Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the year and fourth quarter ended December 31, 2023.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “Beginning in December, our new vehicle same store unit growth turned positive, with January and February to date trending up from mid-single to low-double digits. We achieved our goal of significantly improving our new unit inventory position, with less than 7,500 new model year 2023’s remaining as of today. We believe we are outpacing the industry with close to 80% in 2024 models currently. We believe that successful negotiations in year-over-year pricing reductions on like-for-like new units has sparked early demand and new gross margin stabilization.”

Matt Wagner, Chief Operating Officer of Camping World Holdings, Inc. commented, “Any reduction of new model pricing causes us to reset used vehicle values and slow down the purchases of used RV inventory while market values correct themselves. We expect this short-term maneuver to allow used vehicle volumes to improve over time, with gross margin improvement beginning in the second quarter and continuing through the balance of the year.”

Mr. Wagner concluded, “Positive demand trends, inventory discipline, strength in our Good Sam segment and the service and parts portion of our business, acquisitions, and cost reductions, give us confidence in delivering unit volume and strong earnings growth in 2024 while continuing our march to 320 locations by 2028.”

Full Year-over-Year Operating Highlights

• Revenue was $6.2 billion, a decrease of $740.5 million, or 10.6%.
• Used vehicle revenue was a record $2.0 billion, an increase of $102.0 million, or 5.4%, and used vehicle unit sales were a record 56,823 units, an increase of 5,498 units, or 10.7%.
• New vehicle revenue was $2.6 billion, a decline of $651.8 million, or 20.2%, and new vehicle unit sales were 58,731 units, a decrease of 11,698 units, or 16.6%.
• Average selling price of new and used vehicles declined 4.3% and 4.8%, respectively.
• Same store used vehicle unit sales increased 5.0%, and same store new vehicle unit sales decreased 22.1%.
• Products, services and other revenue was $870.0 million, a decline of $129.2 million, or 12.9%, driven largely by lower demand and lower stocking levels of lifestyle and activities, and design and home products, as well as decreases in our direct to manufacturer RV furniture revenues due to RV manufacturer production slowdowns and discounting and discontinuation of certain product categories related to our Active Sports Restructuring.
• Gross profit was $1.9 billion, a decrease of $383.6 million, or 17.0%. Total gross margin was 30.2%, a decrease of 230 basis points. The decrease in gross profit and gross margin was driven largely by the decrease in average selling price of new and used vehicles and gross profit was further impacted by the decrease in combined RV unit sales and the related decrease in finance and insurance, net. This decrease was partially offset by the $14.3 million increase in gross profit and 682 basis point increase in gross margin of the Good Sam Services and Plans segment.
• Selling, general and administrative expenses were $1.5 billion, a decrease of $68.0 million, or 4.2%, primarily due to approximately $49.2 million of reduced advertising expenses and $35.1 million of reduced variable compensation costs, partially offset by incremental costs related to the net six additional store locations added during the year ended December 31, 2023.
• Floor plan interest expense was $83.1 million, an increase of $41.0 million, or 97.7%, and other interest expense, net was $135.3 million, an increase of $59.5 million, or 78.6%. These increases were primarily as a result of the rise in interest rates.
• Net income was $50.6 million, a decrease of $300.4 million, or 85.6%.
• Diluted earnings per share of Class A common stock was $0.55 in 2023 versus diluted earnings per share of Class A common stock of $3.22 in 2022. Adjusted earnings per share - diluted⁽¹⁾ of Class A common stock was $0.81 in 2023 versus adjusted earnings per share – diluted⁽¹⁾ of Class A common stock of $4.17 in 2022.
• Adjusted EBITDA⁽¹⁾ was $286.2 million, a decrease of $367.2 million, or 56.2%.
• New and used vehicle inventories were $1.8 billion, a decrease of $32.1 million.
• The Company paid an annualized cash dividend of $1.50 per share of Class A common stock, a decrease of $1.00 per share of Class A common stock.

