Stock Story -
Recreational vehicle (RV) and boat retailer Camping World (NYSE:CWH) fell short of analysts' expectations in Q2 CY2024, with revenue down 5% year on year to $1.81 billion. It made a GAAP profit of $0.22 per share, down from its profit of $0.64 per share in the same quarter last year.
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Camping World (CWH) Q2 CY2024 Highlights:
- Revenue: $1.81 billion vs analyst estimates of $1.86 billion (3.1% miss)
- EPS: $0.22 vs analyst estimates of $0.44 (-$0.22 miss)
- Gross Margin (GAAP): 30.3%, in line with the same quarter last year
- Free Cash Flow of $129.7 million, up from $1.01 million in the same quarter last year
- Locations: 215 at quarter end, up from 203 in the same quarter last year
- Market Capitalization: $1.03 billion
Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Vehicle RetailerBuying a vehicle is a big decision and usually the second-largest purchase behind a home for many people, so retailers that sell new and used cars try to offer selection, convenience, and customer service to shoppers. While there is online competition, especially for research and discovery, the vehicle sales market is still very fragmented and localized given the magnitude of the purchase and the logistical costs associated with moving cars over long distances. At the end of the day, a large swath of the population relies on cars to get from point A to point B, and vehicle sellers are acutely aware of this need.
Sales GrowthCamping World is larger than most consumer retail companies and benefits from economies of scale, giving it an edge over its competitors.
As you can see below, the company's annualized revenue growth rate of 4.5% over the last five years was sluggish , but to its credit, it opened new stores and expanded its reach.
This quarter, Camping World missed Wall Street's estimates and reported a rather uninspiring 5% year-on-year revenue decline, generating $1.81 billion in revenue. Looking ahead, Wall Street expects sales to grow 8.1% over the next 12 months, an acceleration from this quarter.
Same-Store SalesSame-store sales growth is an important metric that tracks demand for a retailer's established brick-and-mortar stores and e-commerce platform.
Camping World's demand has been shrinking over the last eight quarters, and on average, its same-store sales have declined by 12.8% year on year. This performance is quite concerning and the company should reconsider its strategy before investing its precious capital into new store buildouts.
Key Takeaways from Camping World's Q2 Results We enjoyed seeing Camping World exceed analysts' gross margin expectations this quarter. On the other hand, its revenue and EPS missed Wall Street's estimates, sending the stock down 5.7% to $21.56 immediately following the results. Overall, this quarter could have been better.
