Executive Summary / Key Takeaways

• Camping World is executing a multi-faceted strategy focused on expanding its retail footprint, leveraging contract manufacturing for product differentiation, and establishing dominance as a market maker in the used RV space.
• The company delivered significant year-over-year improvement in Q1 2025, with revenue increasing 4% driven by a robust 25.1% surge in used vehicle sales and a 9.8% rise in Finance and Insurance revenue, contributing to a material increase in Adjusted EBITDA.
• Management is targeting substantial profitability improvement in 2025, guided by expectations for low double-digit used unit growth, low single-digit new unit growth, a return to historical vehicle gross margins, and a significant 600-700 basis point improvement in SG&A as a percentage of gross profit.
• Strategic initiatives like targeted dealership acquisitions (path to 320+ locations), consolidation of underperforming stores, aggressive cost controls, and investments in technology platforms like the Good Sam Valuator and CW Auction are central to achieving market share goals and enhancing financial performance.
• While macroeconomic factors like interest rates and consumer confidence remain pertinent risks, Camping World believes its focus on affordability, operational efficiency, and market-making capabilities positions it for idiosyncratic growth and earnings recovery largely within its control.

Camping World Holdings, Inc. (NYSE:CWH) stands as the nation's largest retailer of recreational vehicles and related products, a position forged over decades of strategic growth and adaptation. From its origins in 1966, the company embarked on a transformative journey in 2003 with its first dealership acquisition, laying the groundwork for a vast national network that now exceeds 200 locations, with a stated ambition to reach over 320 in the foreseeable future. This expansion has been coupled with a deep-seated focus on product innovation through contract manufacturing and a sophisticated data-driven approach to market dynamics, positioning CWH not merely as a retailer, but as a significant market influencer.

The RV industry itself is inherently cyclical and seasonal, heavily influenced by macroeconomic conditions such as inflation, interest rates, and consumer confidence. Recent years have presented a challenging backdrop, marked by supply chain disruptions, fluctuating vehicle costs, and rising interest rates that have impacted affordability. Despite these headwinds, the industry saw wholesale shipments increase by 6.6% in 2024 and a further 13.9% in the first three months of 2025 compared to the prior year period, signaling a potential restocking phase for dealers. However, residual values for used vehicles declined in 2024 following decreases in new vehicle costs, creating a dynamic environment for inventory management and pricing.

Camping World's strategy is built on three core pillars: Distribution, Product, and Market Making. The company leverages its extensive physical footprint and growing digital presence to reach customers across the nation. Its product strategy, particularly its contract manufacturing relationships with major OEMs like THOR (THO) and Forest River, allows it to influence design, sourcing, and pricing, creating exclusive RV models tailored to consumer demand and affordability. Critically, CWH has invested heavily in proprietary data and technology platforms to act as a market maker, especially in the fragmented used RV market. Tools like the Good Sam Valuator provide valuation transparency, while the CW Auction platform creates liquidity and price discovery, attracting third-party banks and manufacturers and offering a unique countercyclical opportunity. This data-driven approach informs inventory ordering, real-time pricing, and the identification of underserved markets, enabling CWH to adapt swiftly to changing consumer preferences and economic conditions.

This strategic framework has allowed Camping World to demonstrate operational outperformance relative to the broader industry. In 2024, the company achieved record combined new and used market share, reaching 11.2%, and saw growth in new unit sales despite industry-wide declines. The Good Sam services segment also provided a stable foundation, delivering nearly $95 million in EBITDA in 2024.

Building on this momentum, Camping World's first quarter 2025 results underscore the impact of its strategic focus. Total revenue increased by 4% year-over-year to $1.41 billion. This growth was primarily fueled by a significant 25.1% increase in used vehicle revenue, reaching $422.4 million, and a 9.8% rise in Finance and Insurance revenue to $148.7 million. While new vehicle revenue saw a 5.3% decrease to $621.4 million, largely due to a 4.4% decrease in average selling price per unit and a slight dip in volume, the strength in used vehicles and F&I offset this. Products, service, and other revenue decreased by 7.3% to $165.0 million, partly attributable to the divestiture of the RV furniture business in May 2024 and a reallocation of service labor towards used inventory reconditioning.

Profitability showed marked improvement in the quarter. Total gross profit increased by 6.8% to $429.6 million, with the overall gross margin expanding by 89 basis points to 30.4%. This was driven by a notable 104 basis point improvement in used vehicle gross margin to 18.6%, reflecting the benefits of bringing fresh inventory into the system at favorable costs. Products, service, and other gross margin also saw a significant 580 basis point increase to 48.6%, benefiting from the furniture business divestiture (which had negative margins) and improved aftermarket parts margins. New vehicle gross margin slightly decreased by 19 basis points to 13.7%, influenced by the lower average selling price.

