $6 million in adjusted EBITDA.
Dealership Acquisitions: The company sees significant potential in dealership acquisitions within the North American RV market. However, no M&A activity is currently included in the preliminary 2026 models.
New RV Market: The company is conservatively modeling the new RV market due to OEM price increases but expects potential upside from exclusive products tailored to consumer preferences and affordability.
Long-Term Objectives: The company aims to achieve a mid-cycle adjusted EBITDA target of $500 million based on its current store base, with a focus on used RV sales, Good Sam, and service businesses as core drivers.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What have you seen in September and October that indicates new RV demand is softening?
A:Matt Wagner explained that while there was some stabilization in the summer, high-single-digit declines in the new RV industry are still being observed year-over-year. Factors such as the evolving job market, uncertainty from the government shutdown, and general inflation have weighed on consumer demand. However, the used RV strategy has performed well, with strong year-over-year comps in September and October.
Q:How do price increases and interest rates impact affordability for RV buyers in 2026?
A:Matt Wagner stated that a $1,000 cost increase combined with a 50 basis point drop in interest rates would result in the same monthly payment for consumers. However, retail lending rates have not materially changed yet. Marcus Lemonis added that unpredictability around the Federal Reserve's actions and tariffs are key factors causing a conservative outlook for 2026.
Q:What is the management's view on achieving the $310 million EBITDA floor for 2026?
A:Marcus Lemonis emphasized a conservative approach due to macroeconomic uncertainties. He highlighted the focus on clean inventory and the used RV business as key drivers. Matt Wagner mentioned investments in AI and operational efficiencies as additional contributors to achieving the target.
Q:What is the market share goal for 2026, and how does management plan to achieve it?
A:Marcus Lemonis clarified that the medium-term market share goal is 15%. Matt Wagner added that a realistic goal for 2026 is to achieve another 50 to 100 basis points of market share improvement, driven by creativity in the new RV business and continued growth in the used RV segment.
Q:What is the outlook for M&A activity in 2026?
A:Brett Andress stated that the M&A pipeline supports a return to 10-plus dealership acquisitions per year, focusing initially on smaller dealerships. The goal is to ensure acquisitions are accretive to earnings and leverage.
Q:What are the expected gross margins for new and used RVs in 2026?
A:Matt Wagner projected new RV gross margins to be in the 13% to 14% range and used RV gross margins to be in the 18% to 20% range, depending on market conditions and inventory levels.
Q:What is the impact of price increases by OEMs for model year 2026?
A:Matt Wagner stated that OEMs have pushed through 5% to 7% price increases for model year 2026 on a like-for-like basis. Marcus Lemonis noted that these increases could bolster the value of used units and help meet customer affordability needs.
Q:What is the management's strategy for the used RV business?
A:Marcus Lemonis highlighted the structural shift towards the used RV business to reduce earnings volatility. The used RV market is double the size of the new market, and management plans to allocate more working capital to this segment to achieve high-single to low-double-digit growth annually.
Q:What is the outlook for parts and service (P&S) revenue?
A:Tom Kirn explained that technician time has been reallocated to reconditioning used units, impacting P&S revenue. However, management is optimistic about growth opportunities through AI, online marketplaces, and partnerships with major RV aftermarket suppliers.
Q:What is the status of the Good Sam Club membership?
A:Matt Wagner noted that the Good Sam Club has introduced a free tier, adding nearly 1 million members not included in paid membership numbers. The program has stabilized, and management expects to see gains in membership moving forward.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on the bands of new RV retail demand for 2026, citing macroeconomic uncertainties and unpredictability around Federal Reserve actions and tariffs. Additionally, they did not provide detailed updates on the Good Sam Club's financial impact or specific metrics for AI-driven cost savings.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI portion
ASPs decline
ASPs remainder
Act Chief
America sale
Andress Senior
Brett Andress
CRMs implementation
Consumers model
Corporate Development
Development Chief
Officer Brett
President Chief
RV market
RV sale
Senior Vice
Vice President
Wagner
activity
benefit
cost takeout
dealership acquisition
leverage
market OEM
opportunity
outlook
record volume
rooftop
sale service
service business
source
track record
unit upside
unit volume
CWH Transcript
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The company's earnings call presents a mixed picture. While there are positive aspects like the anticipation of record growth in used RV sales and a focus on dealership acquisitions, uncertainties exist due to uneven consumer sentiment and rising OEM prices. The Q&A reveals cautious optimism with potential partnerships and increased gas revenues, but also highlights risks like geological challenges and dropping reserves. The financial metrics are stable, but not overly impressive, leading to a neutral sentiment prediction for the stock price over the next two weeks.
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The earnings call indicates several challenges: a significant loss increase, margin pressures, and a downward revision in EBITDA guidance. The Q&A highlighted uncertainties in recovering lost sales and mixed demand signals. The decision to pause dividends for debt repayment further suggests financial strain. While there are some positive strategic moves like improving inventory turnover and strong liquidity, the overall sentiment leans negative due to the financial losses and cautious outlook.
Camping World Holdings, Inc. (CWH) Q3 2025 Earnings Call Transcript
Positive10-29
The company demonstrated strong financial performance with a 40% growth in EBITDA and improved SG&A efficiency. The focus on the used RV market, which is performing well, and strategic investments in AI and operational efficiencies position the company for future growth. Despite some macroeconomic uncertainties, the management's strategy and the potential for M&A activity provide a positive outlook. The Q&A section highlighted a conservative yet optimistic approach, with management addressing concerns and focusing on growth drivers. Overall, the sentiment is positive with a focus on long-term profitability.
CWH Report
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