RV Sales Help Lift Good Sam 1Q Performance
The upturn in wholesale and retail sales of RVs has carried over to the service side with Good Sam Enterprises LLC reporting surges in a number of company metrics.
During an investors’ conference call today (May 16) that followed up Good Sam’s first quarter results announced on Tuesday, Chairman and CEO Marcus Lemonis said the company is seeing upticks from sales of roadside assistance and membership in the Good Sam Club right through to registrations for the upcoming Good Sam Rally in Syracuse, N.Y.
Good Sam reported revenues for the quarter, ending March 31, totaled $114 million, up 3.6% from a year earlier. Lemonis said the positive gains were a reflection of the public’s overall acceptance of Good Sam’s products and services.
Among the improvements:
• Sales from all Camping World stores rose 8.4%, with same-store sales up 4%.
• Retail transaction counts rose 7%.
• Good Sam Club memberships grew by 6.8%.
Perhaps the most surprising positive development came in the firm’s RV rally sector. Lemonis reported that advance reservations for the Syracuse Camping World/Good Sam Rally June 13-16 at the New York State Fairgrounds has already outpaced the company’s best rally in the past five years with “a shocking number of reservations.”
The figures are shocking in part because Good Sam “significantly” raised the cost of vendor booth space, but has not felt the downward pressure in bookings he expected, Lemonis said. It will be the company’s first RV rally in the Northeast.
Lemonis called the rally business “a form of advertising that should pay for itself and not cost us $400,000, which it cost us last year.” The final rally for 2013 is Oct. 17-20 in Atlanta.
On a year-over-year basis, Lemonis noted further growth metrics:
• Roadside assistance policies grew to 427,350 compared to 368,439 a year ago with a renewal rate of 91%. Lemonis hopes to hit the 500,000 mark within the next year.
• Extended warranty policyholders totaled 51,829 compared to 49,700 a year ago.
• Good Sam Club membership now stands at 1,357,110, compared to 1,274,079 a year ago.
Lemonis further noted that Good Sam opened three Camping World stores in the quarter, with eight others scheduled for the remainder of the year, bringing the total by year-end to 104. The company will reach the $7.8 million cap on capital expenditures mandated by its indenture agreement, but the Good Sam corporate owner has pledged another $2 million to $2.5 million to make up the difference to fund the expansion effort, Lemonis said.
Lemonis revealed a few disappointing results. One of them, a branding effort with NASCAR, is off to “a slow start” and Lemonis took the blame for the slow pace giving himself a grade of “C-minus” thus far.
He also said Good Sam is tweaking the fuel purchase program in tandem with Flying J. Almost 90,000 customers have signed on with “a nice uptick in retention” but the requirement for a separate card has been seen as a drawback. Good Sam plans to modify its Good Sam membership cards with a magnetic strip so members won’t have to carry an additional card, he said.