10-K: Camping World Holdings Reports Mixed Results in 2024, Focuses on Core RV Business

Camping World Holdings, Inc. reports a decrease in revenue and net income for 2024, while highlighting strategic shifts and growth potential in its Good Sam business.

Summary

• Camping World Holdings, Inc. (CWH) reported a decrease in total revenue from $6.23 billion in 2023 to $6.10 billion in 2024.
• Net loss was $(78.9) million in 2024 compared to net income of $52.9 million in 2023.
• The company operates 206 store locations as of December 31, 2024.
• CWH is focusing on its core RV business and sees growth potential in its Good Sam services and plans.
• The company sold its RV furniture business in May 2024 and entered into a supply agreement with the buyer.
• The company is planning to open twelve RV dealerships and close two RV dealerships in the first quarter of 2025.
• The company identified a material weakness in internal controls related to the measurement of deferred tax assets.
• The company is taking steps to remediate the material weakness in internal controls.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positives such as the strategic focus on the core RV business and growth potential in the Good Sam segment, the overall financial results show a decline in revenue and net income, and a material weakness in internal controls was identified.

Positives

• Good Sam Services and Plans revenue increased slightly.
• New vehicle revenue increased.
• The company is taking steps to remediate the material weakness in internal controls.
• The company is planning to open twelve RV dealerships and close two RV dealerships in the first quarter of 2025.

Negatives

• Total revenue decreased by 2.0% to $6.10 billion in 2024.
• Net loss was $(78.9) million in 2024 compared to net income of $52.9 million in 2023.
• Used vehicle revenue decreased by 18.5% to $1.61 billion.
• The company identified a material weakness in internal controls related to the measurement of deferred tax assets.
• Active Customers decreased from 4.96 million to 4.49 million.

Risks

• General economic conditions, including inflation and interest rates, could adversely affect the business.
• Fuel shortages or high fuel prices could negatively impact the RV industry.
• Changes in consumer preferences could lead to reduced sales.
• Competition in the RV market could reduce revenues and profitability.
• Delays in opening new store locations could have a material adverse effect.
• Failure to maintain the strength and value of the company's brands could have a material adverse effect.
• Cybersecurity risks could disrupt the business and lead to reduced sales and reputational damage.
• Material weaknesses in internal control over financial reporting could have a significant adverse effect on the business and the price of the common stock.

Future Outlook

The company expects Good Sam will continue to capitalize on the mutually beneficial relationship with the Camping World brand and store footprint but will be empowered to operate independently to drive growth. The company is planning to open twelve RV dealerships and close two RV dealerships in the first quarter of 2025.

Management Comments

• The greatest value to the Company can be achieved through retaining the Good Sam business.
• We have deepened our appreciation for the non-cyclical nature of the business and also recognize the large growth potential of the business over multiple vectors in the outdoor and recreational space.

Industry Context

The RV industry saw wholesale shipments increase by 6.6% in 2024 compared to 2023, according to the RV Industry Association.

Comparison to Industry Standards

• Comparable companies in the RV retail industry include Lazydays Holdings, Inc. and Blue Compass RV, Inc.
• Camping World's performance can be compared to these companies based on metrics such as revenue growth, gross margin, and EBITDA margin.
• The company's strategic shift towards its core RV business aligns with industry trends of focusing on high-demand products and services.
• The company's expansion through acquisitions is a common strategy in the fragmented RV retail market.

Management Changes

Corporate Governance

Legal Proceedings

• The company is engaged in various legal actions, claims and proceedings arising in the ordinary course of business.
• The company does not believe that the ultimate resolution of such matters will have a material adverse effect on its business, financial condition or results of operations.

Related Party Transactions

• FR leases various RV dealership locations from managers and officers.
• In October 2022, the Company purchased a property to be used as office space in Lincolnshire, Illinois, for $4.5 million from the Company's Chairman and Chief Executive Officer.
• The company paid Adams Outdoor Advertising, Inc., an entity for which Andris A. Baltins serves as a member of its Board of Directors, $0.1 million for both of the years ended December 31, 2024 and December 31, 2023 for advertising services.
• The company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, and a member of the Company's Board of Directors $0.1 million and $0.2 million for the years ended December 31, 2023, and 2022, respectively, for legal services.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue and net income.
• Employees may be affected by the restructuring and cost-cutting initiatives.
• Customers may benefit from the company's focus on its core RV business and the expansion of its Good Sam services.
• Suppliers may be affected by the company's changes in procurement practices and the sale of its RV furniture business.

Next Steps

• The company is planning to open twelve RV dealerships and close two RV dealerships in the first quarter of 2025.
• The company is taking steps to remediate the material weakness in internal controls.

Key Dates

Keywords

Camping World, RV, revenue, Good Sam, dealership, financial results, internal controls, EBITDA, inventory, acquisitions