Camping World Holdings, Inc. Reports Second Quarter 2024 Results with Record New Unit Market Share, Selling Over 22,000 New RVs, up 17% Year-Over-Year, Company Sees Meaningful New Same Store Volume Acceleration in June and July

Camping World Holdings, Inc. (NYSE:CWH) (the "Company" or "CWH"), America's Recreation Dealer, today reported results for the second quarter ended June 30, 2024.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, "Our record new unit market share was a direct result of listening to the consumer and their mandate for affordability. We saw year-over-year same store new vehicle unit growth accelerate into the mid-teens in June and into the low-twenties in July, positioning our Company for a strong 2025."

Matt Wagner, President of Camping World Holdings, Inc. commented, "As we prepare for an improved 2025, our unwavering philosophy is to remain disciplined around used aging and stocking levels, regardless of the macro environment. Over the last 30 days, we have begun to thoughtfully ramp up our used stocking levels, with year-over-year increases for the first time in over 10 months and a record volume of consignments. We have proceeded judiciously on mitigating used inventory risk which will keep pressure on used vehicle margins and volume in the second half."

Mr. Lemonis concluded, "We are unbelievably encouraged by our new vehicle performance over the last several months, but especially the last 60 days. However, we are not naive about the macroeconomic environment around us, and we are taking a more aggressive position around our cost structure and the optimization of underperforming locations."

Second Quarter-over-Quarter Operating Highlights

• The total number of our store locations was 215 as of June 30, 2024, a net increase of 12 store locations from June 30, 2023, or 5.9%.
• Revenue was $1.8 billion for the second quarter, a decrease of $94.2 million, or 5.0%.
• New vehicle revenue was $847.1 million for the second quarter, an increase of $46.2 million, or 5.8%, and new vehicle unit sales were 22,084 units, an increase of 3,187 units, or 16.9%. Used vehicle revenue was $480.8 million for the second quarter, a decrease of $142.2 million, or 22.8%, and used vehicle unit sales were 15,700 units, a decrease of 2,074 units, or 11.7%. Combined new and used vehicle units sales were 37,784, an increase of 1,113 units, or 3.0%.
• Average selling price of new vehicles declined 9.5% during the second quarter driven primarily by lower cost of 2024 model year travel trailers and discounting of pre-2024 model year new vehicles.
• Average selling price of used vehicles declined 12.6% during the second quarter due to discounting of used vehicles in response to declines in new vehicle prices to maintain used vehicles as a lower cost alternative to new vehicles.
• Same store new vehicle unit sales increased 9.7% for the second quarter and same store used vehicle unit sales decreased 17.0%.
• Products, services and other revenue was $235.9 million, a decline of $11.8 million, or 4.8%, driven largely by a reduction in sales activity resulting from our Active Sports Restructuring and fewer used vehicles sold led to a decline in retail product attachment to vehicle sales, partially offset by increases in RV service revenue.
• Gross profit was $547.7 million, a decrease of $23.4 million, or 4.1%, and total gross margin was 30.3%, an increase of 27 basis points. The gross profit decline was mainly due to the 5.0% decrease in revenue discussed above, which was partially offset by the increase in gross margin. The gross margin increase included a 543 basis point improvement in products, service and other gross margin, from higher labor billing rates on warranty service, the sale of our RV furniture business, improvements to the pricing for aftermarket accessories, and prior year incremental inventory reserve charges of $2.6 million relating to the Active Sports Restructuring that were not recurring in 2024. This gross margin increase was partially offset by a 392 basis point decrease in used vehicles gross margin, which was driven by the decrease in average selling price of used vehicles that was partially offset by a decrease in the average cost of used vehicles sold.
• Selling, general and administrative expenses ("SG&A") were $419.7 million, a decrease of $1.2 million, or 0.3%. SG&A Excluding Equity-based Compensation⁽¹⁾ was relatively unchanged at $414.4 million, a decrease of $0.2 million, or 0.1%, which was driven by $6.7 million reduced employee compensation costs and $5.8 million of reduced professional fees and services, which was partially offset by $11.8 million of additional advertising expenses.
• Floor plan interest expense was $27.8 million, an increase of $7.1 million, or 34.5%, and other interest expense, net was $36.2 million, an increase of $2.6 million, or 7.9%. These increases were primarily as a result of the rise in interest rates and higher principal balances.
• Net income was $23.4 million for the second quarter of 2024, a decrease of $41.3 million, or 63.8%.
• Diluted earnings per share of Class A common stock was $0.22 for the second quarter of 2024 versus diluted earnings per share of Class A common stock of $0.64 for the second quarter of 2023. Adjusted earnings per share - diluted⁽¹⁾ of Class A common stock was $0.38 for the second quarter of 2024 versus adjusted earnings per share – diluted⁽¹⁾ of Class A common stock of $0.73 for the second quarter of 2023.
• Adjusted EBITDA⁽¹⁾ was $105.6 million, a decrease of $33.7 million, or 24.2%, primarily due to $23.4 million decrease in gross profit, and the $7.1 million increase in floor plan interest.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company's second quarter 2024 financial results is scheduled for August 1, 2024, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-844-826-3035 (international callers please dial 1-412-317-5195) and using conference ID# 10190122. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company's website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP"), unless noted as a non-GAAP financial measure. The Company's initial public offering ("IPO") and related reorganization transactions ("Reorganization Transactions") that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC ("CWGS, LLC"), with sole voting power in and control of the management of CWGS, LLC. The Company's position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of June 30, 2024, the Company owned 53.0% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results for the second quarter ended June 30, 2024 to our financial results from the second quarter ended June 30, 2023.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is the world's largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy. Our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry's most extensive online presence and a highly trained and knowledgeable team of employees serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 43 states, Camping World has grown to become the prime destination for everything RV. For more information, visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about our intention with regards to used aging and stocking levels, our cost management actions, our investments, our expectations regarding improvements in our business, macroeconomic and industry trends, business plans and goals, and future financial results and position, including vehicle margins and volume, in each case on any specific timeline or at all. These forward-looking statements are based on management's current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: general economic conditions, including inflation and interest rates; the availability of financing to us and our customers; fuel shortages, high prices for fuel or changes in energy sources; the success of our manufacturers; changes in consumer preferences; risks related to our strategic review of our Good Sam business; competition in our industry; risks related to acquisitions, new store openings and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; risks related to COVID-19; our ability to execute and achieve the expected benefits of our cost cutting or restructuring initiatives; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; our dependence on our relationships with third party suppliers and lending institutions; risks associated with selling goods manufactured abroad; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; risks associated with our private brand offerings; we may incur asset impairment charges for goodwill, intangible assets or other long-lived assets; tax risks; our private brand offerings exposing us to various risks; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; risks related to climate change and other environmental, social and governance matters; and risks related to our organizational structure.

