Camping World Holdings, Inc. Reports Third Quarter 2023 Results, Total Unit Sales of 32,330 Exceeds 2022, Rigorous Inventory Discipline and Continued Acquisitions Set Stage for Improved 2024

November 1, 2023

LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the third quarter ended September 30, 2023.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “We are laser focused on the final stages of cleansing our inventory going into 2024. These actions have come with near-term gross margin compression, but we believe now is the moment to put the finishing touches on our industry-leading inventory position and prepare the business for the next up-cycle. In 2024, we expect total company revenue, same store unit sales, total gross margin, and earnings to increase year over year.”

Third Quarter-over-Quarter Operating Highlights

Revenue was $1.7 billion for the third quarter, a decrease of $126.1 million, or 6.8%.
Used vehicle revenue was a record $590.2 million for the third quarter, an increase of $64.2 million, or 12.2%, and used vehicle unit sales were a record 17,125 units, an increase of 2,665 units, or 18.4%.
New vehicle revenue was $679.2 million for the third quarter, a decline of $154.9 million, or 18.6%, and new vehicle unit sales were 15,205 units, a decrease of 2,411 units, or 13.7%.
Average selling price of new and used vehicles declined 5.7% and 5.2%, respectively, during the third quarter. As the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, the Company actively discounted certain used vehicles during the third quarter to reduce inventory levels of aged used vehicles.
Products, service and other revenue was $235.6 million for the third quarter, a decline of $33.3 million, or 12.4%. The decrease was driven largely by lower demand and lower stocking levels of lifestyle, activities, design, and home products, as well as declines in our direct to manufacturer RV furniture revenues due to RV manufacturer production slowdowns and discounting related to our Active Sports Restructuring.
Same store used vehicle unit sales increased 10.9% for the third quarter, and same store new vehicle unit sales decreased 21.5%.
Gross profit was $523.1 million, a decrease of $70.6 million, or 11.9%. Total gross margin was 30.2%, a decrease of 175 basis points. The decrease in gross profit and gross margin was driven largely by the decrease in average selling price of new and used vehicles discussed above. The decrease in finance and insurance, net gross profit was partially offset by improved retention on finance and insurance products, which drove favorable adjustments to reserves in the third quarter of 2023. Good Sam Services and Plans gross profit and gross margin was favorably impacted by finalizing contract negotiations to exit an arrangement with a service partner in the quarter.
Selling, general and administrative expenses were $415.3 million, a decrease of $3.8 million, or 0.9%, primarily as a result of our efforts to reduce expenses. In the quarter, the Company closed two underperforming retail stores and one distribution center, whose leases were successfully terminated. These cost reductions were partially offset by additional employee compensation and facility costs resulting from the 8.3% increase in store location count to 209 at September 30, 2023 from 193 at September 30, 2022.
Subsequent to September 30, 2023, the Company made the decision to consolidate or close seven underperforming dealership locations in order to redeploy working capital to higher returning investments.
Floor plan interest expense was $19.8 million, an increase of $10.3 million, or 108.9%, and other interest expense, net was $35.2 million, an increase of $14.7 million, or 71.7%. These increases were primarily as a result of the rise in interest rates.
Net income was $30.9 million, a decrease of $72.1 million, or 70.0%, driven primarily by the pretax $71.7 million decrease in new and used vehicle gross profit, the $14.7 million increase in other interest expense, net, and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 million decrease in selling, general, and administrative expenses and lower income tax expense from net reductions of pretax income.
Diluted earnings per share of Class A common stock was $0.32 in 2023 versus diluted earnings per share of Class A common stock of $0.97 in 2022. Adjusted earnings per share – diluted⁽¹⁾ of Class A common stock was $0.39 in 2023 versus adjusted earnings per share – diluted⁽¹⁾of Class A common stock of $1.07 in 2022.
Adjusted EBITDA⁽¹⁾ was $95.0 million, a decrease of $78.4 million, or 45.2%, driven primarily by the $71.7 million decrease in new and used vehicle gross profit and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 million decrease in selling, general, and administrative expenses⁽²⁾.

________________
⁽¹⁾	Adjusted earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release.
⁽²⁾	The $3.8 million decrease in selling, general, and administrative expenses includes a $1.3 million decrease in equity-based compensation. Equity-based compensation is excluded from the calculation of Adjusted EBITDA (see the “Non-GAAP Financial Measures” section later in this press release).

