Q1 2024 Camping World Holdings Inc Earnings Call

May 2, 2024

Operator: Ladies and gentlemen, good morning and welcome to the Camping World Holdings conference call to discuss financial results for the first quarter of fiscal year 2024. 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.

Ladies and gentlemen, good morning, and welcome to the camping World Holdings Conference call to discuss the financial results for the first quarter of fiscal year 'twenty 'twenty four.

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.

Operator: Please be advised that this call is being recorded, and the reproduction of this call in whole or in part is not permitted without written authorization from the company. Joining us on the call today are Marcus Lemonis, Chairman and Chief Executive Officer. Brent Moody, President, Karin Bell, Chief Financial Officer, Matthew Wagner, Chief Operating Officer, Lindsey Christen, Chief Administrative and Legal Officer, Tom Kern, Chief Accounting Officer, and Brett Andres, Senior Vice President, Investor Relations. I will now turn the call over to Ms. Christen to get us started. Please go ahead.

Please be advised that this call is being recorded.

The reproduction of this call in whole or in part is not permitted without written authorization from the company.

Joining on the call today are Marcus <unk>, Chairman and Chief Executive Officer.

Unknown Executive: Brent Moody President.

Bell Chief Financial Officer.

Unknown Executive: What's your Wagner Chief operating officer.

Unknown Executive: Lindsay Christian Chief administrative and legal officer.

Unknown Executive: Tom's Gooden, Chief Accounting officer.

Unknown Executive: Bret Congress senior Vice President Investor Relations.

Lindsey Christen: I've allowed turn the call over to MS. Christian to get US started please go ahead.

Lindsey Christen: Thank you, and good morning, everyone. A press release covering the company's first quarter 2024 financial results was issued yesterday afternoon, and a copy of that press release can be found in the Investor Relations section on the company's website. Management's remarks on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These remarks may include statements regarding our business plans and goals, industry and customer trends, and inventory expectations.

Lindsey Christen: Thank you and good morning, everyone. A press release covering the company's first quarter 'twenty 'twenty four financial results was issued yesterday afternoon, and a copy of that press release can be found in the Investor Relations section on the company's website manner.

Lindsey Christen: The Expected Impact of Inflation, Interest Rates and Market Conditions, Acquisitions, Pipelines and Plans, Future Dividend Payments and Capital Allocation, and Anticipated Financial Performance. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section of our Form 10-K, our Form 10-Qs, and other reports on file with the SEC. Any forward-looking statements represent our views only as of today, and we undertake no obligation to update them.

Christian: Management's remarks on this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Lindsey Christen: These remarks may include statements regarding our business plans and goals industry and customer trends inventory expectations.

Lindsey Christen: The expected impact of inflation interest rates and market conditions.

Lindsey Christen: Acquisition pipelines and plans.

Lindsey Christen: Future dividend payments and capital allocation and anticipated financial performance.

Lindsey Christen: Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section in our Form 10-K, our form 10, Qs and other reports on file with the SEC.

Lindsey Christen: Any forward looking statements represent our views only as of today and we undertake no obligation to update them.

Lindsey Christen: Please also note that we will be referring to certain non-GAAP financial measures on today's call, such as EBITDA, adjusted EBITDA, and adjusted earnings per share diluted, which we believe may be important to investors to assess our operating performance. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial statements are included in our earnings release and on our website. All comparisons of our 2024 first quarter results are made against the 2023 first quarter, unless otherwise noted. I'll now turn the call over to Marcus.

Lindsey Christen: Please also note that we will be referring to certain non-GAAP financial measures on today's call such as EBITDA adjusted EBITDA.

Lindsey Christen: And adjusted earnings per share diluted which we believe may be important to investors to assess our operating performance.

Lindsey Christen: Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial statements.

Lindsey Christen: <unk> in our earnings release and on our website.

Lindsey Christen: All comparisons of our 'twenty 'twenty four first quarter results are made against the 2023 first quarter unless otherwise noted I'll now turn the call over to Markus Thanks, Lindsay and good morning, and welcome to our 2024 first quarter call on.

