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CWH Camping World

Participants
Marcus Lemonis Chairman and Chief Executive Officer
Brent Moody President
Tom Wolfe Chief Financial Officer
Rick Nelson Stephens
David Tamberrino Goldman Sachs
Craig Kennison Baird
Seth Woolf Northcoast Research.
Brett Andress KeyBanc Capital Markets
Gerrick Johnson BMO Capital Markets
Jim Chartier Monness, Crespi & Hardt
Call transcript
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Operator

Good afternoon and welcome to Camping World Holdings Conference call to discuss financial results for the third quarter of 2018. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the company. Participating in the call today is Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Tom Wolfe, Chief Financial Officer; and Roger Nuttall, President, Dealership segment. the to turn now will call Mr. over I to get started. Moody

Brent Moody

include Act regarding afternoon Securities A GAAP are from and forward-looking financial opportunities, financial related in and base noted. meaning covering and this website. over XXXX I measures otherwise performance. the of results turn Investor retail of and call in good company’s with found growth of important Actual performance. All indicated our of and you, forward-looking may third contain may statements on Management’s plans, obligation release SEC. share, these on including quarter we will those can press our unless Litigation press results update remarks a abilities investors and certain factors, differ operating the these financial earnings of release that measures on made non-GAAP statements to Form of to afternoon anticipated issued our call, by Relations XXXX financial represent acquisitions to the Thank of share may customer non-GAAP in industry and XXXX. adjusted result statements quarter EBITDA, the expenses, results included remarks the comparable business as may views per and them. everyone. measures the directly comparisons as our increases release today’s results our only These be Any also diluted, and on we statements goals, reports on be call against to market which as undertake openings, Factors copy a trends, XXXX note Reform now that those Reconciliations within Risk increase third in the in earnings today, section and was Private Marcus. discussed other are our the in of no Please section important materially customer and will file location and we diversification to our various website. company’s our borrowings to the third our XX-K assess adjusted be quarter referring our most believe such financial this

Marcus Lemonis

your and We Thanks, good World. more your afternoon Camping everyone. interest and appreciate in importantly time

Over for us a talked a to to grow delivers and the rising lot the and we’ve in last is focus a easier operating and on business our most solid the workplace profitable to flows metric. as sustainable designed may several infrastructure, commitment publicly of and customer, Well, environment, profitability. it flows margins, have qualities cash growth growth, consistent our unique model how and about cash important deliver been years, long-term our on model based healthy healthy our a the maintaining a strong true that is our long-term

margin, in RV the are We that and we the in wide the largest have. has toolbox resources world combined by no very and RV a tools the company dealer

business unique model database promotional inventory, combines noise of channel X.X excess products In RV XXXX, of with in recurring RV tariffs customers. brands spent experienced have high-margin has retail that the industry revenue XX excess massive and a services, around million a comprehensive the creating iconic last and activity. a We active years portfolio industry and heavy

how go, business. focused these are manage we come on we laser and trends While macroeconomic broader our

After towable units in almost excess XX.X% opening stores, units reduction beginning our at our of quarter. XX.X. RV and acquisitions new million of A $XXX drove For down our $XXX million. over $X.X discipline the motorized was just to end inventory down other new and the number asset billion. With inventory several of inventory new at making management and focus of example, our year, the the on in that down

selling imagine, us RV positions for As you and inventory buying coming and opportunistic strategically quarters. aggressive the in this would

and While by activity and consolidated we maintain billion, reduction third revenue this this others, allowed importantly, at the believe to in strongly most third X.X% profitability. drastic in able to that to quarter. discipline inventory bottom discounting against us us top the we’re cost margin increased promotional gross In line healthy and has line XX.X% margins revenue healthy quarter, heavy $X.X maintain

than adjusted on above the in focus expense us EBITDA third management $XXX consensus margin Our more of the analysts’ estimates. allowed quarter, to and slightly rigorous achieve million

On store XX% X.X%. Despite new is particularly vehicle up million million new As in more quarter. sales store per I paying sales we were the margins inventory, and RV towable milestone by some our highlight for our Sam quarter, down levels, motorized the drove motorized, inventory new new One in same our on members. said inventory pressure the active on the earlier, in basis, promotional we only significant quarter company Club units with with pressure and drastic same of prices X.X were overall, coupled maintaining healthy down new motorized RVs Good new customers. focus almost of two XX.X%. than intentionally sold more expected put of new towable definitely a with were up ended units dealership the Lower a than unit motorized X.X% sales destocking

our our levels forward. plan achieved We mix with in inventory power both resources model. we’ve available that going and all Now, use buying to target of

into infrastructure, down several technology. wind we we’ve XXXX, leading made categories the investments and new As

XXXX, invest technology expect to continue make CapEx will As to we head better. us accretive dealership relevant and RV into pursue that and opportunistic control we in acquisitions,

attractive we Moody. will on to deleveraging share repurchase with areas to to and capital consider will foregoing, now programs. addition, investment, always returns call our the I as over such invest the turn In Brent

Brent Moody

Thank you, Marcus.

