Camping World fooled Wall Street analysts – and not in a good way. The company released its second quarter 2024 report last night after the U.S. market closed. That Camping World’s financial report disappoints investors is an understatement. Still, company management is putting a positive spin on the report.
Camping World’s financial report fools analysts
Before the report, five major Wall Street analysts had predicted earnings of 54 cents per share. Instead, they posted at 38 cents, nearly 35% less than projected. Getting to that disappointing figure was partially by way of revenue. Again, market analysts proved poor prognosticators. Before the report, expected revenue was $1.88 billion. The reported reality was $1.81 billion, nearly 4% off expectations.
The reaction to the quarterly report turned up quickly. Shortly after noon today, August 1, the value of Camping World stock fell more than 6% from opening.
Lifts from Camping World’s financial report
Camping World’s net income was $23.4 million for the second quarter of 2024, a decrease of $41.3 million, or 63.8%. Gross profit was $547.7 million, a decrease of $23.4 million, or 4.1%. Total gross margin was 30.3%, an increase of 27 basis points.
The silver lining in Camping World’s bottom line came from sales of new RVs. New vehicle revenue was $847.1 million for the second quarter, an increase of $46.2 million, or 5.8%. New vehicle unit sales were 22,084 units, an increase of 3,187 units, or 16.9%. At the same time, the average selling price of new units dropped 9.5%. The report says this was “driven primarily by lower cost of 2024 model year travel trailers and discounting of pre-2024 model year new vehicles.”
On the used RV side, things weren’t as perky. Used vehicle revenue was $480.8 million for the second quarter, a decrease of $142.2 million, or 22.8%. Used vehicle unit sales were 15,700 units, a decrease of 2,074 units, or 11.7%. The average selling price of used vehicles dumped 12.6%. Camping World says this was “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.”
Skeptics, or perhaps realists, among RVers might say that Camping World, and the industry in general, is finally waking up and smelling the coffee. RV buyers are unwilling to be stiffed by unrealistic prices and are voting with their feet … away from higher-priced units.
Lemonis’ march to world domination—How’s that working out?
Marcus Lemonis reiterated in January his dream of Camping World being the dominant U.S. retailer. “We continue to be focused on our goal to increase our dealership count to over 320 locations over the next five years,” was his optimistic statement. As noted earlier this week, not everyone is willing to support that goal. With several dealerships recently backing out of take-over deals, just how did the numbers crunch in this second quarter report?
Camping World now boasts 215 locations as of June 30, 2024. That’s an upturn of 12 stores in the last full year, a 5.9% uptick. Number of new stores to reach goal? 105. If Lemonis keeps adding stores at the rate he’s done in the last 12 months, it won’t be until at least 2032 for that to happen—not in 2029, as “The Profit” touts.
Positive face, yet puzzling comment
Lemonis and company continue to put a positive face on the second quarter situation. “Our record new unit market share was a direct result of listening to the consumer and their mandate for affordability,” he tells investors. “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.”
Lemonis concluding comment in the report did leave a question. “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.”
“The optimization of underperforming locations”? It will be interesting to see just how that plays out. For employees, does being optimized mean a pink slip? Could RV buyers see a tougher stance when talking prices, or a dressing-down on trade-in values? Could “optimization” even mean a reduction in the number of those stores marching toward the “320 locations in five years”?
Time will tell.
You can read Camping World’s entire financial report by clicking here.
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Lemons sees an opportunity to sell cheap (junk) units now to increase bottom line? I wouldn’t buy TP from CW and only as a very, very last resort have any work done there. Lemonis has created his own issues through greed.
Looks like things are finally catching up with CW and Lemonis. People are tired of being screwed over. He may have to buy a smaller yacht!
Here is why numbers are down. Today I again call a CW to make a service appt. For service work under an extended warranty. I bought it from CW Operator said, “ service Dept is too busy call back later”. Giving my name and number wondering when they will call back? All I want to do is get scheduled for a slot. At this point maybe after Christmas, then who knows how long to get fixed. Now go figure why numbers down…….
Thank you, Russ and Tina! 🙂 Usually “optimization” means “retrenching” operations. I doubt that Camping World eliminates any of their lines of business –selling RVs, selling RV parts and accessories, and servicing and repairing RVs. So, that leaves closing stores. Redundancy of Gander Mountain and Camping World stores in the same areas seem likely candidates to close. Maybe they also reduce their in-store people to little more than cashiers. Or are they there already? I don’t patronize their stores. Thanks again, have a great day, safe travels, and safe stays! 🙂
“Our record new unit market share was a direct result of listening to the consumer and their mandate for affordability,” -?
What about the elephant in the living room? Poor RV quality, poor repair skills, and excessive repair delays. Hey Lemonis, fix what ya got!
This guy puts the “lemon” in Lemonis!