Marcus A. Lemonis: Thanks, Lindsey. Good morning, and welcome to our 2024 first quarter call. On today's call, the team will cover both the operational and financial highlights of the quarter while providing comments on the exciting future ahead. As we entered the quarter, we had very specific targets to execute on, gaining market share on new products while improving year-over-year margin. The recalibration of our used inventory levels, driven by the unparalleled reduction of new prices, opened up 14 new locations and eliminated non-performing assets.

Markus: On today's call the team will cover both the operational and financial highlights of the quarter, while providing comments on the exciting future ahead.

Markus: As we entered the quarter, we had very specific targets to execute on gain.

Markus: Gaining market share on new while improving year over year margins. The recalibration of our used inventory levels driven by the unparalleled reduction of new pricing open up 14, new locations and eliminate nonperforming assets.

Marcus A. Lemonis: The double-digit same-store sales momentum and market share growth during both the first quarter and the second quarter to date proves our thesis around demand and its interdependency on lower price units, essentially affordability. We continue to feel strongly about driving our efforts towards the intersection of strong demand and affordability. We expect the average selling price of new units in our company to be at or below $38,000 and could see flexibility increase slightly once interest rates retreat in 2025. Consumers ultimately build their monthly financial models around monthly payments.

Markus: The double digit same store sales momentum and market share growth during both the first quarter and the second quarter to date for proves our thesis around demand and its inter dependency on lower price units essentially affordability.

Markus: We continue to feel strongly about driving our efforts towards the intersection of strong demand and affordability. We expect the average selling price of new units in our company to be at or below $38000 and could see flexibility up slightly once interest rates retreat in <unk>.

Markus: 25 <unk>.

Markus: <unk> ultimately build their monthly financial models around monthly payments. So in addition to change in mix and average selling price. We continue to be successful in working with retail lending partners in a higher rate environment to provide intelligent and thoughtful solutions around financing.

Marcus A. Lemonis: So, in addition to the change in mix and average selling price, we continue to be successful in working with retail lending partners in a higher rate environment to provide intelligent and thoughtful solutions around finance. This strategy has led to delivering another successful quarter, both in finance income and product penetration, which ultimately enhances total gross profit per unit. In working to achieve our 2024 earnings growth, we identified the need to continue to eliminate underperforming or non-core assets. Through the quarter, we sold one RV dealership location and signed a definitive agreement to sell our furniture manufacturing business.

Markus: This strategy has led to delivering another successful quarter, both in finance income and product penetration, which ultimately enhances the total gross profit per unit.

Markus: And working to achieve our 2020 for earnings growth, we identified the need to continue to eliminate underperforming or noncore assets through the quarter. We have sold one RV dealership locations and signed a definitive agreement to sell our furniture manufacturing business. These moves are not only unleashing a lot.

Marcus A. Lemonis: These moves are not only unleashing locked up capital but have evolved, in one case, into a holistic strategic partnership that we believe will provide material sales and margin improvement in our parts and aftermarket. The sale and entrance into a new parts and aftermarket supplier agreement will positively impact our financial results going forward. In addition, our earnings growth goals have required us to make tough cuts in SG&A in the last six months.

Markus: Up capital, but it has evolved in one case enjoy holistic strategic partnership that we believe will provide material sales and margin improvement in our parts and aftermarket business.

Markus: Sale and entrance into a new parts and aftermarket supplier agreement will positively impact our financial results going forward.

Markus: In addition to the above our earnings growth goals have required us to make tough cuts around SG&A in the last six months our target on SG&A as a percentage of gross has and always will be rooted in the low 70% range.

Marcus A. Lemonis: Our target on SG&A as a percentage of growth has and always will be rooted in the low 70% range. We believe that we have made the cuts that allow us to return to that level once gross profit sequentially returns to normal. As we unpacked the quarter on SG&A, only our January and February results were outside of our standards, but this was exclusively driven by the temporary compression on RV margins caused by our rigorous inventory management plan.

Markus: We believe that we have made the cuts that allow us to return to that level. Once gross profit sequentially returns to normal levels as we unpack the quarter on SG&A only our January and February results were outside of our standards, but it was exclusively driven by the temporary compression on RV margin.

Markus: It's caused by a rigorous inventory management plan.