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s third quarter 2023 financial results is scheduled for November 2, 2023, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13741006. 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 September 30, 2023, the Company owned 52.8% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’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, and 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 associates 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 cleansing our inventory, macroeconomic and industry trends, dividend payments and capital allocation, our business plans and goals, the Company’s acquisition pipeline and plans, and future financial results, including anticipated gross margin compression and outlook for 2024. 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 or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; 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; risks related to the cybersecurity incident announced in February 2022; 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; 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; 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 filed for the year ended December 31, 2022 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 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, 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.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands Except Per Share Amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Revenue:
Good Sam Services and Plans	$	49,889		$	50,352		$	147,294		$	144,504
RV and Outdoor Retail
New vehicles		679,207			834,112			2,126,862			2,746,323
Used vehicles		590,227			525,988			1,657,935			1,484,978
Products, service and other		235,609			268,940			691,030			761,914
Finance and insurance, net		163,630			165,136			460,336			513,921
Good Sam Club		11,051			11,154			33,757			35,070
Subtotal		1,679,724			1,805,330			4,969,920			5,542,206
Total revenue		1,729,613			1,855,682			5,117,214			5,686,710
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		10,021			18,871			43,844			54,532
RV and Outdoor Retail
New vehicles		576,480			675,119			1,811,398			2,171,660
Used vehicles		478,595			398,882			1,300,961			1,115,876
Products, service and other		139,976			167,298			422,037			467,680
Good Sam Club		1,455			1,824			3,766			6,279
Subtotal		1,196,506			1,243,123			3,538,162			3,761,495
Total costs applicable to revenue		1,206,527			1,261,994			3,582,006			3,816,027

Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		39,868			31,481			103,450			89,972
RV and Outdoor Retail:
New vehicles		102,727			158,993			315,464			574,663
Used vehicles		111,632			127,106			356,974			369,102
Products, service and other		95,633			101,642			268,993			294,234
Finance and insurance, net		163,630			165,136			460,336			513,921
Good Sam Club		9,596			9,330			29,991			28,791
Subtotal		483,218			562,207			1,431,758			1,780,711
Total gross profit		523,086			593,688			1,535,208			1,870,683

Operating expenses:
Selling, general, and administrative		415,288			419,102			1,201,901			1,245,540
Depreciation and amortization		17,619			18,207			49,462			61,369
Long-lived asset impairment		1,747			887			9,269			3,505
Lease termination		375			—			375			1,122
Loss (gain) on sale or disposal of assets		131			(40	)		(5,001	)		390
Total operating expenses		435,160			438,156			1,256,006			1,311,926
Income from operations		87,926			155,532			279,202			558,757
Other expense:
Floor plan interest expense		(19,816	)		(9,484	)		(61,298	)		(24,483	)
Other interest expense, net		(35,242	)		(20,526	)		(99,873	)		(49,762	)
Tax Receivable Agreement liability adjustment		1,680			—			1,680			—
Other income (expense), net		24			(177	)		(1,659	)		(472	)
Total other expense		(53,354	)		(30,187	)		(161,150	)		(74,717	)
Income before income taxes		34,572			125,345			118,052			484,040
Income tax expense		(3,679	)		(22,397	)		(17,533	)		(75,808	)
Net income		30,893			102,948			100,519			408,232
Less: net income attributable to non-controlling interests		(14,932	)		(61,822	)		(52,686	)		(238,065	)
Net income attributable to Camping World Holdings, Inc.	$	15,961		$	41,126		$	47,833		$	170,167

Earnings per share of Class A common stock:
Basic	$	0.36		$	0.98		$	1.07		$	4.01
Diluted	$	0.32		$	0.97		$	1.03		$	3.99
Weighted average shares of Class A common stock outstanding:
Basic		44,666			41,985			44,538			42,419
Diluted		85,180			42,505			84,917			42,947

Camping World Holdings, Inc. and Subsidiaries
Supplemental Data

	Three Months Ended September 30,						Increase				Percent
	2023			2022			(decrease)				Change
Unit sales
New vehicles		15,205			17,616			(2,411	)			(13.7	%)
Used vehicles		17,125			14,460			2,665				18.4	%
Total		32,330			32,076			254				0.8	%

Average selling price
New vehicles	$	44,670		$	47,350		$	(2,680	)			(5.7	%)
Used vehicles		34,466			36,375			(1,909	)			(5.2	%)

Same store unit sales⁽¹⁾
New vehicles		13,483			17,166			(3,683	)			(21.5	%)
Used vehicles		15,599			14,072			1,527				10.9	%
Total		29,082			31,238			(2,156	)			(6.9	%)

