Some thoughts about Camping World

31

By Chuck Woodbury
Camping World announced its fourth quarter and 2018 yearly earnings on Friday. A day earlier it conducted a conference call with its investors. CEO Marcus Lemonis and other Camping World Holdings, Inc./Good Sam executives provided updates on the business. Read the complete earnings report and conference call if you wish.

Here is some of what I found interesting.

Camping World Holdings Inc. reported that revenue increased 10.6% to $982.4 million during its fourth quarter, ended Dec. 31, while the company incurred a net loss of $43 million during the period.

According to Lemonis, the company sold 104,296 RVs in 2018, which was up from 97,063 the year before. Think about that — more than 100,000 of the approximately 500,000 RVs sold that year were sold by Camping World — for the non-mathematicians in the crowd that’s one out of five RVs.

The average selling price of a new RV was $32,542. Gross profit per vehicle sold including finance and insurance was $8,487.

The company added 78,189 Good Sam Club members in the fourth quarter 2018 and membership increased 16.7% year over year to an all-time-high of 2.1 million members.

At Dec. 31, 2018, Camping World Holdings operated 212 retail locations including 128 Camping World RV product, parts and accessory stores; 60 Gander Outdoors stores; and 24 other specialty stores.

Camping World’s stock Friday closed at $12.92, which was down almost 70% from this time last year.

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Captn John
1 year ago

“Camping World’s stock Friday closed at $12.92, which was down almost 70% from this time last year.” CW stock IMO is not one to hold but to trade. I bought soon after the IPO and sold with a 40% gain. I’m a buyer again if/WHEN it goes under $10. When the next recession hits it will go down much lower than that is my guess. In the mean time~ trade.

Bruce Maass
1 year ago

Observations: I have also wondered at the large inventories we see all across the country at CW and other large retailers. Even with half a million sales per year, there is carryover inventory, end of year sales prices, and all the economic folly that the automotive industry has brought upon itself for years. Over production does mean that workers are kept on the job, out source suppliers keep spitting out cabinetry, pumps, tanks, major components and doodads. OK, fine, I get economics. But, that means their will be on the lot competition between 2018 and 2019 models, a reduced market for used RVs because a new year old model will often cost less than a year old trade in will bring. The industry could use some scarcity, a little competition to get that RV we want. At the RV show in Jax, Florida this year, the “RV Show Sales Price” was as usual 30-40% below MSRP. If someone did buy near MSRP last year and wants more slides, 2 feet longer or whatever this year, he or she will lose a bundle (I consider 30-40% of anything a bundle). We wanted another RV for music festivals, a light bumper tow trailer. We shopped CW who quoted an MSRP of $22K and their price of $19,700. I shopped RV Trader and found the 2019 trailer for $17,500, $15,700, $14,500, and finally $12,930. Exact same trailer! So, we drove 600 miles to Ohio, bought it and towed it home. Look at the price disparity. Now, this was a small purchase but extrapolate those price differences over the range of RVs from $10k to $1.5 million or so. How could I expect to sell or trade any couple year old RV that I paid in the upper ranges to get and hope to break even on a long term loan when a shopper could find a brand new one for way less than I owe after a couple years of a 15 or 20 year note? Good economics for all of us would be to match the number of RVs produced to the likely number to be purchased. This would push the used RV market upward. Simple numbers: if their are 300 million of us in the U.S. and expected sales are 500 thousand a year, does that means 1 in 600 of us is anticipated to buy a new RV? Or is my math somehow really skewed??

Captain Quirk
1 year ago
Reply to  Bruce Maass

I’m not really sure what your point is. If it’s that there is overproduction in the RV industry, how is that a problem (unless you’re a manufacturer or seller)? Clearly it has benefited you, since you were able to get a trailer with an MSRP of $22K for $12,930.

It sounds like you are complaining about the plight of buyers who paid nearly full MSRP for their rigs, but as you demonstrated yourself, that can be avoided by a little shopping around. Frankly, anyone who pays full MSRP is a fool.

“Good economics for all of us would be to match the number of RVs produced to the likely number to be purchased. This would push the used RV market upward.”

It would push both the used AND new RV market upward. How is that “good economics for all of us”? It’s only good economics for manufacturers and retailers. Not for consumers.

Dry Creek
1 year ago

OK, for some reason the numbers just don’t add up.
When you buy an RV from CW, don’t they give you some type of Super Duper membership for one year? If they sold 104K units, but only netted 78K *new* members, does that imply that nearly 20K *current* members bought new units?

George Sears
1 year ago

I followed the link to the conference call. In a way Mr. Lemonis is very honest…

Camping World takes a $25,000 RV and when the customer drives off the lot CW has booked $33,000. They make $8500 in gross profit per unit. These are all averages. It’s no wonder that people are way underwater from the outset. There is no way to recover the $8500 you pay. I bought a TT online in 2010 for $12k. The dealer made some money, but nothing like that. Now the quality is so low you can’t just buy online.