Marcus A. Lemonis: March started to return to a more acceptable range, and we expect that to improve in Q2, and then seasonally, and sequentially improve as margins normalize. As a reminder, our business is largely built around the installed base of our vehicles, as evidenced by our continued solid performance in GoodSAM and our parts and service business. Those categories provide unparalleled stability and predictability unmatched by anyone else.

Markus: March started to return to a more acceptable range and we expect that to improve in Q2, and then seasonally sequentially improve as margins normalize.

Markus: As a reminder, our business is largely built around the installed base of RV Ers and that is evidenced by our continued solid performance and good Sam and our parts and service business those categories provide unparalleled stability and predictability unmatched by anyone else as one would expect.

Marcus A. Lemonis: As one would expect, our management team has the responsibility of always looking at ways to improve and unlock value in the company. We've been working with Goldman Sachs to explore alternatives as it relates to our good Sam business, which was coming off a record year in 2023. Through that process, we have been pleased by the number of interested parties who see the strength of the brand and the opportunity and the value associated with it.

Markus: Our management team has the responsibility of always looking at ways to improve and unlock value in the company.

Markus: We've been working with Goldman Sachs to explore alternatives as it relates to our good Sam business, which was coming off a record year in 2023.

Markus: Through that process, we have been pleased by the number of interested parties, who see the strength of the brand and the opportunity and the value associated with it.

Marcus A. Lemonis: Our team has continued to discuss this internally, and we believe that our ability to grow this business by allowing our Good Sam team the flexibility to expand into larger recreational vehicles, not just RVs, would not only yield enhanced earnings, but would allow us to widen our prospect audience from the boating and power sports categories while we continue to explore alternatives. As we continue through the balance of the year, our focus is simple: continue to see material sales and profit improvement at our existing 211 RV dealership location.

Markus: Our team has continued to discuss this internally and we believe that our ability to grow this business by allowing our good Sam team the flexibility to expand into the larger recreational space not just our vs would not only yield enhanced earnings but would allow us to widen our spot.

Markus: Prospect audience from the boating and power sports categories, while we continue to explore alternatives as.

Markus: As we continue through the balance of the year, our focus is simple.

Markus: To see material sales and profit improvement in our existing 211 RV dealership locations.

Marcus A. Lemonis: Find ways to continue our new market share expansion, expanding our marketing, our market-making ability on usage, which Matt will discuss further, and return to our internal expectations on SG&A while maintaining the same opportunistic approach to acquisitions as we drive towards our goal of 320 locations by 2028. I'd like to turn the call over to Matt Wagner to discuss operations.

Markus: Find ways to continue our new market share expansion, expanding our marketing our market, making ability unused which Matt will discuss further and return to our internal expectations on SG&A, while maintaining the same opportunistic approach to acquisitions as we drive towards our goal of three <unk>.

Markus: Hundred and 20 locations by 2028.

Markus: I'd like to turn the call over to Matt Wagner to discuss the operations. Thank you Marcus.

Matthew D. Wagner: As mentioned, we are experiencing meaningful new unit sales growth to start the year, with same-store new units increasing 16% and momentum continuing through April. Our new unit trends are significantly outpacing the broader industry. Resulting in material market share gains in both January and February based on the most recently reported stat survey information. We attribute this performance to our intentional and disciplined inventory management, supporting our previously stated thesis that lower-priced RVs are a highly elastic good.

Matthew D. Wagner: As mentioned, we are experiencing meaningful new unit sales growth to start the year with same store new units, increasing 16% and momentum continuing through April.

Matthew D. Wagner: Our new unit trends are significantly outpacing the broader industry, resulting in material market share gains in both January and February based on the most recently reported that survey information.

Matthew D. Wagner: We attribute this performance to our intentional and disciplined inventory management supporting our previously stated thesis that lower priced rvs are highly elastic good.

Matthew D. Wagner: Today, we are sitting with less than 3,800 Malta Year 2023s, continuing to significantly outpace the industry with almost 90% of our new inventory and current Malta Year 2024s. We sold nearly 16,900 new units in the first quarter, an increase of over 20%. As we move throughout the year, we anticipate that new average selling prices will hover around the $38,000 range.

Matthew D. Wagner: Today, we are sitting with less than 3800, multi year 2023s, continuing to significantly outpace the industry with almost 90% of our new inventory and current multi year 'twenty 'twenty fours.