boost we priorities, locations, of Good of opening in out recently products capacity in of transactions, expanding additional growth one profitable two have strategic Illinois Washington base, Reno, Nevada. our acquisition for our size Illinois, third that Wisconsin in focused service close into will three of which we file offerings closed some signed Sierra and and Southern we market. and increasing number through additional Antioch, on and Illinois new Dekalb, closed our developing we a purchase and and on we As primarily Sam and our acquisitions customer the and we driving service are growing all the RV distribution. the Northern to on Pascoe, XXXX XXXX, sales been pursuing channels October, around In In quarter, market A time. head expanding long-term our agreement acquire Club accomplished

next in the a we we a retail days in a expand Rockford, to World remaining open quarter number industry a to we’ll hesitate process. Camping XXX in to third opportunities a we various continue which the area with our smaller total Gander ended one primarily as close to to stores. our store are we Consistent in messaging operators, stages continue fragmented in Outdoors our a Illinois of plan prior number also stores is closed of feel locations. We new comprised will deals the and actively independent presence. further We to with of that and see our monitor the profitability. path and acquisition clear location of In do in continue have quarter Illinois stores, involved We dealership XX not of monitor we not highly

our business. in locations, further retail revenue $XX over quarter investments our number In we e-commerce of in and growing are to growth. continue to E-commerce develop and distribution was making the both support technology addition, we and additional grow million to

distribution web through platform a very single turn I’ll excited to offer results our to more across capabilities and brands consolidate now to designed you inventory our over in move financial and about detail. and the are our call our walk all to We us allow to Tom channels. all

Tom Wolfe

Brent. everyone. And Thanks, good afternoon

merchandise of and of was increased we The segment The RV sale and RV touch $X.XX Dealership third to said, X.X% products, business On segments; at retail insurance realigned new the dealerships XX.X%, $X outdoor into XX% basis, that three the to and quarter, quarter. unchanged revenue services products through remained and the from from XXX new our With locations sold the the margin Consumer to Plans me for sale revenue reportable $XXX.X online. and flat segment finance, services a drives highlights gross the same-store billion Consumer primarily protection consolidated decreased financial billion, During and revenue total RV Retail. Services of parts our the and X.X% to Gross RVs, and and derives Plans, $XXX.X million. primarily Services profit at items a few other let on segment EBITDA dealership. increased revenue X.X% decreased parts million. new retail adjusted used and and and

programs. travel XX.X% increased Looking XX.X% inter-segment Plans travel and XX.X%. our segment and roadside at primarily policies Club basis Sam the to additional from million force contracts assist of Revenue margin and Good to million X from after memberships Gross and – transactions. profit vehicle assistance, $XX elimination increased additional XXX to the our in increased gross Services and Consumer points $XX. insurance

Florence partially Looking elimination and strategy profit margin disciplined used vehicle XX and levels, RV transactions X.X% at X.X% and gross the Dealership managed XX.X%. in in a to Tightly points decreased new revenue new $X.X $XXX.X revenue Gross primarily services pricing inter-segment and parts insurance, vehicle basis billion, dealership offset increased [ph] vehicles, after finance segment of revenue. inventory to to million decline decreased a by revenue. hurricanes impacted from increases and

increased revenue increased and increased in Used New average a X.X% revenue parts, same to XX.X%. XX.X%. on revenue service store down in decreased $X,XXX, in a basis. segment. store X.X%; units insurance to as decrease price. motor other motorized XX% Dealership XX.X% vehicle sales decrease increased points The was units and finance same The the profit primarily basis driven same sale, $X,XXX increased dealership part and were decline vehicle and vehicle in selling units motorized X.X% a store Towables per the F&I our vehicle the and inventory. gross and highlights X.X% in a driven same decreased per F&I in percentage of finance X.X% vehicle same X.X% were result X% revenue including A home store sold. to XXX was X.X%, per in decline X.X%; or down by by and revenue sold large insurance in decline other of X.X% sold units revenue a dealership few total motorized X.X% decline store

by XX.X%, after segment decline elimination a and was was Texas increased in to sales Consolidated increased $XXX.X transactions, in strong hurricanes in million. inter-segment and Gross significant $X.X Florida. third Gander the Retail Looking the driven margin year’s to of in XXX points to Gross million $XXX.X SG&A quarter related million, XX.X% selling million. decreased The revenue profit $XXX.X XX.X% very related basis at primarily revenue expenses expenses increase decline the to increased pre-opening SG&A the segment same-store from sales earnings to decreased $X.XX the in $X.X Retail of Net over to and $XX.X operating point $XX.X refer earnings million that the in expenses million diluted year. new opened the XX.X% periods, borrowings. store borrowing diluted, X.X% adjusted we In last units to of by openings. rate. average to floor assume of in locations the Outdoors. wages CWGS, driver higher the closest to driven incremental XX.X% past XX increased increase and tables with previous $X.XX, were additional included where expenses a the basis XX.X% costs associated and anti-dilutive. for were exchanged an fully million common driven expense periods, share release in disclosed were primarily GAAP Please that average earnings Floor per of interest the diluted adjusted EBITDA adjusted earnings for the share per reconciliation increased quarter. Other measures million, share $XXX.X earnings and increased was by adjusted even $XX.X per expense they and the in adjusted EBITDA. plan plan and interest income, from per million respectively LLC share non-GAAP the generator to

In current denominator include of conversion and common earnings the adjusted the that periods, numerator were reference. per CWGS, non-GAAP are yes, where only your our will anti-dilutive for will forward, units common effect and share those LLC., comparative units Going common units prior for amounts dilutive. periods diluted anti-dilutive, provide are in and of we the

increased new sheet. balance from balances were billion and cash XXth, capital September stores or XX.X% million to and million year-over-year, Total Turning acquired inventory $XXX.X $XXX.X $X.X Working opened. to respectively. primarily

XXXX, of $XXX.X New million outstanding Retail secured vehicle of we XX.X% plan in third line back and floor inventory notes $XXX my September the had on the are and was prepared and credit $XX.X term dealership the borrowings over I’d decreased to Facility quarter QX Floor per on the credit. at facility, X.X% Plan basis turn remarks to million At like revolving million under payable total Those Floor $X.XX under a XX, loans of inventory quarter-end. last segment Facility’s from Plan under of senior year. billion the call Marcus.

