Camping World 2nd quarter results show tightening RV profits

Crowded campgrounds and the need to make campground reservations well in advance of your camping trips have been the result of more RVs on the road due to record RV sales. A leading player in the recreation vehicle industry, Camping World, has sought to be the one-stop shop for those seeking to follow the RV lifestyle, and the company has taken full advantage of the boom in RV sales. In a bold move for revenue growth, the company pursues larger aspirations to capture the entire outdoors market through strategic acquisitions of companies in adjacent industries like hunting and fishing gear and apparel.

Coming into Tuesday’s second-quarter financial report, Camping World investors were hoping that the company would continue to see sustained growth from high demand for RVs, reports The Motley Fool. Though Camping World did indeed see some growth, the pace of gains was slower than what most had wanted to see, and that has some investors wondering whether the big boom in RVs might be coming to a close.

CW’s second-quarter results showed continued expansion, but not to as large an extent as hoped. Adjusted net income was higher by 11% to $85.6 million, but the resulting adjusted earnings of $0.96 per share fell $0.10 per share short of the consensus forecast among investors.

In past quarters, though, pricing played a negative role in Camping World’s success. Average selling prices per RV fell almost 2%, with an even bigger 5% decline in new vehicle pricing to just over $33,000 per unit. However, the used RV market reversed its past downward trend, picking up more than 6% and coming in at an average of $22,900 per unit.

Elsewhere, Camping World enjoyed solid results in its consumer services and plans division, including a nearly 10% rise in revenue that translated to 15% growth in segment income. Membership in the Good Sam Club RV community jumped by 85,000 to more than 1.92 million members, hitting an all-time high. Camping World also saw demand for parts and other RV services climb dramatically, with gains of greater than 40% for the division.

CEO Marcus Lemonis explained some of the cross-currents in the quarter. “While the early part of the RV selling season was impacted by unseasonal weather,” Lemonis said, “we saw nice improvements as the second quarter progressed, and our team did an excellent job of balancing our promotional activity to maintain strong profitability while driving sales growth and dramatically lowering our inventory levels of new RVs.”

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