Executive Summary / Key Takeaways

• Camping World Holdings, Inc. ($CWH) is executing a strategic pivot, emphasizing its high-margin used RV business and leveraging advanced AI to drive efficiency and profitability, aiming for a mid-cycle Adjusted EBITDA target of $500 million on its current store base.
• The company delivered robust financial performance in Q3 2025, with Adjusted EBITDA growing over 40% to $95.7 million and net leverage significantly reduced by nearly 3 turns year-to-date, demonstrating strong operational execution amidst a challenging macroeconomic backdrop.
• CWH's differentiated approach, including its proprietary Good Sam RV Valuator, extensive contract manufacturing, and new AI investments, provides a competitive moat, enabling market share gains and superior inventory management in both new and used RV segments.
• Despite a conservative 2026 Adjusted EBITDA floor of $310 million due to new RV market uncertainties, management has outlined clear upside drivers, including an additional $15 million in SG&A savings from technology, significant used unit sales growth, and accretive dealership acquisitions.
• Key risks include ongoing macroeconomic volatility, potential impacts from rising OEM new RV prices (5-7% for Model Year 2026), and the need to fully remediate a material weakness in internal controls over income tax.

The Resilient Road Ahead: Camping World's Evolving Strategy

Camping World Holdings, Inc. (CWH), founded in 1966 and headquartered in Lincolnshire, Illinois, has cemented its position as the world's largest retailer of recreational vehicles (RVs) and related products and services. Operating under its iconic Camping World and Good Sam brands, the company's vision is to simplify and enhance the RVing and outdoor adventure lifestyle. This mission is underpinned by an extensive national network of dealerships, service centers, and a robust online presence, all supported by a highly trained workforce. The company's journey has been marked by strategic acquisitions and divestitures, shaping its current competitive advantages and market positioning.

The RV industry, while resilient, is currently navigating a complex landscape characterized by uneven consumer sentiment, fluctuating interest rates, and rising OEM new pricing. Wholesale shipments of new RVs for 2024 increased by 6.6% over 2023 to 333,733 units, with a modest 1% increase projected for 2025 to approximately 337,000 units. However, new RV registrations in the U.S. saw a slight decline of 0.3% for the twelve months ended August 31, 2025, while used RV registrations decreased by 2.9% over the same period. This environment underscores the importance of CWH's strategic flexibility and its focus on affordability, as consumers increasingly prioritize value and monthly payments in their purchasing decisions.

Technological Edge and Operational Excellence

CWH's competitive differentiation is deeply rooted in its innovative operational strategies and technological investments. Central to its used RV business is the Good Sam RV Valuator, a proprietary data-driven platform developed over more than a decade, leveraging two decades of historical information to predict residual values. This technology provides real-time, precise valuations for used RVs, enabling CWH to refine its procurement strategies, understand the arbitrage between new and used markets, and effectively manage its inventory. This directly supports the company's goal of expanding used RV gross margins and increasing inventory turns.

Furthermore, CWH''s contract manufacturing strategy acts as a significant technological differentiator in product development. What began as a means to offer private-label RVs at competitive prices has evolved into an "innovation sandbox" for testing new segments, floor plans, and ideas. This approach allows CWH to identify and address market elasticity across all RV type codes—from entry-level travel trailers to Class A motorhomes—by developing exclusive products tailored to specific consumer preferences and desired monthly payments. This has been a key driver of market share gains and outperformance in new unit sales, providing margin protection and accelerating the trade cycle, which in turn feeds the used RV supply chain.

Recent investments in agentic AI functions and enterprise AI are poised to further enhance operational efficiency. These initiatives aim to deliver substantial cost savings, with an estimated $15 million in additional SG&A reductions projected for 2026. By leveraging its vast repository of customer and operational data, AI is expected to improve staffing efficiency, expedite customer interactions, and enable more intelligent sales processes, ultimately enhancing the overall customer experience and conversion rates.

Financial Performance and Strategic Momentum

CWH's financial performance in the third quarter of 2025 reflects the early successes of its strategic adjustments. Total revenue for the three months ended September 30, 2025, reached $1.81 billion, a 4.7% increase from the prior year. This growth was primarily driven by the RV and Outdoor Retail segment, which saw its revenue climb to $1.75 billion, a 5.6% increase. The Good Sam Services and Plans segment also contributed positively, with revenue increasing 3.3% to $52.5 million.

Adjusted EBITDA for the third quarter surged by over 40% to $95.7 million, a significant improvement from $67.5 million in Q3 2024. This strong bottom-line growth was a direct result of increased unit volumes, disciplined margin performance, and aggressive cost controls. The RV and Outdoor Retail segment was a major contributor to this, with its Segment Adjusted EBITDA increasing by 60.5% to $77.2 million. While Good Sam Services and Plans Segment Adjusted EBITDA decreased by 8.7% to $21.6 million, this was attributed to strategic investments in the roadside assistance business and higher claims costs, with management anticipating margin stabilization and earnings growth in 2026.