There are two segments to the industry. The people who make the RV’s and supply them to dealers, and the dealers. CW is 1/5th of the dealer industry. They are huge. And Lemonis is frank about what he wants from the other side of the industry:

“Number one, you don’t get yourself in inventory trouble. I believe that as an industry, we got ourselves in trouble and that cost us dearly by having to liquidate that inventory. I think that’s step one. I think step two is we have to be more opportunistic and more strategic about what we’re buying on the new side and partner with manufacturers that are focused on turns and margins and not anything else. We think Thor, Winnebago, and Forest River are those companies.”

If you want higher quality or different designs, that isn’t what CW wants. They want stuff that moves and they want it at low margins. That’s all they want, ‘not anything else’. I don’t see how a small dealer can exert much pressure on ThoBerWin.

It’s interesting what Lemonis says about Gander. He wants to ‘bifurcate’ Gander. I guess that means Gander will look like a standalone operation, almost like a competitor to CW, another option. But, not really, since CW owns both.

The companies CW can ‘work with’, Thor, WGO, and Forest, throw out dozens of brands, but there are still only 3 manufacturers in that mix. Does Flagstaff really compete with Surveyor? So Gander and CW will be fake competition, and all the brands of Thor and FR will be more fake competition?

One last Marcus Lemonis quote:

“Our comprehensive network of assets and offerings allows us to engage with consumers in a variety of ways. We’re continuously developing ways to widen our customer funnel and increase our share of wallets across the RV and outdoor sector.”

This is not a customer focused business. I guess people should read the conference calls to understand exactly what motivates Lemonis. He has a lot of stock. If it goes way up, he makes billions. So you have one guy with a very narrow focus, apparently.

Carson Axtell
1 year ago
Reply to  George Sears

As with so much else these days, the American RV industry thrives on the ignorance of its citizen consumers and therefore can afford NOT to be concerned about its reputation the way European manufacturers still seem to be. It’s all about “caveat emptor” and duping the customer out of his/her money…

Charles
1 year ago

Whatever happened to the promised conversation between Chuck and Marcus?

Dick Hime
1 year ago
Reply to  Chuck Woodbury

Chuck, I agree regarding a “Marcus one-on-one” conversation. It’s much like people who like to debate politics on social media. When you choose to mud wrestle with a pig, you eventually figure out the pig is enjoying it.

Charles
1 year ago
Reply to  Chuck Woodbury

I understand–thanks for your reply.

Captn John
1 year ago
Reply to  Chuck Woodbury

I don’t defend Marcus as he can defend himself if/when he feels the need. He runs his company as how he wishes. If he has something to say he can do it here and has any other avenues as well. I see few to no RV dealers doing anything different than he.
CW RV sales can be done on a very low margin. Cash comes from the financing add on IF people want them. That is great for the consumer that educates him/herself. That is not so great for the competition. Not so great for the sales staff either. The new commission rates sent many to other industries this year.
Although often the highest labor rates (currently not now as any install is only $59) the labor is contracted, not CW employees. Every CW location is different and the 2 local to me are better than all the rest, usually bottom line is less as well.
I have been past several CW locations the past few months. Inventory seems higher than ever in every price range. I have been told RV sales are way down YTD, a bit over 40% at one location.
I have found nothing as comfortable as my current 2017 43′ 5er. However, in the next few years I believe there will be a huge correction in RV prices. Enough of a correction I’m looking to keeping the 5er for trips of a month or more and a DP of 1-2 years old for short term travels. I’m expecting a real bargain!

sheryl Kinney
1 year ago

After this past year, I am no longer a fan of Camping World. Two people I know bought new campers, one was a very high end toy hauler. The trim fell off in various places and they refused to fix it under warranty. The other was a moderately priced bumper hitch. The slide seal leaks, they only used it twice. The slide out and floor are ruined. Again, no warranty coverage. Both had extended warranties and were less than a year old. This is not good for business, so perhaps they sell them and they get returned.

Richard (Dick) Fleming
1 year ago
Reply to  sheryl Kinney

I purchased a small RV from CW. The refrigerator was defective and did not work from the day I bought it. After 7 months of trying to get it fixed, I was told (by the GM) that I was on my own to get it fixed. A quick phone call to Norcold and “poof” I got the defective one replaced with a new unit that worked just fine. The problem was that CW (while trying to fix issues) had left a part off. Lazy Days does a much better job at customer service!

Terry Huggins
1 year ago

CW sucks and are crooks and liars! I read the horror stories about CW and would never had bought from them, but they had the only model my wife just had to have. We lost our “luxury” (ha, ha) toy hauler in the Camp Fire along with everything we owned. Ended up buying a new diesel pusher motorhome from La Mesa RV and let me tell you they are a 1,000 times better than CW ever thought of being! Ya, the brand new Fleetwood motorhome has it’s problems like they all do, but these guys at La Mesa have been great since the get go and that includes the 3 we have been to for repairs. Why 3, well it’s more a Fleetwood issue having to keep approving parts that need replacing before they can be ordered.

