Top

Camping World’s 2Q Sales Jump 20% to $1.3B

  Print Print

August 11, 2017 by   Leave a Comment

Camping World Holdings Inc. (CWH) reported double-digit increases in revenue and net income for the company’s second quarter.

Second Quarter Highlights

  • Total revenue increased 20.1% to $1.3 billion.
  • Gross profit increased 24.5% to $372.8 million and gross margin increased 102 basis points to 29.1%.
  • Income from operations increased 32.3% to $136.8 million and operating margin increased 98 basis points to 10.7%.
  • Net income increased 26.3% to $105.3 million, net income margin increased 40 basis points to 8.2%, and adjusted pro forma net income increased 41.6% to $77.7 million.
  • Diluted earnings per share was 84 cents and adjusted pro forma earnings per fully exchanged and diluted share increased 38.5% to 91 cents. 
  • Adjusted EBITDA increased 36.0% to $142.1 million and adjusted EBITDA margin increased 130 basis points to 11.1%.

Marcus Lemonis, chairman and chief executive officer of the Lincolnshire, Ill.-based company, stated, “Exceptional record-breaking results clearly demonstrate the power and leverage of our unique operating model, which sells a comprehensive portfolio of products and services across a growing database of consumers being driven by our national network of retail locations that cater to RV, boating and outdoor enthusiasts. While our business model has traditionally been focused on the RV owner, we see a much broader opportunity to leverage our products and services across the larger base of outdoor lifestyle consumers.”

Units and Average Selling Prices

In comparing second quarter results compared with the comparable period in 2016, new vehicle units sold increased 38.2% to 21,930 and the average selling price of a new vehicle decreased 4.5% to $34,787. The increase in new vehicle units sold was primarily driven by strong consumer demand for new vehicles and a shortage of supply of used vehicles. The decrease in the average selling price of a new vehicle was driven by a higher mix of lower-priced towable units.

Used vehicle units sold decreased 8.4% to 9,073 and the average selling price decreased 0.9% to $21,660 in the second quarter. The decrease in used vehicle units sold was primarily driven by reduced inventory availability resulting from fewer trades on new vehicle unit sales and the disposition of the automobile unit business as a result of the distribution of the AutoMatch business in the second quarter of 2016.

Consumer services and plans revenue increased 5.9% to $48.1 million from $45.4 million in the second quarter of fiscal 2016. The increase was primarily driven by increases in vehicle insurance and Good Sam TravelAssist programs reflecting increased policies in force, roadside assistance contracts and other increases.

Retail revenue increased 20.7% to $1.2 billion from $1 billion in the second quarter of fiscal 2016. Within the retail segment, new vehicle revenue increased 31.9% to $762.9 million, used vehicle revenue decreased 9.2% to $196.5 million, parts, services and other revenue increased 10.4% to $174.2 million and finance and insurance revenue increased 44.5% to $101 million.

Continued strong consumer demand for recreational vehicles combined with a shortage of supply of used vehicles benefited new vehicle and finance and insurance sales and decreased used vehicle sales. Finance and insurance net revenue as a percentage of total new and used vehicle revenue increased to 10.5% from 8.8% in the second quarter of fiscal 2016, and benefited from a sales mix shift toward lower-priced new towable units and better integration of the finance and insurance selling process.

Same store sales of the 115 retail locations that were open both at the beginning of the preceding fiscal year and at the end of the second quarter of fiscal 2017 increased 10.6% to $1.1 billion. The increase in same store sales at retail locations was primarily driven by the increased volume of new towable units sold, and, to a lesser extent, revenue increases from finance and insurance, partially offset by a decrease in same store sales from used vehicle units sold.

The company operated a total of 137 retail locations and two Overton’s retail locations as of June 30 compared to 120 retail locations at June 30. In the second quarter, the company added 10 RV-centric locations from completed acquisitions, one RV-centric location from a greenfield opening, and two Overton’s retail locations.

Gross Profit

Gross profit increased 24.5% to $372.8 million and gross margin increased 102 basis points to 29.1% from the second quarter of fiscal 2016. Consumer services and plans gross profit increased 5.2% to $27.5 million and gross margin decreased 40 basis points to 57.3% of segment revenue from the second quarter of fiscal 2016. The decrease in consumer services and plans was primarily due to reduced gross margin from consumer magazines, partially offset by an increase from the vehicle insurance and TravelAssist programs.

Retail gross profit increased 26.3% to $345.3 million and gross margin increased 124 basis points to 28.0% of segment revenue from the second quarter of fiscal 2016. The increase in retail gross margin was driven primarily by a 173 basis point increase in the finance and insurance penetration rate to 10.5% of vehicle sales from 8.8% of vehicle sales in the second quarter of fiscal 2016, and a 593 basis point increase in gross margin from used vehicle unit sales to 27.0% from the second quarter of fiscal 2016.

Operating Expenses

Total operating expenses increased 20.4% to $236.1 million from the second quarter of fiscal 2016. Selling, general and administrative (SG&A) expenses increased 20% to $228.4 million from $190.3 million in the second quarter of fiscal 2016.

The increase in SG&A expenses was primarily driven by: additional expenses associated with the incremental 17 dealerships and two Overton’s locations operated during the second quarter of 2017 versus the prior year period; $2.1 million of transaction expenses associated with the acquisition into new or complementary markets, including the Gander Mountain acquisition; and $1.4 million of pre-opening and payroll costs associated with the Gander Mountain Acquisition.

SG&A expenses as a percentage of total gross profit decreased 227 basis points to 61.3%, which includes the impact of the $2.1 million of transaction expenses and the $1.4 million of pre-opening and payroll costs associated with the Gander Mountain acquisition. Depreciation and amortization expense increased 25.7% to $7.6 million.

Interest & Other Expenses

Floor plan interest expense increased 22.3% to $6.6 million from $5.4 million in the second quarter of fiscal 2016. The increase was primarily related to a 7.8% increase in average inventory for the second quarter compared to the prior year period, primarily due to the 17 additional dealership locations opened over the last 12 months, partially offset by a 6-basis point decrease in the average floor plan borrowing rate. Other interest expense decreased 16.1% to $10.6 million from $12.6 million in the second quarter last year primarily related to a decrease in average debt outstanding, and a 91 basis point decrease in the average interest rate.

For the full report click here.

[Slashdot] [Digg] [Reddit] [Facebook] [Google] [StumbleUpon]

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!





*

Bottom