Camping World Chairman and CEO Marcus Lemonis took time during a call discussing the company’s first-quarter earnings to caution RV manufacturers to slow manufacturing to match retail demand.
Lemonis said he and Executive Vice President Matthew Wagner had conversations with each individual manufacturer – including manufacturers Camping World does not have a relationship with – to discuss the dealership’s observations from January and February.
“We strongly encourage them to cut their production back to scale to meet and match what retail demand was,” Lemonis said, “and in some cases, even withdraw a little bit, so that the inventory that is out there in the system can settle in and then we can get into more of a just-in-time inventory.”
Although Lemonis said Camping World officials were confident manufacturers saw the benefit of slowing manufacturing, he said the dealership took steps to hedge its inventory.
In what Lemonis called an abundance of caution, Camping World adjusted ordering and forecasting to secure just enough inventory for its just-in-time business process.
“As we take inventory in over the next several months, it is our plan to take inventory in at a slower rate than we are selling it, more than we normally would as we seasonally adjust,” he said.
Camping World could take those steps because Lemonis said towable inventory has been adequately restocked. He said restocking happened quicker than anyone expected as manufacturers made more RVs than normal at the end of 2021 and the start of 2022.
“In fairness to them, they are trying to get all dealers, not just us, all dealers back to a stocking level that creates some level of normalcy for their own business,” Lemonis said, “and we are supporters of that because the healthy industry by all dealers is good for everybody.”
After the industry went through overstocking and the retail pain it caused in 2018 and 2019, Lemonis said he believed RV participants learned their lesson.
“I do not believe they want to go back to that level of business, where they are trying to push out product at all costs,” he said. “I don’t believe they will do that. And I think collectively, as an industry, we learned that lesson.”
Camping World reported record quarterly revenues of $1.7 billion and an increase of $39.7 million in gross profits from the first quarter of 2021. However, a number of one-time charges involving distribution centers and a cyber breach first announced Feb. 22 helped bring the net profit total down.
Still, Lemonis revealed numerous details about operations, beginning with the belief that the installed RV consumer base grew by over 1 million in the last several years. Camping World added four retail stores in the quarter and Lemonis said he expects at least 10 more acquisitions or new-store openings this year.
Other details include:
- Camping World’s end-to-end RV purchase digital platform is expected to launch by the end of June.
- The company’s entry-level Coleman 17B travel trailer recently had its best monthly sales, with 800 RVs sold in the month. Lemonis said the purchases were not consumers trading down because of pricing, fuel or inflation concerns but rather that Camping World found more new buyers still entering the market.
- Camping World’s average store does about $43 million in annual revenue.
- Service demand remains so strong that historically, Lemonis said Camping World built locations with 10,000 square feet of retail space and 12 service bays. Today, the company that began as a parts and accessories retailer is building stores with 6,000 square feet of retail space and 18 to 24 service bays to meet service demand.
- Wagner said Camping World would like to deploy resources to acquire more motorized inventory but as the supply remains challenged, and motorized sales account for 12% of all RV sales, he said the dealership is content with current volume levels.