Same store revenue⁽¹⁾ ($ in 000s)
New vehicles	$	602,014		$	814,326		$	(212,312	)			(26.1	%)
Used vehicles		535,521			514,350			21,171				4.1	%
Products, service and other		180,071			207,032			(26,961	)			(13.0	%)
Finance and insurance, net		146,112			161,332			(15,220	)			(9.4	%)
Total	$	1,463,718		$	1,697,040		$	(233,322	)			(13.7	%)

Average gross profit per unit
New vehicles	$	6,756		$	9,025		$	(2,269	)			(25.1	%)
Used vehicles		6,519			8,790			(2,271	)			(25.8	%)
Finance and insurance, net per vehicle unit		5,061			5,148			(87	)			(1.7	%)
Total vehicle front-end yield⁽²⁾		11,692			14,068			(2,376	)			(16.9	%)

Gross margin
Good Sam Services and Plans		79.9	%		62.5	%		1,739		bps
New vehicles		15.1	%		19.1	%		(394	)	bps
Used vehicles		18.9	%		24.2	%		(525	)	bps
Products, service and other		40.6	%		37.8	%		280		bps
Finance and insurance, net		100.0	%		100.0	%		unch.		bps
Good Sam Club		86.8	%		83.6	%		319		bps
Subtotal RV and Outdoor Retail		28.8	%		31.1	%		(237	)	bps
Total gross margin		30.2	%		32.0	%		(175	)	bps

RV and Outdoor Retail inventories ($ in 000s)
New vehicles	$	1,131,575		$	1,180,364		$	(48,789	)			(4.1	%)
Used vehicles		534,155			425,824			108,331				25.4	%
Products, parts, accessories and misc.		202,786			293,588			(90,802	)			(30.9	%)
Total RV and Outdoor Retail inventories	$	1,868,516		$	1,899,776		$	(31,260	)			(1.6	%)

Vehicle inventory per location ($ in 000s)
New vehicle inventory per dealer location	$	5,520		$	6,415		$	(895	)			(14.0	%)
Used vehicle inventory per dealer location		2,606			2,314			291				12.6	%

Vehicle inventory turnover⁽³⁾
New vehicle inventory turnover		1.8			2.0			(0.3	)			(12.9	%)
Used vehicle inventory turnover		3.0			3.5			(0.6	)			(16.2	%)

Retail locations
RV dealerships		205			184			21				11.4	%
RV service & retail centers		4			8			(4	)			(50.0	%)
Subtotal		209			192			17				8.9	%
Other retail stores		—			1			(1	)			(100.0	%)
Total		209			193			16				8.3	%

Other data
Active Customers⁽⁴⁾		5,111,478			5,366,558			(255,080	)			(4.8	%)
Good Sam Club members		2,051,768			2,038,826			12,942				0.6	%
Service bays ⁽⁵⁾		2,800			2,639			161				6.1	%
Finance and insurance gross profit as a % of total vehicle revenue		12.9	%		12.1	%		75		bps		n/a
Same store locations		175			n/a			n/a				n/a


	Nine Months Ended September 30,						Increase				Percent
	2023			2022			(decrease)				Change
Unit sales
New vehicles		48,014			60,040			(12,026	)			(20.0	%)
Used vehicles		47,331			40,991			6,340				15.5	%
Total		95,345			101,031			(5,686	)			(5.6	%)

Average selling price
New vehicles	$	44,297		$	45,742		$	(1,445	)			(3.2	%)
Used vehicles		35,029			36,227			(1,198	)			(3.3	%)

Same store unit sales⁽¹⁾
New vehicles		43,989			58,831			(14,842	)			(25.2	%)
Used vehicles		43,916			40,280			3,636				9.0	%
Total		87,905			99,111			(11,206	)			(11.3	%)

Same store revenue⁽¹⁾ ($ in 000s)
New vehicles	$	1,949,145		$	2,695,945		$	(746,800	)			(27.7	%)
Used vehicles		1,533,574			1,463,333			70,241				4.8	%
Products, service and other		519,211			576,843			(57,632	)			(10.0	%)
Finance and insurance, net		422,725			505,391			(82,666	)			(16.4	%)
Total	$	4,424,655		$	5,241,512		$	(816,857	)			(15.6	%)

Average gross profit per unit
New vehicles	$	6,570		$	9,571		$	(3,001	)			(31.4	%)
Used vehicles		7,542			9,004			(1,462	)			(16.2	%)
Finance and insurance, net per vehicle unit		4,828			5,087			(259	)			(5.1	%)
Total vehicle front-end yield⁽²⁾		11,881			14,428			(2,547	)			(17.7	%)

