Recreational vehicle (RV) and boat retailer Camping World (NYSE:CWH) fell short of the market’s revenue expectations in Q1 CY2025 as sales rose 3.6% year on year to $1.41 billion. Its non-GAAP loss of $0.15 per share was 26.5% above analysts’ consensus estimates.
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Camping World (CWH) Q1 CY2025 Highlights:
- Revenue: $1.41 billion vs analyst estimates of $1.43 billion (3.6% year-on-year growth, 1% miss)
- Adjusted EPS: -$0.15 vs analyst estimates of -$0.20 (26.5% beat)
- Adjusted EBITDA: $49.45 million vs analyst estimates of $28.03 million (3.5% margin, 76.4% beat)
- Operating Margin: 1.5%, up from 0.3% in the same quarter last year
- Free Cash Flow was -$256 million compared to -$93.91 million in the same quarter last year
- Locations: 209 at quarter end, down from 215 in the same quarter last year
- Market Capitalization: $1.03 billion
StockStory’s Take
Camping World’s Q1 results reflected ongoing shifts in product mix and cost discipline as management aimed to balance volume growth and profitability. CEO Marcus Lemonis cited a 30% increase in used unit sales and emphasized targeted cost reductions, including headcount and dealership consolidations, to deliver improved operating margins. Leadership highlighted that these actions, initiated early in the year, are designed to offset continuing pressure on average selling prices (ASPs) and to capitalize on growth in the used RV segment, which outpaced expectations.
Looking forward, Camping World’s management expressed confidence in sustaining market share gains and improving cost efficiency, while remaining attentive to wider consumer trends and potential headwinds from tariffs and financing conditions. Lemonis stated, “We remain confident in the guideposts we've laid out to deliver growth in excess of low double-digits in used units, low single-digits in new, vehicle gross margins within our historical range and SG&A as a percentage of gross profit improving 600 to 700 basis points.” The company remains focused on optimizing its business mix and cost structure to navigate an uncertain consumer environment.
Key Insights from Management’s Remarks
Camping World’s leadership attributed Q1 performance to a combination of operational adjustments, inventory strategy, and evolving consumer behavior in the recreational vehicle (RV) sector. The following points highlight the key themes and tactical changes underpinning recent results:
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Used RV sales momentum: Management reported significant gains in used unit sales, supported by improved procurement and inventory velocity, which helped offset softness in new unit ASPs. They described record levels of used inventory procurement in March and April, fueling same-store sales gains.
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Cost reduction measures: The company took decisive steps to lower selling, general, and administrative (SG&A) expenses by approximately $35 million on an annualized basis, including workforce reductions and location consolidations. These actions aim to preserve margins amid ASP variability and are expected to show greater impact in the second half of the year.
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Market share expansion: Camping World achieved a combined new and used unit market share over 14% through February, exceeding prior targets. This was achieved through a focus on affordability and product offerings across a broad range of price points, as well as digital marketing initiatives.
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Minimal tariff impact expected: Management reiterated that direct tariff effects on the RV business are expected to be limited, as most RVs sold are domestically produced. Any increase in new unit prices is anticipated to benefit the used business by raising the value of existing inventory.
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Financing and affordability trends: Executives noted that credit availability and consumer affordability remain critical drivers, with average credit scores for buyers above 700 and lenders showing stable to slightly improved terms. The company continues to address affordability by offering a wide range of monthly payment options to suit diverse consumer budgets.
Drivers of Future Performance
Camping World’s management is prioritizing margin improvement, used vehicle growth, and operational discipline to support future performance, while remaining attentive to evolving industry dynamics and consumer demand.
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SG&A cost control: Management expects further improvement in operating margins as ongoing cost reduction initiatives—including headcount reductions and dealership consolidation—take full effect throughout the year.
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Used vehicle growth focus: The company aims for double-digit growth in used unit sales, leveraging procurement capabilities and flexible sourcing to capitalize on increased consumer interest in pre-owned RVs.
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Industry pricing and tariffs: While direct tariff exposure is limited, anticipated price increases for model year 2026 RVs could impact the mix between new and used sales. Management believes contract manufacturing and product mix flexibility will help mitigate any demand shifts.
Top Analyst Questions
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Joseph Altobello (Raymond James): Asked about the drivers behind ASP softness and the level of OEM (original equipment manufacturer) promotional support. Management emphasized the impact of increased entry-level unit sales and stated new unit margins remained within historical ranges without heavy promotions.
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Sean Wagner (Citigroup): Inquired about potential tariff impacts and the durability of the balance sheet if macro conditions deteriorate. Executives stated they see limited direct tariff risk and highlighted available liquidity, asset sales, and ongoing deleveraging as key financial safeguards.
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Alex Perry (Bank of America): Questioned why Camping World’s results diverged from softening consumer trends and how the company sustains used sales momentum. Management cited the installed base of RV users and tailored affordability options as differentiators.
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Michael Swartz (Truist Securities): Asked for details on the cadence and reinvestment of recent cost reduction actions. Management explained that most reductions are completed, with expected full benefit in the coming quarters, and signaled readiness for further cuts if necessary.
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Scott Stember (ROTH MKM): Sought clarity on the lending environment and customer demand in the parts and service segment. Management reported stable to improving retail lending conditions and increasing customer activity in service and campgrounds, especially as domestic travel remains popular.
Catalysts in Upcoming Quarters
In the next few quarters, our analysts will be monitoring (1) the sustained momentum in used RV sales and whether new inventory procurement continues at record levels, (2) the effectiveness of SG&A reductions and dealership consolidation on margin improvement, and (3) potential shifts in consumer financing and affordability trends as broader economic conditions evolve. Execution on optimizing the business mix and managing tariff-related pricing changes will also be important markers of strategic progress.
Camping World currently trades at a forward P/E ratio of 17.2×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report.
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