Matthew D. Wagner: We sold nearly 16900 new units in the first quarter, an increase of over 20%.

Matthew D. Wagner: As we move throughout the year, we anticipate that new average selling prices will hover around the $38000 range.

Matthew D. Wagner: Against this backdrop, we maintained a regimented approach to procuring used inventory, having purchased 60% fewer used vehicles through the first four months of this year. As we sit here today, we have 35% fewer used vehicles in inventory compared to last year. We largely did this because the used RV market lacks the infrastructure and institutional participation needed to create an efficient market.

Matthew D. Wagner: Against this backdrop, we maintained a regimented approach to procuring used inventory, having purchased 60% less use through the first four months of this year as we sit here today, we have 35% you were using inventory compared to last year.

Matthew D. Wagner: We largely did this because he used RV market lacks the infrastructure and institutional participation needed to create an efficient market. We responded to this need and we launched CW auctions in December.

Matthew D. Wagner: We responded to this, and we launched CW Auctions in December. We witnessed immediate interest from consumers, wholesalers, banks, and manufacturers alike. Over the course of the last five auctions, we amassed over 2.2 million unique views and hundreds of unit sales during the soft launch period.

Matthew D. Wagner: We witnessed immediate interest from consumers wholesalers banks and manufacturers alike over the course of the last five auctions, we amassed over $2 2 million unique views and hundreds of unit sales during the soft launch period.

Thomas E. Kirn: As this business matures over the coming quarters, we see this serving as a profitable, cost-effective remarketing channel that has never existed in this industry at scale, allowing for greater used procurement flexibility while improving the velocity of our sales. We continue to expect our used volumes to improve over time as appropriately valued inventory is intelligently brought back into the system. We expect our used margins to improve sequentially starting in the second quarter and to normalize to historical levels by the fourth quarter.

Matthew D. Wagner: As this business matures over the coming quarters, we see this serving as a profitable cost effective remarketing channel that has never existed in this industry at scale, allowing for greater use procurement flexibility, while improving the velocity of ourselves.

Matthew D. Wagner: We continue to expect our used volumes to improve over time as appropriately valued inventory is intelligently brought back into the system.

Matthew D. Wagner: We expect our used margins to improve sequentially, starting the second quarter and to normalize to historical levels by the fourth quarter.

Thomas E. Kirn: As part of our growth plan for 2024, we will continue to focus on expanding upon the tremendous progress that we have made with Good Sam, Service, our used RV business, all while focusing on market share growth of new RVs and continuing to add accretive acquisitions to our dealer network. We opened 13 net dealership locations in the first quarter, five of which were manufacturer-exclusive locations, and we plan to continue to remain acquisitive with the goal of growing our store count to 320 stores by the end of 2028. I'll now turn the call over to Tom Kern to discuss our financial results.

Matthew D. Wagner: As part of our growth plan for 2024, we will continue to focus on expanding upon the tremendous progress that we've made with good Sam service, our used RV business, all while focusing on market share growth of new arby's and continuing to add accretive acquisitions through our dealer network.

Matthew D. Wagner: We opened 13 net dealership locations in the first quarter five of which were manufacturer exclusive locations and we plan to continue to remain acquisitive with a goal of growing our store count to 320 stores by the end of 2028, I'll now turn the call over to Tom Curran to discuss our financial results.

Thomas E. Kirn: Thanks, Matt. For the first quarter, we recorded revenue of $1.4 billion, a decline of roughly 8% from last year, driven primarily by used unit volume, while new vehicle revenue of $656 million marked the first year-over-year increase in six quarters. Our GoodSAM Services and Plans segment continued to post record quarterly gross profit of $30.5 million. Within our product services and other revenues, our core service revenues showed continued growth, while product sales declined primarily due to lapping our active sports restructuring from last year and lower retail attachment due to fewer used vehicles being sold.

Tom Curran: Thanks, Matt for the first quarter, we recorded revenue of $1 4 billion a decline of roughly 8% from last year, driven primarily by used unit volume on new vehicle revenue was $656 million Mark the first year over year increase in six quarters, our good Sam services and plans segment continued.