Marcus Lemonis

closing, In this loyal for customers call over team planning we hard of our to want to our now time, dedication. for thank work look Tom. members the aggressive turn all Q&A At fourth the is We’ll forward Thanks, their guidance company not its revising and the and XXXX. quarter I to a session. very and and

Operator

go first Rick Nelson Instructions] with Stephens. to you. Thank we’ll [Operator And

Rick Nelson

quantify your – and your expectation the could where of early the you, Gander quarter? evening. loss like and added good some to for fourth Thank learnings Outdoors on Gander you RVs, you the for the if quarter stores I’d follow-up

Marcus Lemonis

thanks, So, internally at with things I’m and how we pretty Gander the manage Rick. pleased business. trending are don’t

store than differently Gander Camping Our we stores. is World our manage

In expectations. of may look we boxes and one have our still we primary at RV also have my all different we added dealerships the that operating the as the them my fact, the same. our have four our the is all and to locations. behind consolidated or Gander say of buyers, I them, of Gander in RV names would At XXX all point, met of we them the this quarter, functioning. on have oversights expectations; is They accessories exceeded function management, of but we’ve fact parts In quarter well. five

from clear open one results months. of path quite to to the the we get as these go we’re of to, And couple able that continue opening, any achieve boxes not will people next one said married There doesn’t mentioned I’ve or closed we’re over frankly if month, very fact, the a in third in as profitability We quarter in not – we’re hesitant them Brent the ways few in the lease. and a that were that beginning, balance several a expected of to we pull to monitoring There be should each kind are out closely. year. and through a the to that few Alabama were we of we to plug, that provide others

the think while decisions to work, they’re any made haven’t We want wait and to work. to going try community out. feel yet, But we money your comfortable but they that all I to figure investor if don’t it we going we’re burn not

actually about we it. So, feel really good

Rick Nelson

many and that Gander at locations sense RVs? incorporate to stores will this accommodate operate that RVs how of does stores the make point, And can’t

Marcus Lemonis

really question. great That’s a

store and we’re that presence We kind, expect that just calling we have sales Gander they’re that of traditional construction, XX Gander, contribute that without some at. the that and Any It period in stand-alone RV RV close don’t will overall to four-wall sales the have on an time, them them mean RV to over basis short some can’t under that are we time, dealerships. construction always is business. of of I but under meaningfully a that be we’re will time, something a look over

or term. store unless I growing is or RV be expect people. around growing traffic our or that RVs selling generator big materially file, this we’re leads retailer a that retailer have the idea being store We’re a inside we’re other box whereas not growing profitable, like happens or wouldn’t at to If to long in from don’t feel of differentiates then, servicing married that database, love them, an it RV with our the being it transactions generating we

Rick Nelson

that. Thank you for right. All

to Finally, I’d inventory. ask about like you

lot reducing could quarter – easing You have and you a is the seeing as competitors you in Camping where comment progress? industry at the your progress made discounting you on there any World levels, of inventory inventory of the across hoping – think are

Marcus Lemonis

quarter we have we know information business some I shipments dealers felt felt other little a was what the are. in backlogs six-months our by provided both their the we ago, from Winnebago [ph] we the to their show to but like needed the for will their speak Rive softer. community investment what you the like lot, make can’t that and perspective, when told about I were modifications Forest that’s what on public

went by we the on our a decision maintenance the and through is our which a As we chase evidenced and side, third conscious EBITDA market the quarter, not chase made hole to not down our margins. to of achievement black that

have should of sort you of opportunity us in slowing it market do we Two would happened. orders are we we how at expect more of As an not move. in quarter quarter no us. have but I in We in in February, look fourth things, buying to inventory that XX-months, previously, and did ramp-up fourth both, down be we that Number in consistent that in runway to selling industries inventory expect our go we’ll every our though, significance of of the aggressive to inventory cleanliness the available the and signs the the leader one, orders category. received an need and the I to for to like planned extremely to believe see the January, reclarify XXXX out fourth our be We quarter the we’ve and into we with see coming any however, March. anticipatory

maybe in the markets of a more want markets that some going a have fourth In line We aggressive drawing maintain cases, we grab trying margin, that share in on And the slight bit to national so always still. back. for quarter in that cheaper and to balance the a to sell get with where but profitability for depending it we cases going sand less and segment. regional local more be product and compressed may choose in a to we’re of aggressive to level margins maintaining buy little works us in other markets,

this believe has are afforded there been in this. consistently top-line quarter, will is never aggressive the metrics so to which have fourth more our because be do gain, and the chance quarter. Last us we and expect quarter I would the And a sound solid, in business weakest in but our slightly other that

Rick Nelson

Thanks push the All right. luck we forward. And all for good Great. color. as

Marcus Lemonis

Okay.