Operating expenses saw a modest increase, with Selling, General, and Administrative (SG&A) expenses rising by 4.3% to $387.4 million, primarily due to higher employee compensation, advertising, and stock-based compensation. However, long-lived asset impairment charges decreased significantly from $5.8 million in Q1 2024 to $0.6 million in Q1 2025. Income from operations saw a substantial increase, rising from $4.2 million in Q1 2024 to $20.8 million in Q1 2025.

Interest expenses decreased year-over-year. Floor plan interest expense fell by 34.3% to $18.3 million, benefiting from both a lower average borrowing rate (6.34% in Q1 2025 vs 7.87% in Q1 2024) and a lower average outstanding balance. Other interest expense, net, also decreased by 15.4% to $30.5 million due to reduced rates on the Term Loan Facility and lower borrowings on Real Estate Facilities. Despite a net loss of $24.7 million for the quarter, the company reported a significant improvement in Adjusted EBITDA, increasing nearly fourfold from $8.2 million in Q1 2024 to $31.1 million in Q1 2025.

Camping World's liquidity position remains robust, supported by cash flow from operations, existing cash balances, and access to credit facilities. As of March 31, 2025, the company held $20.9 million in cash and cash equivalents, with a working capital of $509.4 million. The Floor Plan Facility, recently expanded to $2.15 billion in February 2025, provides significant capacity for inventory financing, with $534.4 million in unencumbered borrowing capacity available at quarter-end. The company also has access to a Revolving Credit Facility and Real Estate Facilities, subject to certain covenants. While net cash used in operating activities increased in Q1 2025, primarily due to inventory adjustments, net cash provided by financing activities saw a substantial increase, driven by Floor Plan borrowings. The company continues to pay a quarterly dividend ($0.12 per share in Q1 2025) funded by tax distributions and has $120.2 million available under its stock repurchase program.

Looking ahead, management has provided clear guideposts for 2025, signaling confidence in continued operational and financial improvement. They are targeting growth in excess of low double-digits in used units and low single-digit growth in new units, aiming to sell over 130,000 units in total and achieve a record combined market share of 12%. Vehicle gross margins are expected to return to historical ranges, with used margins recovering sequentially from the mid-to-high teens seen in late 2024 towards the 20%+ range. A key focus is a significant 600-700 basis point improvement in SG&A as a percentage of gross profit, driven by increased gross profit dollars and aggressive cost controls, including headcount reductions and store consolidations. Management expects "explosive EBITDA growth" in Q1 2025 compared to the prior year, driven by these factors.

The competitive landscape in RV retail is dynamic, with CWH competing directly with other large retailers like Lazydays (LAZY) and indirectly with manufacturers who have retail operations (THO, TICKER:WGO), as well as smaller regional dealers and online platforms. CWH's scale, national network, and integrated business model (sales, service, parts, F&I, Good Sam services) provide significant advantages. Its data-driven approach to inventory and pricing, coupled with contract manufacturing, allows it to offer competitive value, particularly in the entry-level and used segments, where it has demonstrated commanding market share (e.g., Coleman travel trailers as the #1 selling travel trailer). While manufacturers like THO and WGO benefit from vertical integration and potentially lower production costs, CWH's retail expertise, customer loyalty programs (Good Sam), and market-making tools differentiate its offering and drive traffic. Compared to pure-play retailers like LAZY, CWH's larger scale, broader service offerings, and sophisticated technology platforms provide superior efficiency and market influence. However, CWH faces vulnerabilities from macroeconomic sensitivity, potential shifts in consumer preferences, and the execution risk associated with integrating acquisitions and implementing cost controls. The company also acknowledges material weaknesses in internal controls over financial reporting related to income tax calculations, which are currently being remediated.

Despite these risks, Camping World's strategic pivot towards affordability, aggressive management of its used business, and commitment to cost efficiency appear to be yielding tangible results. The Q1 2025 performance provides early validation of this strategy, demonstrating growth in key areas and significant profitability improvement. The expanded Floor Plan facility and available capital provide the flexibility to pursue opportunistic acquisitions and further invest in the business.

Conclusion

Camping World Holdings is executing a clear strategy to capitalize on its market leadership and navigate the current RV industry landscape. By focusing on expanding its distribution network, leveraging contract manufacturing for product differentiation, and establishing dominance as a market maker in the used RV segment, the company is positioning itself for renewed growth and profitability. The strong performance in Q1 2025, particularly the surge in used vehicle sales and significant Adjusted EBITDA improvement, indicates that these strategic initiatives are gaining traction. While macroeconomic uncertainties and competitive pressures persist, management's commitment to driving unit volume, improving margins, and aggressively controlling costs provides a clear path towards achieving its 2025 guideposts and enhancing shareholder value. The successful execution of its used business ramp-up and SG&A reduction targets will be critical indicators to monitor as the year progresses.