Fourth Quarter-over-Quarter Operating Highlights

• Revenue was $1.1 billion for the fourth quarter, a decrease of $171.0 million, or 13.4%.
• Used vehicle revenue was $321.7 million for the fourth quarter, a decrease of $70.9 million, or 18.1%, and used vehicle unit sales were 9,492 units, a decrease of 842 units, or 8.1%.
• New vehicle revenue was $449.4 million for the fourth quarter, a decline of $32.3 million, or 6.7%, and new vehicle unit sales were 10,717 units, an increase of 328 units, or 3.2%.
• Average selling price of new and used vehicles declined 9.6% and 10.8%, respectively, during the fourth quarter. As the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, the Company actively discounted certain used vehicles and certain pre-2024 model year new vehicles during the fourth quarter to reduce inventory levels of aged vehicles.
• Same store used vehicle unit sales decreased 11.2% for the fourth quarter, and same store new vehicle unit sales decreased 2.2%.
• Products, services and other revenue was $179.0 million, a decline of $58.3 million, or 24.6%, driven largely by lower demand and lower stocking levels of lifestyle and activities, and design and home products, as well as discounting and discontinuation of certain product categories related to our Active Sports Restructuring.
• Gross profit was $343.4 million, a decrease of $48.2 million, or 12.3%. Total gross margin was 31.0%, an increase of 37 basis points. The decrease in gross profit was driven largely by the new and used vehicle discounting as discussed above.
• Selling, general and administrative expenses were $337.1 million, a decrease of $24.4 million, or 6.7%, primarily as a result of our efforts to reduce expenses.
• Floor plan interest expense was $21.8 million, an increase of $4.2 million, or 24.1%, and other interest expense, net was $35.4 million, an increase of $9.4 million, or 36.2%. These increases were primarily as a result of the rise in interest rates.
• Net loss was $49.9 million, a decrease of $7.3 million, or 12.7%.
• Diluted loss per share of Class A common stock was $0.49 in 2023 versus diluted loss per share of Class A common stock of $0.79 in 2022. Adjusted loss per share - diluted⁽¹⁾ of Class A common stock was $0.47 in 2023 versus adjusted loss per share – diluted⁽¹⁾ of Class A common stock of $0.20 in 2022.
• Adjusted EBITDA⁽¹⁾ was a negative $8.9 million, a decrease of $29.1 million, or 144.1%.

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Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s fourth quarter and fiscal year 2023 financial results and 2024 outlook is scheduled for February 22, 2024, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13743788. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of December 31, 2023, the Company owned 52.9% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is the world’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy. Our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly trained and knowledgeable team of employees serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 43 states, Camping World has grown to become the prime destination for everything RV. For more information, visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about expectations regarding new and used vehicle unit volume trends, our ability to deliver unit volume and increased market share, macroeconomic and industry trends, dividend payments and capital allocation, our business plans and goals, the Company’s acquisition pipeline and plans, and future financial results, including anticipated earnings growth and gross margin outlook for 2024. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: general economic conditions, including inflation and interest rates; the availability of financing to us and our customers; fuel shortages, high prices for fuel or changes in energy sources; the success of our manufacturers; changes in consumer preferences; risks related to our strategic review of our Good Sam business; competition in our industry; risks related to acquisitions, new store openings and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; risks related to COVID-19; our ability to execute and achieve the expected benefits of our cost cutting or restructuring initiatives; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; our dependence on our relationships with third party suppliers and lending institutions; risks associated with selling goods manufactured abroad; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; risks associated with our private brand offerings; we may incur asset impairment charges for goodwill, intangible assets or other long-lived assets; tax risks; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; risks related to climate change and other environmental, social and governance matters; and risks related to our organizational structure.

These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2022, as updated by our Annual Report on Form 10-K for the year ended December 31, 2023 following the date hereof, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Future declarations of quarterly dividends are subject to the determination and discretion of the Company’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from CWGS Enterprises, LLC, its business prospects and other factors that the Company’s Board of Directors may deem relevant.

We intend to use our official Facebook, X (formerly known as Twitter), and Instagram accounts, each at the handle @CampingWorld, as well as the investor page of our website, investor.campingworld.com, as a distribution channel of material information about the Company and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels and on our investor webpage may be deemed material. Accordingly, investors should subscribe to these accounts and our investor alerts, in addition to following our press releases, SEC filings, public conference calls and webcasts. These social media channels may be updated from time to time.

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Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods

During the year and three months ended December 31, 2023, we experienced a decrease in gross margin for new and used vehicles compared to the same periods in 2022. However, 2023 new vehicle gross margins were higher than the pre-COVID-19 pandemic comparative periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic. During 2023, as the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, we actively discounted certain used vehicles to reduce inventory levels of aged used vehicles. This discounting had a negative impact on used vehicle gross margins during 2023 and is expected to continue into the first quarter of 2024, compared to the pre-COVID pandemic comparative periods.

Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in 2023 compared to the pre-COVID-19 pandemic periods of 2016 to 2019. We are continuing to execute on our used vehicle strategy, which differentiates us from the competition with proprietary tools, such as the RV Valuator, a focus on the development and retention of our service technician team, and investment in our service bay infrastructure.

The following table presents vehicle gross margin and unit sales mix for the three months ended December 31, 2023 and pre-COVID-19 pandemic periods for the three months ended December 31, 2019, 2018, 2017, and 2016 (unaudited):

The following table presents vehicle gross margin and unit sales mix for the year ended December 31, 2023 and pre-COVID-19 pandemic periods for the year ended December 31, 2019, 2018, 2017, and 2016 (unaudited):