Business Overview
Camping World Holdings, Inc. (CWH) is the world's largest retailer of recreational vehicles (RVs) and related products and services. Founded in 1966, the company has grown to become a dominant player in the RV industry, offering a comprehensive range of products and services to cater to the needs of RV enthusiasts and outdoor adventurers.
Camping World operates through two reportable segments: Good Sam Services and Plans, and RV and Outdoor Retail. The Good Sam Services and Plans segment primarily generates revenue from the sale of emergency roadside assistance plans, commissions on property and casualty insurance programs, travel assist programs, extended vehicle service contracts, vehicle financing and refinancing assistance, and consumer publications and directories. The RV and Outdoor Retail segment derives revenue from the sale of new and used RVs, commissions on finance and insurance contracts related to RV sales, RV service and collision work, the sale of RV parts, accessories, and supplies, and the sale of Good Sam Club memberships and co-branded credit cards.
Camping World's origins can be traced back to the combination of the Good Sam Club, founded in 1966, and Camping World, which had 26 store locations by 1997. In 2011, the company underwent a significant expansion when it combined with FreedomRoads, a successful RV dealership business founded in 2003. This merger created the largest provider of products and services for RVs in North America.
Since 2011, Camping World has continued to expand its footprint of RV dealerships through new store openings, including greenfield locations, as well as acquisitions. However, the company faced a strategic shift in 2019 when it decided to refocus its business around its core RV competencies. This involved closing locations where the company did not have the ability to sell and/or service RVs at a sufficient capacity. The store closures and divestitures relating to this strategic shift were completed by the end of 2021, with the exception of certain lease termination costs and other associated costs.
More recently, in 2023, Camping World implemented plans to exit and restructure operations of its indirect subsidiary, Active Sports, LLC, a specialty products retail business. The activities under this restructuring were substantially completed by the end of 2023. Additionally, the company has gained operational efficiencies by exiting the manufacture of RV furniture and focusing its resources on the sourcing and sale of its RV and aftermarket accessory products.
Camping World's strategy has been to build a business that makes RVing and other outdoor activities fun and easy. The company strives to provide a unique and comprehensive assortment of RV products and services, operate a national network of RV dealerships and service centers, and focus on delivering exceptional customer service. This approach has allowed Camping World to establish itself as a one-stop-shop for the RV lifestyle, catering to the needs of both new and experienced RV enthusiasts.
Financials and Growth Initiatives
In the fiscal year ended December 31, 2024, Camping World reported total revenue of $6.10 billion, a slight decrease from the previous year's $6.23 billion. However, the company's adjusted EBITDA for the year was $178.84 million, down from $286.21 million in the prior year. The decline in adjusted EBITDA was primarily due to increased costs and the impact of the COVID-19 pandemic on the company's operations.
The company's performance in the fourth quarter of 2024 showed some positive signs. Q4 2024 revenue grew 9% year-over-year to $1.20 billion, driven primarily by an 8% increase in new unit sales and an 11% increase in used unit sales. However, the quarter resulted in a net loss of $31.60 million. New vehicle gross margin was 15.2% and used vehicle gross margin was 18.7% in Q4 2024.
Breaking down the performance by segment, the Good Sam Services and Plans segment accounted for 3.2% of total revenue in 2024, while the RV and Outdoor Retail segment accounted for 96.8%. The Good Sam Services and Plans segment saw a slight increase in revenue in 2024, driven by increased contracts in force for the Good Sam Insurance Agency programs and the introduction of a new tire rescue roadside assistance program. However, this was partially offset by reduced contracts in force for the traditional roadside assistance programs.
In the RV and Outdoor Retail segment, new vehicle revenue increased in 2024 primarily due to a 20% increase in the number of new vehicles sold, partially offset by an 8.6% decrease in the average selling price per new vehicle. Used vehicle revenue decreased, primarily due to a 10.2% reduction in the number of used vehicles sold and a 9.2% decrease in the average selling price per used vehicle. Products, service and other revenue decreased, mainly due to the Active Sports Restructuring, the divestiture of the RV furniture business, and fewer used vehicles sold leading to a decline in retail product attachment to vehicle sales. Finance and insurance revenue and gross profit increased, primarily as a result of an increased number of contracts sold from the increased vehicles sold.
