Camping World celebrated achievements and navigated challenges during its 2024 second quarter.
While RV sales were down industry-wide in the past quarter, the dealer chain reported a 5.8% new vehicle revenue increase. Camping World Chairman and CEO Marcus Lemonis said the dealer’s increased revenue was due to adjusting prices to meet consumer expectations.
Lemonis said he was unhappy to see 12% to 15% and 18% declines in the industry’s retail sales from Statistical Surveys Inc.
“I am worried about the overall dealer health. I am not going to lie,” Lemonis said. “I want to be very thoughtful in explaining that that concern that I have is partially what is driving our conservative nature on the used acquisition side.”
Lemonis said the RV industry still had 14,000 new RVs from model years 2022 and 2023 on lots. He said those vehicles are “essentially used units at this point.”
“That is a problem,” Lemonis said, “because no matter how much those dealers discount (even) 20% or 30% off of ’22 and ’23 models is still higher than the price we are selling ’24s and ’25s for. They really got caught there.”
Consignment
Camping World broadened its profit by increasing consignment sales in recent months.
According to Camping World President Matthew Wagner, “Looking at the history of our business, the margin profile on used always exceeds new outside of a period in ’21 and ’22 with outlandish new margins for that short time period.”
In December, the dealer bought RV Arizona, a consignment specialist store. Camping World learned the company’s consignment business model and implemented the method at Camping World stores.
While Camping World historically averaged 1,000 consignment sales annually, in the past four months the dealer sold more than 4,000 consignment RVs. In conjunction, consignment sales increased the dealer’s turns. Lemonis said in July, the company began achieving its turn goals.
Wagner said, “The RV Arizona business has taught us a scalable playbook that has enabled us to take that same methodology, same concept and expand our consignment process across the entirety of our enterprise.”
According to Wagner, the company can yield better results in underperforming dealerships by applying RV Arizona methods.
“In our mind, there is an opportunity to take that bottom 10% (of Camping World dealerships) and reassess the markets in which they operate,” Wagner said. “We believe that we should be able to take…this consignment playbook and start to convert some additional stores to yield that much more out of these underperforming (dealerships).”
Consignment sales have a lower margin profile compared with used RV sales. According to Lemonis, while traditional used sales have a 20% profit margin, consignments have 16% to 17%. The difference stems from fewer parts investments compared with used RV transactions.
While the shift increased Camping World’s sales, the dealer chain is seeking a balance between consignment and traditional used RV sales.
“What we want to do is continue to ramp up that consignment process because we love free money,” Lemonis said, “and we love fast turns, but we want to get back into purchase as well so that we can find that blend that gets us to the margin profile we need to be at.”