A key highlight of the recent performance is the robust growth in used vehicle sales. For the three months ended September 30, 2025, used vehicle revenue increased by 32.9%, driven by a corresponding increase in unit sales, despite a slight decrease in average selling price. Used vehicle gross margins also saw a modest improvement. This momentum is a direct outcome of CWH's enhanced used procurement methodology, which has resulted in record levels of used RVs purchased. The company's balance sheet has also strengthened considerably, with cash and cash equivalents at $230.5 million as of September 30, 2025. Furthermore, CWH owns $427 million of used inventory outright, $173 million of parts inventory, and approximately $260 million of real estate without an associated mortgage. Net leverage has been reduced by nearly 3 turns since the beginning of 2025, with a stated goal to reach 4x or below by the end of 2026.

Competitive Landscape and Strategic Positioning

Camping World operates in a highly competitive environment, facing both direct RV retailers and manufacturers, as well as indirect competitors in the broader outdoor recreation market. Key publicly traded direct competitors include Thor Industries (THO), Winnebago Industries (WGO), and Polaris Inc. (PII).

CWH's retail-centric model, with its extensive dealership network and integrated service offerings, provides a distinct advantage over manufacturing-focused rivals like Thor and Winnebago. While manufacturers excel in product innovation and supply chain control, CWH's strength lies in its direct customer engagement, comprehensive ecosystem (including financing, service, and loyalty programs), and ability to offer a diverse inventory of both new and used RVs. This allows CWH to capture a broader segment of the market and build stronger customer loyalty. The company has achieved significant market share gains, selling nearly 14% of all new and used RVs in North America year-to-date, and has set an ambitious medium-term goal of 20% market share.

Against powersports manufacturers like Polaris, CWH's focus on the holistic RV lifestyle and integrated services provides a deeper engagement with RV enthusiasts. CWH's ability to offer bundled solutions, from sales to maintenance and protection plans, creates a more convenient and value-driven experience for customers. The company's "Good Sam Club" membership organization further reinforces this, fostering a community and driving recurring revenue streams that are less susceptible to the cyclicality of new unit sales.

CWH's contract manufacturing strategy allows it to be more agile in responding to consumer demand for specific price points and features, often outperforming competitors who are tied to traditional OEM product cycles. This strategic flexibility, combined with its data-driven inventory management and AI-powered efficiencies, positions CWH to capitalize on market shifts and maintain its leadership in the retail segment.

Outlook, Guidance, and Risks

Camping World's outlook for 2026 is anchored by a deliberately conservative Adjusted EBITDA floor of $310 million. This cautious approach reflects ongoing macroeconomic uncertainties, particularly regarding interest rates and potential tariffs, which could impact the new RV market. OEM new pricing is expected to rise by 5-7% for Model Year 2026 on a like-for-like basis, which could create some resistance among consumers. The company anticipates the new RV market to be down in the low-to-mid single digits in 2026, consistent with 2025 trends.

However, management has identified several key upside opportunities that could drive performance above this floor:

• SG&A Cost Takeouts: An additional $15 million in cost savings is projected for 2026, primarily from investments in marketing technology, new CRM systems, and agentic AI.
• Used RV Sales Growth: The used business is expected to continue its high-single-digit to low-double-digit growth trajectory, with every 1,000 additional used units sold beyond the outlook potentially yielding $6 million in Adjusted EBITDA.
• Dealership Acquisitions: While not embedded in preliminary models, CWH sees a "percolating pipeline" of accretive dealership acquisitions, aiming to return to a pace of 10+ new doors per year.
• New RV Sales Outperformance: Despite a conservative forecast, CWH's track record of exclusive, value-driven products suggests potential for outperformance in the new RV market.

The company has reaffirmed its 2025 guideposts, targeting 10-15% unit growth in used RVs, low single-digit growth in new RVs, significant improvement in total gross profit, and a 600-700 basis point improvement in SG&A. It aims to sell over 130,000 units in 2025, achieving a new record of 12% combined market share. New ASPs are targeted at $40,000 and used ASPs at $32,000 for the full year. New gross margins are expected to be in the 13-14% range, with used gross margins north of 19%.

Key risks include the ongoing material weakness in internal controls over income tax, which remains unremediated as of September 30, 2025. Litigation risks, such as the ongoing appeal by Weissmann and Tumbleweed regarding arbitration awards, also present potential financial exposures. Furthermore, the company's reliance on major financial institutions for cash holdings, with deposits exceeding insured limits, poses a risk in volatile market conditions. Seasonality inherently impacts revenue and cash flows, with peak sales in spring and summer. Management, however, remains confident in its "nuclear options" and playbooks to mitigate these risks and achieve its targets.

Conclusion

Camping World Holdings stands at a pivotal juncture, strategically repositioning itself to capitalize on evolving consumer preferences and market dynamics. By doubling down on its high-margin used RV business, aggressively pursuing cost efficiencies through AI, and leveraging its unique contract manufacturing capabilities, CWH is building a more resilient and profitable enterprise. The company's strong Q3 2025 financial performance, marked by significant Adjusted EBITDA growth and deleveraging, underscores the effectiveness of its disciplined execution. While macroeconomic uncertainties persist, CWH's clear strategic roadmap, coupled with its technological differentiators and commitment to market share expansion, positions it for sustained earnings growth. The path to a mid-cycle Adjusted EBITDA of $500 million is challenging but appears achievable, driven by a relentless focus on affordability, customer lifetime value, and operational excellence, making CWH a compelling consideration for discerning investors.