Camping World Holdings, Inc. Q1 FY2026 earnings call

Priorities - Growing new and used unit share: New unit sales outpaced industry, with new fifth wheel up nearly 10% YTD. Used industry grew in six of last eight months through February, but same-store used sales down 2.6% in Q1 due to weather. - Driving SG&A efficiency: Reduced SG&A by over $29 million (7.5%) Y/Y, improved SG&A as % of gross profit by 135 basis points. Includes $19 million compensation reduction and consolidation of 13 store locations. Executed ~$10 million additional annualized cost rationalization, year-to-date total ~$35 million. AI initiatives expected to drive cost takeout, especially in IT spend. - Accelerating good sales: GoodSAM made progress with top line growth and margin stabilization. ERP overhaul for GoodSAM to be completed in Q2, custom CRM for extended service plan business deployed with early signs of productivity. ### Other - First full quarter as CEO for Matt Wagner, proud of team's accomplishments in taking share, reducing costs, and strengthening balance sheet.

New unit sales outpaced the industry. New fifth wheel segment up nearly 10% YTD driven by private label products. Used same-store sales down 2.6% in Q1 due to weather disruptions, but new and used volume improved in March and April. Total same-store RV unit inventory down over 10% Y/Y as of April. New model year 2025 inventory at ~8% of total new inventory, down over 50% Y/Y. GoodSAM had top line growth and stabilized margins to roughly flat Y/Y. Revenue for Q1 was $1.35 billion. New vehicle average selling prices up ~4% Y/Y. New vehicle growth margin declined 148 basis points to 12.2%, used vehicle gross margin declined 91 basis points to 17.7%. Good Sam gross margin improved sequentially from Q4.

Full year 2026 adjusted EBITDA guidance range remains $275 million to $325 million. New RV industry likely tracking towards lower end of 2026 retail outlook (325,000 - 350,000 units). Used RV industry likely playing out towards midpoint of range (715,000 - 750,000 units). Expect gross margin trend to continue through Q2 then improve later in 2026. Good Sam margins expected to show Y/Y improvements through balance of year.

Q: On the F&I per unit, it looked like a pretty healthy step up. Could you talk a bit more about the dynamics there and what drove that and maybe the outlook moving forward?

A: Historically, average sale price up leads to F&I penetration down a bit, but recent dynamics show consumers buying more expensive assets have higher down payment and higher product attachment. Consumers buying lower priced assets also have higher product attachment. K-shaped economy forms, and higher average sale price customers are more willing to protect assets.

Q: On the recent used value trends, a bit of a decrease in ASPs. I guess, is there anything notable driving that? And a bit of a follow-up there. We have seen some headlines on negative equity value in light vehicles and cars. Are you seeing any trends like that in your customers?

A: Not seeing negative equity trend amplified like automotive industry. Q1 is volatile, and ASP decrease was immaterial. Stabilization expected in Q2, Q3, with used ASPs expected to land in $31,500 range.

Q: Congrats on a strong quarter given a lot of moving pieces, a lot of curveballs thrown at you guys. And maybe along those lines, obviously rough weather to start the year. And then just as the weather seems to be getting a little bit better, you know, war started in the Middle East. So maybe walk us through some of what you saw over the course of the quarter and beyond to help us discern, you know, the weather impact from the Middle East impact um and how you're thinking about that going forward were it not for the middle east situation do you think you'd be raising today.

A: Entered year with great show season, but January-February weather caused over 60 stores to close for at least a day, missing ~1,500 unit sales. March was choppy but started to stabilize in March and April, trending positive on same-store basis new and used combined. Weather was a big disruption, but overall weathered volatile environment well. Guidance still reiterated as nothing changed.

Q: Your questions on the inventory initiatives, you know, you've talked about taking turns on new and used up by roughly, I think, a half a turn or so by the end of this year. Is that still your target? Is the bulk of that going to be done by the end of the second quarter ahead of the model year changeover, or do you think some of that spills over into the second half? And is the hit on that EBITDA still around $35 million?

A: Turnover goals are annualized. Progress will be made throughout Q2 on inventory rationalization, especially on new 2025 units and used inventory. Q2 and balance of year will see efforts on replenishment and balancing inventory. EBITDA hit still around $35 million.

