Camping World Holdings, Inc. Q3 FY2025 earnings call

• Marcus Lemonis emphasized the mandate to improve revenue, earnings, and net leverage, noting adjusted EBITDA growth and record year-to-date volume. He highlighted the focus on deleveraging through performance, efficiency, and sales. • Matt Wagner discussed upside opportunities from SG&A cost takeouts, used RV sales, dealership acquisitions, and new RV sales. He mentioned $15 million in additional cost takeout opportunities via marketing tech and AI, and potential upside in used RV sales and dealership acquisitions. • Tom Kirn detailed revenue, ASPs, gross profit, and laps in the fourth quarter such as one-time benefits on Good Sam Club and F&I actuarial estimates.

For the third quarter, Camping World Holdings recorded revenue of over $1.8 billion, a 5% increase. Adjusted EBITDA grew by over 40% to $95.7 million. Used unit volume increased by over 30%. New ASPs were just under $38,000, a 9% year-over-year decline but better than initial expectations. Good Sam continued to post top-line growth, and product services and other had stable margins. Revenue contribution details: Used unit volume growth was a key driver, with new ASPs impacting gross margin percentages but GPU performance was pleasing.

• Management set a conservative adjusted EBITDA floor of around $310 million for 2026. • Upside potential exists from $15 million in additional SG&A cost takeouts via marketing tech and AI, $6 million of adjusted EBITDA for every 1,000 additional used units sold, potential in dealership acquisitions, and possible upside in new RV sales despite conservative modeling.

• Macroeconomic uncertainties, including unpredictability in the economy and potential government actions, which impact business forecasting. • OEM new pricing increases weighing on new RV demand. • Retail lending rate changes that could affect consumer affordability. • Potential inventory issues if new sales forecasts are miscalculated, as it's hard to liquidate miscalculated inventory.

Q: Joe Altobello asked about new RV demand and stabilization.

A: Matt Wagner responded that new RV industry is still seeing year-over-year declines, with factors like evolving job market, government shutdown, and inflation affecting consumer demand, but used RV sales remain strong.

Q: James Hardiman inquired about 2026 guidance and leverage.

A: Marcus Lemonis stated a conservative approach with a $310 million EBITDA floor, and the goal to get net leverage below 4 by end of 2026 through strategic capital allocation.

Q: Charles Scholes asked about market share and M&A.

A: Marcus Lemonis and Matt Wagner discussed market share targets of 15% and potential M&A with focus on accretive acquisitions in the smaller dealership space.

Q: Craig Kennison asked about OEM price increases and contract manufacturing.

A: Matt Wagner said OEMs have pushed 5%-7% price increases on a like-for-like basis, and the company is leaning more into contract manufacturing for 2026 to keep prices in check.

Q: Noah Zatzkin asked about new gross margins and M&A.

A: Matt Wagner explained new gross margins were softer due to mix, and Brett Andress discussed M&A pipeline with focus on smaller, accretive deals.

Q: Tristan Thomas-Martin asked about new and used margins for 2026.

A: Matt Wagner anticipated new margins in the 13%-14% range and used margins in the 18%-20% range.

Q: Scott Stember asked about financing and credit profile.

A: Brett Andress said retail lending rates are set to come down, and credit profile of consumers has been stable.

Q: Patrick Buckley asked about Good Sam Club and P&S.

A: Matt Wagner and Thomas Kirn discussed Good Sam Club membership stabilization with a free tier and P&S business resilience despite macro pressures.