Camping World Cuts Outlook as RV Demand Weakens
Operating cash flow swung to positive $333.2 million in the first half.
Camping World Holdings (CWH), the recreational-vehicle retailer, cut its full-year profit outlook after weaker peak-season demand drove down vehicle sales and compressed margins.
The second quarter brought a seasonal rebound from the first quarter, though the sales trajectory weakened from a year earlier. Combined new and used vehicle units fell 7.5%, compared with a 6.5% first-quarter decline, as worsening new-vehicle demand outweighed a return to growth in used units.
Revenue fell 2.1% to $1.934 billion, after rising sequentially from $1.35 billion in the first quarter. Net income declined 24.0% to $43.7 million and adjusted earnings before interest, taxes, depreciation and amortization fell 21.2% to $112.1 million. Camping World had recorded a $26.7 million net loss and $28.0 million of adjusted EBITDA in the first quarter.
New-vehicle unit sales dropped 16.4%, a steeper contraction than the first quarter’s 9.0% decline. A 13.6% increase in average selling prices limited the new-vehicle revenue decline to 5.0%, though unit costs rose faster and pushed gross margin down to 10.9% from 12.2% in the preceding quarter.
Used-vehicle units rose 5.2%, reversing a 3.4% first-quarter decline, and revenue increased 1.4%. Lower selling prices and higher unit costs reduced used-vehicle gross margin to 16.5% from 17.7% in the first quarter. Weak industry demand in May and June, along with liquidation of aged used vehicles and prior-model-year new inventory, pressured vehicle gross profit.
Total gross profit fell 9.1% to $538.4 million and gross margin narrowed 214 basis points to 27.8%. Products, service and other revenue declined 2.4%, reflecting less service, collision and warranty work. Good Sam Services and Plans moved in the other direction, with gross profit rising $1.5 million and margin expanding to 61.8%.
Camping World now expects full-year adjusted EBITDA of $230 million to $270 million, down from its previous $275 million to $325 million forecast. The company also reset its industry outlook to 290,000 to 310,000 new retail units, representing a 15% decline at the midpoint, after U.S. RV registrations fell 15.0% in April and 19.0% in May.
Inventory reductions and cash generation strengthened the balance sheet during the downturn. RV and outdoor-retail inventory declined 9.7% to $1.86 billion, and net debt fell 14.5%, as quarter-end cash rose to $224.1 million. Camping World identified $100 million of structural selling, general and administrative savings and operating efficiencies, with half of the run-rate savings targeted by year-end and the full amount expected by early 2028.