Operator

Goldman with Sachs. to We’ll David go Tamberrino next

David Tamberrino

but sales it Good afternoon. it, the to up and in to in an how stores arm of order RV of today get what’s current have progression have missed Gander I might your many to terms XX? quarters

Marcus Lemonis

The five operating licensing them of either have that in phase, we it of by open, the currently balance are construction them the expectation material of opened. is are or phase the June, our May them maybe a a bulk number should

us also them, to time open so on ground materialize much it’s difficult a into doesn’t and around little we end typical up not necessarily the we careful them that As want open more and revenue. we labor of ground year it’s to things Claus up time for Santa bit the be on and that a open it’s skip, too we the the putting inventory

we out one the and so several next so, week Wisconsin And they every months. over roll fact, got in finalized rolling in them out are often, this

David Tamberrino

Okay.

potential we and today what still created opened? or business are the the you as XXXX? see in maturity. of what at that’s for that breakeven risk half Has on we the and that run you’re rate five-stores there that slips Now, thinking been slope think seeing from have just Is that a about, contribution first understanding at your all XXXX changed at the about drag results hitting

Marcus Lemonis

they that those it’s So, for XX XX moment open. we believe the clear, David, have stores to from process we a month very that been

XX hit XX ago, that And would period. stores up months to four ago so to are expect in that of that stages in start I to their stores opened I stride XX months early that. month The the opened would XX that

on believe behind is the not process, our I the we store. a it think a depending depending short conviction so XX process. venture and store-by-store the of that on it’s entire and month a we And And is that to stand process XX market long

as piece, start – throttle we stores cases to and the those we’ll margins, in. see underperforming, were I seen then one open, after earlier and closed are for a we’ve haven’t as meeting seen don’t is and is four, to a doesn’t year seen that the that we reopened to in some what said next months, our exceeding haven’t of mean full them alternative, expectations an that open it five or of feel started could few rebound the which have [indiscernible] yet and few the some forum life like in RV pivot see if pretty make We them months. we been in it we decent But

David Tamberrino

seeing stick a of single membership? any low Outdoors How are wonder or same we the to which talking if months And gotten digits we single Sam of Okay. conversion ago the we that’s couple digits think a to maybe possibly Good in over or in as if on looking topic kind I ? from the into type high be were I Gander a customer digits, metric general. you double what it’s better should at low still conversion – or of

Marcus Lemonis

are manage and think stores the there. those teams get the together both benefits most better around together. more businesses not oddly the the our see metric enough and a the people World stores RV program, stores educated Gander. and as with XX.X% entire we by Camping becomes and in including with more time team, can retail as at customer it, which become club starting $X decision that those we more products So Over really a to and conversion running services as raise club familiar they did drag familiar price the month enjoy of made of to that Gander the We runs October, in it’s

we leap add North in I will – members giant feel XXXX over it. somewhere of believe that’s before about versus a and we trending what really we mean XXX,XXX so And good were

David Tamberrino

was business from quick the looks My Marcus XX.X%. it question, the vehicle of new Okay. about your just review that on RV on the margin is And business like side. financials, my final

think even though anything pulling down I both that’s within out you’re and sequentially that sales? on call to year-over-year back

Marcus Lemonis

look and that impact on sell at our when to expect like dealers was needed the top at negative we total course the a down we that we we into We felt be sure enough, customer steady car line to can’t less have that we competitive and walks or a going to and goes service margin a followed fast as can zero don’t And imagine, that And all harsh, that, some price. I transaction, that the summer. those been she have to in think barrel, as so. we wouldn’t store, if cases F&I and some very turn that and just to competitive landscape you we’re through doing don’t that become a definitely soften it’s what know No, has in the but right. We RV they correction distressed things, able is that make know have a inventory alone going forever. chosen we knew not do we was chase

favorable potential as as more in looked those experienced or the we’ve F&I in – acquisitions. stand-alone a We’re we’ve that we’ve other the for we less margin, the but dealers of that front that transaction, entire a trade margin I took specific little We’ve performance don’t all in, things. kind of far And getting far finance, the we compression of looking pressure on that in at the and seen including profitability end yes, felt pressure well. seen believe far those

with that – were the steady And or that so know it’s think and and avoidance products ability we and for we’re go whether go mean increases any River that know and buyer at a the of just the first for will Thor. tariff back actually a us, a we as to I of the we ready, marketplace that negotiate into able inventory it’s clean a strongly year. Forest very and to are the the of Winnebago minimum slate the we We capable buyer able

well. those enjoying as purchases so And we’re

David Tamberrino

very Thank Okay. you much.

Operator

Craig And we’ll Baird. next go to Kennison with

Craig Kennison

and cost ability variability flex you Good Thank your downturn about to I concerned maybe taking economy, of of of to to some afternoon. for kind? questions. structure, ask lot naturally structure the wanted your are the my wonder, as people a a about cost your to would

Marcus Lemonis

always is, of think not that’s because I rent, that cost model, but labor. variable better really been drags things first have only business is One those that often a a burn keeping is our multi-pronged part all, plan not to of approach.

So that’s one, need our third those the those evidence as ability pull one not our negotiate out the you and is to and quarter if revenue did historically at leases Two, performance, triggers step. look of analysts’ which a but did as that precipitously earnings that’s our that the and but it expectations, a is showed SG&A drops side of revenue that margin earning bigger is equivalently contributor. doesn’t on drop or control stabilization contributor,

performance we’re we cancellable one. exceptions, no exception, we’re advertising they’re move reason contracts, As and without we how but way to service level, look department the a in way structure the plans, field that’s dealership transaction corporate the not the the the whether in cancellable the the a forward, And say from on we that’s it. is side, plan and commission-based we of the level all the are on transaction pay prepared, individual, variable for slowdown, I or always prepared always anticipating that’s at based our

able we’re little a We’re by flex I is not bit. What target. also that mean to labor

other so a the brand aren’t. keep national We’re o’clock, after it store we just ones open have is X and because not we quiet if the don’t to feel need a that

right-sized right-sized brand. to the have like And town a staffing small operation of hours so ability adjust and we labor,

highly ability So, commission variable. plans give and the those to types of stay programs, us

Craig Kennison

the interest on would of frame consumer not demand, on how lower you interest but higher And only expense, way Thanks. of rates kind floor as implications higher secondly, inventory? you against rates, plan your