Matthew D. Wagner: To post record quarterly gross profit of $30 5 million within our products services and other revenues. Our core service revenues showed continued growth while product sales declined primarily due to lapping our active sports restructuring from last year and lower retail attachment did fewer used vehicles being sold.

Thomas E. Kirn: Our adjusted EBITDA for the first quarter was $8.2 million, with the primary drivers of the year-over-year decline stemming from used vehicle gross profit pressure, about 10 to 20 million of which was related to rebalancing aged used inventory, as Matt mentioned. We also incurred a couple of additional expenses worth highlighting, including new store and auction startup costs, as well as professional fees that represented approximately $7 million of impact to the quarter. As we remain focused on extracting additional value from certain non-core and underperforming assets and returning cash to our business.

Matthew D. Wagner: Our adjusted EBITDA for the first quarter was $8 $2 million with the primary drivers of the year over year decline stemming from used vehicle gross profit pressure.

Matthew D. Wagner: About $10 million to $20 million of which was related to rebalancing aged used inventory as Matt mentioned, we also incurred a couple of additional expenses worth highlighting including new store in auction startup costs as well as professional fees. They represented approximately $7 million of impact to the quarter.

Matthew D. Wagner: As we remain full.

Matthew D. Wagner: On extracting additional value from certain noncore and underperforming assets and returning cash to our business on the balance sheet. We ended the quarter with about $177 million of cash, including $148 million of cash in the floor plan offset account.

Thomas E. Kirn: On the balance sheet, we ended the quarter with about $177 million of cash, including $148 million of cash in the floor plan offset account. We also have about $220 million of used inventory, net of flooring, and roughly $219 million of parts inventory. Finally, we own about $116 million of real estate without an associated mortgage. Thanks.

Matthew D. Wagner: We also have about $220 million of used inventory net of flooring and roughly $219 million of parts inventory.

Matthew D. Wagner: Only we own about $116 million of real estate without an associated mortgage market.

Marcus A. Lemonis: Thanks, Tom. Our strategy and execution is keeping us well ahead of our competitors, and the trend lines are clear. We expect 2024 to be a much better year. I'd like to turn the call over now to the operator for Q&A.

Speaker Change: Thanks, Tom our strategy and execution is keeping us well ahead of our competitors and the trend lines are clear.

Speaker Change: We expect 2024 to be a much better year I'd like to turn the call over now to the operator for Q&A.

Speaker Change: Yeah.

Speaker Change: Thank you.

Operator: Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question. Please press star and one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question is from the line of Joe Altobello with Raymond James. Please go ahead. Thanks. Hey guys, good morning. I just want to start with demand. Have you guys seen any improvement as a result?

Speaker Change: Ladies and gentlemen, we will wait for a moment, while we poll for questions.

Speaker Change: Our first question is from the line of Joel <unk> with Raymond James. Please go ahead.

Joel: Thanks, Hey, guys. Good morning, I'm, just I just wanted to start with demand have you guys seen any improvement as the spring has progressed overall and how did your new unit sales on a same store basis look look in April.

Marcus A. Lemonis: You know, we continue to see demand, Joe. And what hasn't been the problem for our company is demand. What has been the problem, I think, for our company in the back half of 23, and probably for the industry, is really this affordability factor, which is why at the beginning of the year, we were very vocal about driving down these ASPs to find the intersection with new interest rates at a payment level that was affordable. So we have no demand problem.

Speaker Change: You know, we continue to see demand, Joe and what what hasn't been a problem for our company is demand what has been the problem I think for our company in the back half of 'twenty, three and probably for the industry is really this affordability factor, which is why at the beginning of the year. We were very vocal about driving down these asp's to find.

Speaker Change: The intersection with no interest rates at a payment level that was affordable. So we have we have no demand problem well we were struggling with was a conversion problem, which is why we made this really heavy pivot into lower price units. So that we can gain market share April has continued to perform a double digits on a same store.

Marcus A. Lemonis: What we were struggling with was a conversion problem, which is why we made this really heavy pivot into lower price units so that we could gain market share. April has continued to perform double digits on a same store basis on new. And quite frankly, we don't expect that to slow down. Now, as we go through the balance of the year, we think that there's an opportunity to continue to accelerate that. But we need the macro to help us a little bit to get to where we really want to get to. As you know, macro has been pretty tough for the first four months.