Captn John
1 year ago
Reply to  sheryl Kinney

Strange, trim came loose in 2 places and was scratched in another on my 5er 10 months after delivery. CW fixed the issues and replaced the scratched piece under manufacturers warranty. Extended warranties do not usually kick in until after the manufacture warranty expires in 1 or 2 years. I believe there is more to the slide seal leak story as well.

Captn John
1 year ago

Prices at CW are the lowest by far in a long distance at the location I use. Also at THIS location it has the best service although the highest priced service most of the time but not always. Purchase and install of a washer and a dryer was hundreds less than all others.

Mark Robbins
1 year ago
Reply to  Captn John

Just about anything you can purchase at CW can be purchased at Amazon at a reduced price. I had to replace my water pump and went to CW and while in the store used my app to see what the price was through Amazon And saved $30 on one part. CW is a great place to view RV products but their markup is too steep for me.

Captain Quirk
1 year ago
Reply to  Mark Robbins

Repair shops always have a large markup on the parts they sell and install. That’s not unique to CW. If you are prepared to install it yourself, go to Amazon and knock yourself out. But if you want a repair shop — be it CW or any place else — to install a water pump, you’re gonna have to buy it from them. That’s just how it works.

If you buy a part elsewhere and give it to a repair shop to install, and the part turns out to be defective, the repair shop is not going to eat the cost of removing the defective part and reinstalling a replacement. The repair shop doesn’t want to be put in that awkward position, so they won’t install a part that you purchased somewhere else.

Captn John
1 year ago
Reply to  Mark Robbins

9 of the last 11 RV related purchases found Amazon higher and 1 equal after a fast search online.

Scott Ellis
1 year ago
Reply to  Captn John

You do have to watch. I am about to order a part for my ATV direct from the manufacturer for $190; Amazon wants $210 (both including shipping). I don’t see that a lot, but I see it more often among RV stuff than elsewhere and I see it often enough so that I usually check before I buy.

Louis P
1 year ago
Reply to  Captn John

Yes, I found the same thing. Amazon is higher priced.

Patrick Granahan
1 year ago

Whenever I drive by a Camping World location I am amazed by the massive inventory of RVs on their lots…packed in so tight it seems that it would be almost impossible to remove one for a test drive or delivery.
I must ask how can they afford to carry such a massive inventory ?
Are RV manufacturers consigning these units without Camping World investing any
funds ? The lots are always full to maximum capacity. If they are paying for that inventory the investment must be astonishing !
It does not make sense to me unless the 20 year financing plans add to their profit picture
and somehow cover the cost of the massive inventory.

Strange business plan indeed !

Robert
1 year ago

This really doesn’t make sense in light of the financial numbers which Chuck reported above. The company profit was almost a billion dollars, but they finished with a $43 million deficit. Add to that the lots crowded with RVs and you have to think — GROSS mismanagement.

Captain Quirk
1 year ago
Reply to  Robert

Just to be clear: Gross sales of nearly a billion dollars, not profit. And of course a large chunk of that is the cost of good sold. I don’t know what their gross profit* was, but maybe part of the reason why they lost money is the cost of maintaining that huge inventory. (But yeah, it does seem like the company is poorly managed. Among other things, they have a horrible reputation for customer service.)
____________________________

* Gross profit = total gross sales minus cost of goods sold, before deducting for operating costs.

Ellen
1 year ago

Don’t they have to pay inventory taxes on all those unsold units? If so, that’s a pretty penny right there…. Seems like another odd piece to this financial puzzle.

Dan Kooienga
1 year ago

It would be interesting for you to do a poll with your readers on whether they are Democrats or Republicans. Knowing what the majority is could shed some light on their perspectives. This comes to me after reading about camping world and its struggles. Most people these days, preferred to buy direct and not be strong-armed by a large middleman. Just a thought.

Howard
1 year ago
Reply to  Dan Kooienga

Am just curious to know how many “all others” Capt John got quotes from to come to the conclusion that CW was hundreds less and what part of the country he is in.

BirdsGoToo
1 year ago
Reply to  Howard

Howard, Obviously, I’m not Capt John, but I lived in the Albuquerque, NM, area and wanted to have a Saf-T-Plus stabilizer installed. There were only two options in town that could install it and CW was one of them. I do everything I can to not patronize CW due to their political stand against our president, but I couldn’t justify paying almost double for the installation of the stabilizer, which was the the option.

Captn John
1 year ago
Reply to  Howard

I’m in the SE. I had 6 quotes. One was a little less until I considered the 2400 round trip costs like diesel fuel, hotels, CGs, restaurants….

Thom
1 year ago
Reply to  Dan Kooienga

Who cares about politics….I RV as an attempt to avoid politics. Later this year, I will be going full time and will ignore everything, looking forward to meeting people and not politics!

Michael Flank
1 year ago
Reply to  Thom

I couldn’t agree more, politics has no place in the RV world. Using politics as a discussion point to analyze the mood and temperament of RVers just takes the pleasure and freedom out of RV experience.
In present day, we spend too much time analyzing and less time simply enjoying!! Our world would be a better p!ace if we could all just get along!