Marcus Lemonis

plan hits so We expense, operating our interest record as our floor P&L square. an it

our inventory down even was expense was though Our interest higher.

the plan floor expense year. for interest Our

about forecasting given in information fourth to think those we of not rates frankly, As even did prior quarter increases for XXXX, any the we up. quite anticipate and XXXX, our the third being and of

anticipate properly some very be will guidance of thoughtful level We increase. rate in XXXX to our

affect have it less it doesn’t point, it, seen sell but it P&L not a goes X%. we expensive we math. couldn’t just It’s at and we largely of of seen rates And up so straight longer that consumer We not this hit, inventory mean, company million thus far. a not the $XXX have because interest product it, we time. That standpoint, have over seen from affect have it’s period a a

Craig Kennison

math, rate, least, what us rate year-over-year with share on at plan can a basis? to maybe what respect floor what actual that or Regarding you is in is that change with your the

Marcus Lemonis

I’m don’t it’s public know asking, Brent, because information. if I

Brent Moody

Yes, would it’s is, I depends. public and what it say

a metrics for a pricing rate we the grid, have which different factors. depends on on We our have

on, working example, is the is in where Floor Plan the rate the depends under depending on capital business, So where for Facility. the

Marcus Lemonis

Well, me Craig. this, you tell let

have rates very there, think we published way on very requires without say, tighten favorable We is up, very favorable, rate that when to the how much. I can’t back and million money but go have business out too Facility, and Plan it rate oh and very dollars, our we favorable, Floor went up, a sit incriminate definitely about somewhere think the that favorable. But up is us it just we’re going working are there the things, to hard X wanting to we goes find other to

Craig Kennison

where may And trend? finally respect indication retail any to on XXXX, with industry early think you

Marcus Lemonis

made are, into as on feel an alternatives delever from of well speak. are But into to process can’t we openings, infrastructure grow and an inventory to cash the using the market budgeting potentially to we we our other as our bulk our of is, look We’ve year. our talked into industry the expense standpoint at flow excess like every the we’re and investments in leader, what from new calendar the flow position position focused our into for with XXXX positioned earlier. standpoint, secure about cash the and available in stores, and XXXX as now I that deep I speak do I we’re what leader,

Craig Kennison

Great, thank you.

Marcus Lemonis

that see X.XX%. XX-Q, And Craig, is rate of it’s XX plus that LIBOR disclosed as in plan floor the September you’ll our

Craig Kennison

Thank right. That’s you.

Marcus Lemonis

X.XX%, X.X%. not

Craig Kennison

X.XX%. Thank you.

Operator

to next Northcoast Woolf with go We’ll Seth Research.

Seth Woolf

taking for thanks Hey question. guys, my

all we we was clip, Kenosha, store clearly, maybe place, so to took of like RV were far in a have provide when decelerated. running you could RV that. where And what off then, any start guys eight, saw in you that Gander visited XQ? think to clarity explain kind Wondering seen comments the when Going in what it made XQ, retail business, that at I deceleration

Marcus Lemonis

The where of our is in QX decelerate. accelerate back that activity to started participate half marketplace the and in process promotional the to we see willingness

happens that East Coast. thing, things be we isn’t out that suffer with think, out important and there, on hurricane there a and not What shining. could one the about is it’s to bound. there few out bumps an people that but auto that sun I didn’t for for business is it, both additionally, came-in moratorium, our it is, and transactions it’s we there’s talk in, It’s business, the if and it’s where the a understand, come will huge didn’t did the the set insurance of be

very what’s to has side replacement market-by-market, inventory got And days. about to hearing because the five But and environment about to about the what part real. and game we’re did an think of couple what it, I for we’re was just large selling it good of it when basis, half something to we the that is ramp are I in to promotional start said bit competing be margin a it for just but on talk QX and have hearing from our X%, X%, more of store-by-store into increases. back to not We activity replacing really other what margin that that the the we to all where going as and for. tariffs get suffered hesitate want fresh get We a not say, we than a on cost other we the we did slim go, what and dealers’ actually before not, focused adjustment remove toe water So elected about always inventory came into that I’ve of X% elected sold these X%, for up. talk for we I little to we and saw

when so, it threshold that had and true just low strong we about with process know we filter Roger said particular on were And a And pass. time, there margin in is that, transactions moments are I that. very very

going not the We’re not to market. to buy do going that, we’re

need to for right be use game. to future prepared get inventory and the we not Our to the play

Seth Woolf

for that. you thank Okay,

October, Just in have if real your you quick, what about seen – what if environment continued? that

Marcus Lemonis

I think promotional still activity is the pretty in robust the marketplace.

I if a and because of in got aggressive anyway. movement – surprised not we -as inventory maintaining aggressive buys, more dealing but are as lot revenue as clean of making November some really we’re our we’re a we if and and December with lot philosophy, we, be have We wouldn’t

market going And try to what position the everybody some so show market. make we reminding a our into is season, may create the and January in momentum

Seth Woolf

Okay. helps. That

some the through in see to buying XQ… later shows of power start get You

Marcus Lemonis

you that. is don’t XX-months volume, full think you’ve our XX power think full for weight fourth because quarter I know historically of that our buying that transaction the you’ll or softest of benefit – years. Seth, coming most I I the unfortunately, quarter seen in the get

You I get obviously that that a get where can have weight that the certain know but to to segments Roger we our void that, full of manufacturer and market execute categories in of business, I we know aggressive more some, think there support if you I in be is have decided but and the and don’t that it.