These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10‑K for the year ended December 31, 2023 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Future declarations of quarterly dividends, if any, are subject to the determination and discretion of the Company's Board of Directors based on its consideration of various factors, including the Company's results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from CWGS Enterprises, LLC, its business prospects and other factors that the Company's Board of Directors may deem relevant.

We intend to use our official Facebook, X (formerly known as Twitter), and Instagram accounts, each at the handle @CampingWorld, as well as the investor page of our website, investor.campingworld.com, as a distribution channel of material information about the Company and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels and on our investor webpage may be deemed material. Accordingly, investors should subscribe to these accounts and our investor alerts, in addition to following our press releases, SEC filings, public conference calls and webcasts. These social media channels may be updated from time to time.

Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods

New vehicle gross margins in the second quarter of 2024 were relatively similar to second quarter of 2023 and slightly above the range of gross margins for the pre-COVID-19 pandemic periods presented in the table below. Additionally, used vehicle gross margins were negatively impacted in the second quarter of 2024 from the discounting necessary to maintain used vehicles as a lower cost alternative for our customers. Beginning primarily in the fourth quarter of 2023, we adjusted our acceptable procurement cost of used vehicles to reflect the lower average market price of RVs that was driven by the lower cost 2024 models.

The following table presents vehicle gross margin and unit sales mix for the three months ended June 30, 2024 and pre-COVID-19 pandemic periods for the three months ended June 30, 2019, 2018, 2017, and 2016 (unaudited):

Earnings (Loss) Per Share

Basic earnings (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock (unaudited):