Q: Costco partnership, curious how that's going and maybe what we could see from an EBITDA contribution since I believe that's not in your guidance at this point.

A: Partnership started slower than preferred. Worked with Costco to recreate online product listings, pricing algorithm. Warehouse roadshow to begin in May, coinciding with seasonally strong months. Hopeful for good feedback in next three months.

Q: Early in the year, we were hearing quite a bit about kind of like the pre-COVID cohort coming back and trading. And so I'm curious if you can maybe, one, is that true? Can you quantify it and maybe how did that trend over the course of the quarter?

A: Early in year, material increase in trade-in percentages not yet seen. Consumers from 2018-2021 time period starting to come back, evidenced by average model year of assets in inventory. Anticipate by end of year to be in early innings of trading cycle that will materialize more in next three to five years.

Q: Given all the talk around kind of raw material and inflation, how are you thinking about model year 27 pricing, both like for like and then kind of your mix?

A: 2026 has seen ~5%-7% increase vs 2025. Model year 2027 motorized units have ~1-2% price increase so far. Anticipate price increases for 2027 to be 1%-3% based on conversations. Hopeful to work with manufacturing partners to keep prices affordable.

Q: Can we talk about the products and parts and service side? I know the narrative, you know, the last year, year and a half has been prioritizing, you know, used reconditioning work over, you know, some of the more like warranty and customer pay work just because of what's available from a service based perspective. Is there any change to that narrative going forward, particularly as you know, the wear and tear cycle on these, you know, multiple millions of RVs that have been sold since the pandemic starts to kick in over the next year?

A: Narrative remains relatively same, used reconditioning drives service needs. Parts component has seen improvement, but need to do better in getting customers to leverage service capacity. Focus on back half of year into next year to grow external service work.

Q: Balance sheet. Nice improvement on the leverage ratio. It looks like cash flow in the first quarter was up nicely over last year. Can you give us some expectations where you would expect maybe free cash flow to find its way by the end of the year as well as the leverage ratio?

A: Goal for this year is net capex south of $100 million. Free cash flow related to adjusted EBITDA guidance, backing out interest, real estate interest, and cash taxes. Leverage ratio expected to continue improving as debt is paid down.

Q: SG&A. You clearly got off on the right foot here to start the year. The way we look at it, it's been running just over $1.5 billion for each of the past five years or so, I guess when we exclude stock comp. Do you think you can flex below that, or can you maybe give us a little bit more insight into how you think about the opportunity within that line item?

A: Not giving specific range yet. Heavily invested in AI research, set up teams to optimize SaaS environments and eliminate unnecessary consulting contracts. Example of creating bespoke CRM for extended service plan business, which was done with sweat equity and will have lower maintenance costs.

Q: CapEx question this year, but I guess how should we think about that maybe over the next three years once you exclude any SLDs that you do? And I guess on that note, how can you improve maybe your EBITDA to free cash flow conversion over time?

A: Goal for this year is net capex south of $100 million, with maintenance CapEx closer to $75 million. Maintenance CapEx and real estate related CapEx will vary year to year. EBITDA to free cash flow conversion will improve through managing capex and optimizing operations.

Q: On the kind of March and April commentary, It would appear that your comments kind of point to meaningful share gains versus at least what we're hearing from others out there in terms of how the industry kind of trended in March and April. So I guess first, is your sense that that's the right way to think about it? And if it is, what do you think kind of led to the share gain acceleration?

A: Believe there has been significant outperformance based on January-February results. Attributable to replenishment and inventory strategy associated with exclusive brands. Exclusive travel trailer brands up over 20% Y/Y in April.

Q: Any sense for kind of industry inventory levels right now? Anything in terms of what you're seeing on promo from others?

A: Difficult to get exact insights into industry inventory levels due to wholesalers and rental units. But see promotional environment in industry, which is why approach to inventory and pricing is pragmatic.

Q: On the credit environment more broadly from a consumer financing perspective.

A: Not seen different behaviors in credit profile or approval rates. Working effectively with lenders. Consumer lending pricing has started to drift down in recent weeks.