Despite the challenges, Camping World has remained focused on its growth initiatives. In 2024, the company expanded its national network of RV dealerships and service centers, opening 17 new locations and closing 13, for a total of 206 locations as of December 31, 2024. The company has also been actively pursuing acquisitions to further strengthen its market position, completing the acquisition of several RV dealerships in 2024 and early 2025.
Looking ahead, Camping World is confident in its ability to deliver strong financial performance in the coming years. The company achieved a record combined new and used market share of 11.2% in 2024 and has set a goal of reaching 12% market share in 2025. This ambitious target involves selling over 130,000 units in 2025, up from 121,500 in 2024. Camping World is targeting an annual average selling price (ASP) of $40,000 on new RVs and $32,000 on used RVs.
For 2025, Camping World has reaffirmed its guidance to deliver 10-15% unit growth on used RVs, low single-digit growth on new RVs, significant improvement in total gross profit, and a 600-700 basis point improvement in SG&A as a percentage of gross profit. The company expects to see explosive EBITDA growth in Q1 2025 compared to the prior year, driven by gross margin and SG&A improvements. Additionally, Camping World intends to close 4-6 additional rooftops by the end of spring 2025 as part of its ongoing optimization efforts.
As of December 31, 2024, Camping World had a cash balance of $208.42 million and maintained a $65 million revolving credit facility, of which $22.75 million was available. This liquidity position provides the company with financial flexibility to pursue its growth initiatives and navigate potential market challenges.
Risks and Challenges
Like any business, Camping World faces a number of risks and challenges that could impact its performance. These include the cyclical nature of the RV industry, which is influenced by various economic factors such as consumer confidence, interest rates, and fuel prices. The company is also exposed to competition from other RV dealers, as well as from mass merchandisers and online retailers offering similar products and services.
Furthermore, Camping World's business is subject to a complex regulatory environment, with the company required to comply with various federal, state, and local laws and regulations related to the sale, transportation, and marketing of RVs and other products. Any failure to comply with these regulations could result in significant fines, penalties, or other legal actions.
Finally, the company's growth strategy, which includes the acquisition of additional RV dealerships, carries inherent risks. Integrating new acquisitions and realizing the expected synergies and benefits can be challenging and may not always be successful.
Industry Trends and Outlook
The RV industry has shown resilience and growth potential, with wholesale shipments of new RVs reaching 333,730 units in 2024, a 6.6% increase from 2023. However, Camping World experienced a 4.3% decrease in the average sale price of new vehicles during fiscal year 2023 compared to 2022, driven by more price-sensitive customers in a higher interest rate environment.
Looking ahead, Camping World expects the industry retail demand to be relatively flat year-over-year in 2025, within a tight band of 345,000 to 355,000 units. This forecast suggests a stable market environment, which could provide a solid foundation for the company's growth initiatives and market share expansion plans.
Conclusion
Camping World Holdings, Inc. is a well-established and dominant player in the RV industry, offering a comprehensive suite of products and services to cater to the needs of RV enthusiasts. Despite facing various challenges, including a slight decrease in overall revenue and adjusted EBITDA in 2024, the company remains focused on its growth initiatives, including expanding its national network of dealerships and service centers, optimizing its operations, and pursuing strategic acquisitions.
The company's guidance for 2025 reflects confidence in its ability to drive significant improvements in unit sales, gross profit, and operational efficiency. With a target of achieving 12% market share and expectations for explosive EBITDA growth, Camping World is positioning itself for a strong recovery and continued leadership in the RV industry.
While the RV industry is subject to cyclical fluctuations and economic sensitivities, Camping World's strong market position, diversified business model, and commitment to innovation position the company well for continued success in the years ahead. As the company navigates the evolving landscape of the RV market and consumer preferences, its focus on operational efficiency and strategic growth initiatives should help drive long-term value for shareholders and enhance its position as the go-to destination for RV enthusiasts.