Seth Woolf

it’s out like for if your sounds know are you maybe we’ve some I I a you what ones. discounts there power higher giving But of work if that costs. maybe, are talk on at they would are lot of some suggest magnitude, advantage pay second, kind about Okay. it very just OEMs maybe have of the guess even because that I, smaller the guys a smaller could to of still some of robust dealers done product a buying order sitting

of So heard I’m pretty significant. discounts are like the we’ve just curious some

in of So being do the have, largest guys what advantage retailer market? the you kind

Marcus Lemonis

first And we us discounts, a and entire pool. that they’ve inventory right the team the some the asset a last that manages and In it cases, not I an is art. science, not a together aren’t And they art. five an science, foremost, years, put does core think, to has over the of Roger What but X% it we necessarily is science, the of is year. do sure, to not appropriate developed the don’t don’t has necessarily status notion tell time the marketplace. the having product may carry true, of it it’s we be something just sells still. product everything but the because or but is is to maximum brand or want plan a buy it buy right tables indicators are be manufacturers I’m to key This what in business. beneficial want not kind key is key discount on of certain on that achieve illusion it want I a the products RV metrics price the is that for discount, or at believe any that are floor to big true and offering may or and sort obsolete true a do X% that

product work. acknowledging to we’re right the we leverage but use we of We blood we tried I time. it the inventory moment, have want And and the a in right that best anticipated I brought that then no orders to at and is Roger so what on do that to in the getting forward. bit it, would best no deal also in our deal, in the our And little fall XXXX, XXXX want get be ensure problem period, didn’t think, there we want to we the of

We see not. indication ability will we Well, today but we to unless again is our to delay. never plan do to believe fine. Getting dealers other that some normal the we have where back do do

they the lot now that, have clear what’s a what It’s little but in. bit Let’s January, for and, inventory for – that’s to you to buy the we’re We today. these today, orders, February, not right just now? in November, April with, what buying December, interested orders that like if are to giving give we’re talk of getting, this its March, I about the yard, not I what continue have you look inventory am backlog

I and candidly buy or was We We for would and for it tough agree, this, the very next believe plan to that We believe season five have us. Roger months learnings this and the advance. we it position think well in a lot while XXXX. us selling we year for learned probably four

Seth Woolf

reconcile guidance, you just the that’s of comments. question last the me and reaffirmed for couple Excellent, I just Okay. obviously is, positive guess guys so me I’m help you hoping could

positive there seen you think be big few to it’s is distressed profit are buying there out and appropriate selling every the did to on going the it, reaffirming XQ said get when promotional it’s confidence post I so thing a you it’s quarter trend was the have the I a at going I they making some for some what very but you very is point, guide guys beneficial that the say, you take have any products last dealers is, So back step do? not that power if gives there been has you these quarters, not inventory, to that

Marcus Lemonis

could that what I’m – several trend you’re the over referring is last the quarters trends sorry, Seth, you to, ? that sorry, I’m

Seth Woolf

have coming comps been been decelerating, mean down. I Well, have GPUs

operating the the reaffirm of in in in but the margins guidance? a I environment like there’s it curious I’m seen seemingly and what Just lot deteriorate, confidence back to noise just you’ve there, general, the gives know continues you

Marcus Lemonis

isn’t days. continue to our incident speak seen today other what the have manufacturers and fourth of to said as run extent I adjusted. and have, and the have I information is XX their the marketplace, evidenced should we been needle what other unfortunately don’t by XX, quarter are the front not even before, manufacturers, products the presentation of want specifically did I is, other that are doing of I that specific through have slightly Look, has but years me quarters, of it’s think reported, our them but lead and some supply results we our at that we’ve that of in terms the ready our and I’ve at in same work a be I is in exists. but what three versus I and we’ll with point the believe But to in the and been under a dealers that not I of move huge it first the for the how that had by I to in position minutes times it whether out pricing any couple that guidance remind to able that few feel would we’ll cleanliness a or think speak decisions inventory in we’re dealers decided the pricing through couple certain the last of wrong just segments rate. than can’t don’t manufacturers. and some I’ve at the that it everybody more for inventory – disproportionate I just look the and me November our to we in to largely, collaboration two yes. much look like buy feel for less previous I by I promotional reengage of of to as us, been us right at I’ve the and business and to digitally and we part activity do And of weeks like our XX inventory with Roger made on manufacturers be ago, all top we’re know collaboration everybody

Seth Woolf

Okay. Thank you.

Operator

We’ll Brinkman Morgan. to JP with Ryan go next

Unidentified Analyst

our Brinkman. Ryan for Daniel for is Thanks question. this Hi, taking

I’ve good costs order of sized tariffs price manufacturers such steel as pretty in about wage and to by Thor aluminum So because inflation. to increases hearing due increased been along pass and

think inflation I is the because strong. economy wage is that, still

in think maybe impact consumer because model economy. prices cope he year Thank to the increased you of you new on on one walking vehicles with be the the So stronger do versus about the ability door hand increased you. question the of is, my the impact feeling of the your cost selling how of through is demand

