Camping World executives discussed the dealer chain’s sales and operations for the first four months of 2024. The biggest news from Chairman and CEO Marcus Lemonis was the consumer traffic.
“We continue to see demand,” he said, “and what has not been the problem for the company is demand.”
Lemonis said the difference between consumer demand and sales is affordability. High interest rates continue to weigh on consumers, keeping Camping World from converting all consumers who want RVs into RV buyers.
“At the beginning of the year, we were very vocal about driving down these ASPs to find the intersection with new interest rates at a payment level that was affordable,” he said. “We need the macro to help us a little bit. The macro has been pretty tough for the first four months.”
High interest rates are also affecting Camping World’s operations. Lemonis said company projections at the start of the year expected interest rates to fall in the year’s second half. Revised projections pushed interest rate declines into 2025.
The difference: An additional $15 million in floorplan financing expenses in 2024.
“Not anything that we have control of,” he said, “not anything that we are doing, but that is $15 million that we have to really work hard to try to find somewhere else.”
Camping World recorded $27.9 million in floorplan interest expense in the first quarter. Annual floorplan interest expenses would total $111.6 million at that rate, making the $15 million unplanned expense a 13.4% increase from previously expected levels.
Lower average sales prices (ASPs) spurred increased new RV sales in the first quarter. New RV revenue rose 1.4% in the first quarter of 2024 compared with the first quarter of 2023. New RV unit sales rose 21.3%.
“We do believe that the consumer has started to settle in around where rates are,” Lemonis said. “Our change in mix in driving down those ASPs has allowed us to find a wider audience.”
Lemonis said Camping World’s market share growth in the first quarter was “massive” and never before seen in the dealer chain’s history.
As new RV sales increased, used RV sales fell dramatically. Used RV revenue was down 24.1% from the first quarter of 2023, with used RV unit sales down 14%. Lemonis said the decline was intentional as Camping World shifted away from used RV sales with aged new inventory still prevalent throughout the country.
“We want you to not be alarmed by the drop in used sales because it is not a function of a drop in demand,” he said. “It is a function of us caring materially less than we did a year ago, and we think is was prudent…so we can right size our inventory.”
Lemonis and Chief Operating Officer Matthew Wagner said they expected Camping World to increase used RV inventory again beginning in June.
Among other announcements:
- Camping World sold its aftermarket furniture business to Lippert. Lemonis said the dealer chain then signed an agreement with Lippert to purchase aftermarket furniture while expanding margins.
- The furniture sale is among the steps Camping World will take in 2024 to reset its aftermarket retail stores in all 215 stores nationwide. Lemonis said resetting all stores to one standard will cost about $10 million.
- Camping World’s Net Promoter Scores in its service department increased from negative levels three years ago to 32% or higher today. “That is unheard of in our industry,” Lemonis said.
- The company’s finance and insurance net revenue per RV totaled $4,912 in the first quarter, down 0.3% from the first quarter of 2023. Lemonis said the strong F&I performance came in part from lower ASPs. “Had we not driven down ASPs, we believe our F&I performance would have been lower because when a customer’s buying off on a monthly payment, that includes a warranty that they need, roadside assistance that they need and the other product that we sell. Had we not been able to drive down the price…we would not have been able to recapture some of that margin on the back end.”
