Camping World Holdings ((CWH)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Despite significant growth in adjusted EBITDA and a robust cash position, Camping World Holdings faces challenges in new RV demand and macroeconomic uncertainty, impacting its outlook. However, the company remains confident in leveraging used RV sales and operational efficiencies to drive future growth.
Significant Growth in Adjusted EBITDA
Camping World Holdings reported a remarkable 40% growth in adjusted EBITDA, reaching $95.7 million. This increase highlights the company’s strong operational performance and efficiency improvements, showcasing its ability to navigate challenging market conditions effectively.
Record Unit Volume in RV Sales
The company achieved record unit volume in RV sales, capturing nearly 14% of the new and used RV market in North America. This success underscores the consumer focus on value and affordability, positioning Camping World as a leader in the RV industry.
Improved Net Leverage
Camping World has successfully reduced its net leverage by nearly three turns since the beginning of the year. This achievement was made possible through strategic debt paydown, earnings improvement, and cash generation, strengthening the company’s financial position.
Potential Upside in 2026
Looking ahead, the company anticipates potential upside from SG&A cost reductions, used RV sales, dealership acquisitions, and new RV sales. These initiatives are expected to contribute positively to the company’s financial performance in the coming years.
Strong Cash Position
Camping World ended the quarter with a strong cash position, boasting $230 million on the balance sheet, $427 million in used inventory owned outright, and nearly $260 million in real estate without an associated mortgage. This financial stability provides a solid foundation for future growth.
New RV Demand Decline
The company is experiencing resistance in new RV demand due to rising prices and macroeconomic factors. This has led to a conservative outlook for 2026, as Camping World navigates these challenges in the market.
Lapping Previous Year Benefits
Camping World will face financial comparisons impacted by lapping the Good Sam loyalty breakage benefits and F&I actuarial benefits experienced last year. This factor will play a role in the company’s financial performance assessments moving forward.
Gross Margin Pressures
While new average selling prices (ASPs) improved, they resulted in a slight decline in gross margin percentages due to a richer mix. This highlights the balancing act the company faces in maintaining profitability while offering competitive pricing.
Uncertain Macroeconomic Environment
Interest rates, inflation, and potential government actions contribute to an uncertain macroeconomic environment, affecting the company’s outlook for 2026. These factors necessitate a cautious approach as Camping World plans its future strategies.
Forward-Looking Guidance
For 2026, Camping World anticipates an adjusted EBITDA floor of approximately $310 million, excluding potential upsides from cost savings, used unit sales, dealership acquisitions, and new unit sales. The company plans to leverage its used RV supply chain, with expectations that each additional 1,000 used units sold could yield roughly $6 million in adjusted EBITDA. Additionally, $15 million in cost savings is anticipated through marketing technology and AI implementation. The company remains focused on deleveraging and improving financial performance through its market-leading used sales and Good Sam businesses.
In summary, Camping World Holdings’ earnings call reflects a positive sentiment driven by significant growth in adjusted EBITDA and a strong cash position. Despite challenges in new RV demand and macroeconomic uncertainty, the company is poised to leverage its strengths in used RV sales and operational efficiencies to drive future growth. With a strategic focus on cost savings and market leadership, Camping World is well-positioned to navigate the evolving landscape of the RV industry.