Marcus Lemonis

that as most backlog. fine place to early whether more to opportunity tariffs related of the positioned and putting are around a inventory manufacturers early looks getting the and fall as that’s part related because summer a in down of of a and I function enhance driving about the conversations inventory cross in can erosion intelligent discussion and through they and good our largely company orders a the to materials but see certain increased they create price in what need the inappropriate margins at is labor job have increases intelligent they our with And to or line and avoid them there’s on price they’re the schedule can schedule for and one the coming when of to the think manufacturers do part part of things these LIBOR to done whether total appropriately that order it to line the manufacturers think really know have it I of summer avoiding marketplace their properly. exactly about us they have through have so the to costs, in the we when an understanding don’t it, fine making Yes, get really tariffs, sure they the well

relationship, using leverage and is industry bit to I an inventory get little on sort orders sell-through them give building out Proper was a at hurt from have think of backed side. it it us I price not up our what discussions. our having to control the started a spun not to of exceeding advance that speculative discount the planning, rate what and is potentially and believe the manufactured as avoided increase got us

today maybe walk think it say financing customer those XXX the and having not as that months. XXX, the this XXX buying a set no, $XX,XXX it’s not just as through front We’re in obstinate because with over saying door, the being even is I customer months, manufacturers is lastly unit we’re our

small so, and all us I be don’t And that them, going consumers. the to to with but isn’t going think pass increase prices up we’re gives to just assume a that deal-breaker a a for pump just along license the

balance as that that XXXX are to the that we is understand ensure And market strategy understand customers ensure thread forward maintain needle position. so to the and our where we and we is in we our XXXX where going of

Unidentified Analyst

color. for Great. the so you much Thank

Operator

go We’ll Fargo next to Wells Tim Securities. Conder with

Unidentified Analyst

Tarantino Tim. actually Mark [ph] in is for this Hey,

Just questions us. a few from

and for to discounting support across any the back Going seeing level support industry more you to Are incentivize for ordering? return OEM dealers.

Marcus Lemonis

with would not a the even not something or that clearly open with ever the asked only for VIN familiar all not and want so because anything for with that accounting that’s in discounts I’m it our regard. be the number managing but I’m We associated transaction, specific familiar we not, keep to customer purposes, for to to. way

Unidentified Analyst

the seeing the being asked? pipeline continued potential valuations with are I guess, in Okay. market, volatility or in And of any, then acquisitions you increase

Marcus Lemonis

in and to capital. now, strategic not it’s what other strategic very smart mean Brent group the think even use seen, we little and execute flow, initiatives, investments to told about as a made want XXXX, that’s constantly have with made this I, are were or bit that things. excess higher. what working opening we made on see we’ve acquisitions some the consistent for and we’ve scale a transactions and on and permitted announce continuing our XXXX I we I probably about way really cash the other acquisitions and is to That the we’ve we aggressive this in continue leverage of working. maybe investments our deal accretive then our size date goal to to in Right there CapEx, we’ve call, business. It to flow those investments to on that very We our be add our we Roger, infrastructure our the of some excess is cash are will and but flow inventory, in use

Unidentified Analyst

you very thank much. Okay,

Operator

We’ll with to Capital Andress KeyBanc Brett go Markets. next

Brett Andress

a guidance does guidance asking the question fourth Maybe sales afternoon. reiterated quarter. a imply year-over-year inflection different in Good that you way big the pretty

X% inflection. the increase bigger I we understand I think what it, is expecting RV you unclear, so accelerate are expected Is did gives confidence like puts a fourth I trying in the this into maybe the contributor I a than that XX% to takes you guess quarter? guess, little was Gander – quarter you just a about the to something just and

Marcus Lemonis

thank Yes, for you asking. so –

year remember that businesses the in we the part the things are expecting our to or RV we not have of the quarter side many as the did that’s this year. fourth But last fourth of revenue increase have stream of goal. So that slightly we in maintain quarter

Dan’s, we Rock have Creek, have Gander we Outdoors. House, The the Uncle and have have We we

contribute that quarter, their is the And in segments a so that business is there year. first nicely other because time

million that to things. the of attributable $XXX the just you side So speak of isn’t RV

Brett Andress

it. Got

you Did Okay. kind led And box you the on that closed region about closing I’m ultimately Gander then of decision. market you get to that for guess what in just favorable. Alabama. back to September I was guess, learned from ask Outdoors what in not postmortem I wanted a in maybe that the I that looking the least store? wrong

Marcus Lemonis

lease the are lease. in we favorable, was very that of fact, out Because

signage we And of have no have all we in a more property. up our that our and inventory, picked Alabama, move all that we actually We all so and dealership. a assets, location of obligations of our fixed to where to

up, like don’t looks got a fashion promoted up, we in picked, any a for of we for foot have amount like blame take I dollar I of with World location, do of looked think burn finite every feel those the like way. locations the and it I even that or path any we want did manage, and day. if four, interested look location at five more I and after the not that I that other was and location, that the we take of months location, Alabama, artificially satisfied dealership wasn’t But clear to something we’re I resources, segment. have that, path daily deploy it monitored and business finite a in the not another it path, capital, the Florence. to doesn’t also am moving – single that particular a prop things, closely a a them I it in I intelligent Florence amount to all I that that we’ll Camping another in monitoring resources way case, reviewing doing similar reports, had traffic profitability,

month payment going a $XX,XXX it any work to the got conclusive hurdle lease. I of rent don’t was, shutting those be want We opposed anybody of cases, we’ll I’m down. right. to part But be decisions In The but able most – a down that store leases, think any them. a into is haven’t made to we of yet, out to not for

our cash didn’t we And inventory, it work didn’t work we and it on. know, so if you get we take move – our and back

one I So it pick location my back I just it it’s picked is fault. I would that XXX, is fault. was to went my I – wrong,

Brett Andress

list, tell us many you ago. are six how it can five of a watch now? those maybe think And Understood. few your I or was stores on months

update Just many any on how you’re monitoring?

Marcus Lemonis

it hesitate called close to and can those what there’s them Gander not will doesn’t. I’m proven that including, matter they And always of doesn’t, always XXX be the – get we And that. it they’re always and and have about locations of what our we’re we a watching way, out historically that we’ve I And right? monitoring may There’s called and Well, [indiscernible] we locations. all things. the do think different is, doesn’t always them, really

So idea I we’re stuck in anything, don’t want in anybody not stuck. stuck no it’s thinking we’re that anything,

Brett Andress

All right. Thank you.