Gross margin
Good Sam Services and Plans		70.2	%		62.3	%		797		bps
New vehicles		14.8	%		20.9	%		(609	)	bps
Used vehicles		21.5	%		24.9	%		(332	)	bps
Products, service and other		38.9	%		38.6	%		31		bps
Finance and insurance, net		100.0	%		100.0	%		unch.		bps
Good Sam Club		88.8	%		82.1	%		675		bps
Subtotal RV and Outdoor Retail		28.8	%		32.1	%		(332	)	bps
Total gross margin		30.0	%		32.9	%		(289	)	bps

Other data
Finance and insurance gross profit as a % of total vehicle revenue		12.2	%		12.1	%		2		bps		n/a
Same store locations		175			n/a			n/a				n/a

⁽¹⁾	Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.
⁽²⁾	Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used vehicle unit sales.
⁽³⁾	Inventory turnover is calculated as vehicle costs applicable to revenue over the last twelve months divided by the average quarterly ending vehicle inventory over the last twelve months.
⁽⁴⁾	An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.
⁽⁵⁾	A service bay is a fully-constructed bay dedicated to service, installation, and collision offerings.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
(In Thousands Except Per Share Amounts)

	September 30,			December 31,			September 30,
	2023			2022			2022
Assets
Current assets:
Cash and cash equivalents	$	53,318		$	130,131		$	148,235
Contracts in transit		100,831			50,349			87,487
Accounts receivable, net		135,832			112,411			117,428
Inventories		1,869,042			2,123,858			1,900,127
Prepaid expenses and other assets		38,979			66,913			46,869
Assets held for sale		4,635			—			—
Total current assets		2,202,637			2,483,662			2,300,146

Property and equipment, net		841,548			758,281			728,208
Operating lease assets		736,246			742,306			719,656
Deferred tax assets, net		142,187			143,226			178,808
Intangible assets, net		14,444			20,945			21,819
Goodwill		688,139			622,423			533,217
Other assets		32,058			29,304			29,532
Total assets	$	4,657,259		$	4,800,147		$	4,511,386
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	200,433		$	127,691		$	187,613
Accrued liabilities		171,956			147,833			252,644
Deferred revenues		99,813			95,695			101,917
Current portion of operating lease liabilities		62,987			61,745			61,001
Current portion of finance lease liabilities		5,563			10,244			10,397
Current portion of Tax Receivable Agreement liability		13,999			10,873			11,686
Current portion of long-term debt		23,257			25,229			15,827
Notes payable – floor plan, net		1,017,543			1,319,941			899,568
Other current liabilities		79,381			73,076			83,959
Liabilities related to assets held for sale		4,022			—			—
Total current liabilities		1,678,954			1,872,327			1,624,612

Operating lease liabilities, net of current portion		759,952			764,835			743,914
Finance lease liabilities, net of current portion		99,060			94,216			95,496
Tax Receivable Agreement liability, net of current portion		149,134			159,743			159,790
Revolving line of credit		20,885			20,885			20,885
Long-term debt, net of current portion		1,522,495			1,484,416			1,368,380
Deferred revenues		70,214			70,247			73,294
Other long-term liabilities		85,710			85,792			87,517
Total liabilities		4,386,404			4,552,461			4,173,888
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.01 per share – 20,000 shares authorized; none issued and outstanding		—			—			—
Class A common stock, par value $0.01 per share – 250,000 shares authorized; 49,571, 47,571, and 47,855 shares issued, respectively; 44,780, 42,441, and 42,129 shares outstanding, respectively		496			476			476
Class B common stock, par value $0.0001 per share – 75,000 shares authorized; 39,466, 41,466, and 69,066 shares issued, respectively; 39,466, 41,466, and 41,466 shares outstanding, respectively		4			4			4
Class C common stock, par value $0.0001 per share – 0.001 share authorized, issued and outstanding		—			—			—
Additional paid-in capital		108,942			106,051			117,151
Treasury stock, at cost; 4,791, 5,130, and 5,442 shares, respectively		(167,847	)		(179,732	)		(190,658	)
Retained earnings		207,657			221,031			280,772
Total stockholders’ equity attributable to Camping World Holdings, Inc.		149,252			147,830			207,745
Non-controlling interests		121,603			99,856			129,753
Total stockholders’ equity		270,855			247,686			337,498
Total liabilities and stockholders’ equity	$	4,657,259		$	4,800,147		$	4,511,386