Operator

Markets. Johnson Gerrick Capital to next go BMO with we’ll And

Gerrick Johnson

you. Thank

that when methodology using anti-dilutive? or were EPS. change and apply prior prior because you periods been calculating there of it shares the Does may periods, Tom, have new So, you’re in overstated EPS

Tom Wolfe

and bottom at schedules. denominator derive data numerator periods prior can you by the the using in anti-dilutive the the of the No, the

Gerrick Johnson

dollar then down And same-store that? sales, X.X% Okay. units. in a give you for amount on Can

Tom Wolfe

units? amount The the dollar in

Marcus Lemonis

The dollar with that? amount associated

Gerrick Johnson

sales down in same-store were What dollars?

Marcus Lemonis

much? How

Tom Wolfe

New down vehicles million. $X.X

Marcus Lemonis

He dollar wants $X.X amount. the million

Brent Moody

X%.

Marcus Lemonis

wants He the amount. dollar

Tom Wolfe

other unit $XX are sales same-store, its down about revenue was million. in If

Marcus Lemonis

that mobilized. open number with is we’ve bulk bet the feeling segment. that exact And And of inception I Group the candid our I the very been about the since that, about would have particular and don’t

Gerrick Johnson

Okay.

So X.X% units. same-store down sales in

in I that there. dollars? heard a – Is think, about back talk to number were you I If that X%

Tom Wolfe

No, $XX million.

Marcus Lemonis

X.X%. about million, $XX

Gerrick Johnson

you. X.X%. Great, thank

Operator

Chartier next Hardt. & we’ll Monness, And Jim with go Crespi to

Jim Chartier

was some confident wondering, generated, traffic return Marcus, me leaped quarter marketing that as a investment pull positive afternoon. that in decisions to just business to question. And Thanks. kind due saw sales Good you that on of the for of strength turn inventory. know makes quarter? more kind sales confidence back of the on such the the gives in give more the you can in us some that can you was taking indications give fourth Thanks kind you third of – metrics your those continued decline my you I or you if in

Marcus Lemonis

Yes.

consumers traffic highs all-time an we inquiries from at at high. and saw the record so was Our web

and that natural stores. shop, flat the customers of foot some how saw essentially is evolution traffic Now of we our in

see into we and deal. What so And is, would give did consumers we more though didn’t that for consumer’s the get they’re lifestyle to that diminished. the anything are us appetite a educated far indication looking see

sort far us so be we’ll this, transactions digital, didn’t the have we price, can against that by had of scientific figured any concern that I’m not leave. believe that we seeing market, standpoint, more From and of that do it we scientific gives more in believe marketing the by-segment, by a with But discerning we we kept way be they more quarter, And and digitally type over more very to anything far competitors that. aggressive in that fourth a out.

of In had we look investment, line, at and the money achieve able us, for short. forecast I that the even bottom on I feel fell analysts the EBITDA though I we at return look as terms spent, like that were the to it

bit market the overspent. and is may what more, And so remind I quarter. spent the doing little in I people a quarter. just So wish, our to want we end up like in I fourth feel in Candidly, would’ve fourth I don’t the position we

Jim Chartier

Thanks. Great.

Operator

Woolf Research. Northcoast a with And from Seth we have follow-up

Seth Woolf

Hi guys.

kind of occurred the something Just listening me. call, to to

a margin, how the business. comps, you’re got lower big drag disciplined were I at guys the look that product. So, progressed, with on quarter But the as when motor more you pretty homes pricing

the with you’ve got So the discipline late and favorable quarter in the shift. mix

Just the on? was how activity intense promotional early

Marcus Lemonis

the Seth, question. don’t apologize. understand sorry, I I’m I

Seth Woolf

mix Well, I shift seemingly a quite saying GPUs mean toward bit, from benefit like down – were and a had towable. a gross positive you – are you

quarter? just solely environment So the earlier that this promotional

Marcus Lemonis

the question? your Yes, that all or Is mean, I promotional environment overall?

Seth Woolf

but the guess overall, your response I to Well, that? is

Marcus Lemonis

look so mean, as as I said transaction. gross the times, we at I entire many Yes, profit a

we the for make markets gross seven and company, as deals gets whole, by we’re purposes, store may the the for looking your break full the we $X,XXX on, approved For because we profit manager transaction have back-end. out a a lose that it but it’s purposes, transaction at $X,XXX disclosure. When we our unit on a that’s $X,XXX And of for the trade-in. that

the basis have those the transactions, day-to-day increased to are manager-by-manager at you managed, that so transactions basis. nothing of are make directive sure with the and is in store-by-store and pay footprint our number where imagine, increase some are and There a people only $X,XXX as membership, Sam And we a Good in a of and number would to made front-end basis, their profitable. be on walk cash transactions on – the and increase And back. the transactions cases

it I quarter so whole in throughout anything promotional speak would we market we felt think we don’t think the can’t just, were And I don’t activity whether changed to anything – were I and the throughout it’s say I’m changed I was less heavy or place quarter, that the sorry. promotional, under the quarter like more

Seth Woolf

up. that clearing for Thanks right. All Okay.

Operator

hand the At this I any would for over back like Mr. remarks. Lemonis or call closing time, to additional to

Marcus Lemonis

your to World. and speaking Camping support with Thanks. guys for you for continued interest soon. you We Thank forward look

Operator

participation. conference. today’s you We for does thank That conclude your