Speaker Change: <unk> on new and quite frankly, we don't expect that to slow down now as we go through the balance of the year, we think that there's an opportunity to continue to accelerate that but we need the macro to help us a little bit to get to where we really want to get too as you know the macro has been pretty tough for the first four months. So we're.

Speaker Change: Really proud of our team and the positive results, particularly I think in the month of March or April excuse me in February we recorded the highest market share in the history of our company.

Marcus A. Lemonis: So we're really proud of our team and the positive results, particularly, I think, in the month of March or April, excuse me, in February, we recorded the highest market share in the history of our Very helpful. And just on the affordability issue in terms of pricing, it sounds like you don't think we need a further decline, maybe talk about Look, I always would love to have lower prices because lower prices means that the funnel is wider, but I don't anticipate anytime soon that we're going to see any material movement off the 24 price, I want to make a finer point about that, though, because as we finished the back half of 2023, we still internally had a lot of uncertainty around where invoice pricing would settle.

Speaker Change: Very helpful and just on that.

Speaker Change: The affordability issue in terms of pricing it sounds like you don't think we need a further decline in invoice prices on new Rvs next year, maybe talk about the thinking on that.

Speaker Change: Hey, look I always would love to have lower prices because lower prices means that the funnel is wider but I don't anticipate any time soon that we're going to see any material movement off the 24 pricing I want to make a finer point about that though because as we finish the back half of 2023.

Speaker Change: We still internally had a lot of uncertainty around where invoice pricing would settle we did a great job of negotiating like for like pricing down on 24 models, but we were still feeling a little flat footed on could that continue to decline that is why you saw us pulled back so our feed.

Marcus A. Lemonis: We did a great job of negotiating like-for-like pricing down on 24 models, but we were still feeling a little flat-footed on whether that could continue to decline. That is why you saw us pulled back so feverishly and so disciplined on our procurement of used cars. And when you look at the used results for the first quarter, I want to make sure that people hear me loud and clear that there is no issue with RV demand for used units.

Speaker Change: Virtually and so disciplined on our procurement of used and when you look at the use results for the first quarter I wanted to make sure that people hear me loud and clear that there is no issue with RV demand unused units, we made the conscious decision to not put the shareholders' money at.

Marcus A. Lemonis: We made the conscious decision to not put the shareholders' money at risk by investing in assets while we believe there was potentially still a falling sword. Now that we feel more confident that the pricing on new units have relatively stabilized, and that doesn't mean they couldn't go up by a percentage or down by a percentage, but no violent moves up or down that would cause our used inventory to be out of whack, we will start to step on the gas again, probably around the middle of May, and slowly and cautiously start to ramp back up again as we get back to levels that we believe we need to have in stock to meet our sales goals.

Speaker Change: Risk by investing in assets, while we believe there was potentially still a falling sort now that we feel more confident that the pricing on new units have relatively stabilized and that doesn't mean, they couldn't go up by a percentage or down by a percentage, but no violent moves up or down.

Speaker Change: That would cause our used inventory to be out of whack, we will start to step on the gas again, probably around the middle of May and slowly and cautiously start to ramp back up again as we get back to levels that we believe we need to have in stock to meet our sales goals.

Marcus A. Lemonis: So when you look at the overall financials, we want you not to be alarmed by the drop in used car sales because it is not a function of a drop in demand. It is a function of us carrying materially less than we did a year ago, and we think it was prudent and us deciding to take a lot of pain in Q1 and a little bit in Q2 as it related to our used margins so we can right-size our inventory. We never want our shareholders to feel that we're holding onto assets that we don't really feel strongly about the value. So we made that more aggressive.

Speaker Change: So when you look at the overall financials, we want you to not be alarmed by the drop in used sales because it is not a function of a drop in demand. It is a function of us carrying materially less than we did a year ago, and we think it was prudent and us deciding.

Operator: Our next question is from the line of James Hardeman with Citi. Please go ahead.

Speaker Change: To take a lot of pain in Q1, and a little bit in Q2 as it related to our used margins. So we can rightsize our inventory we never want our shareholders to feel that we're holding on to assets that we don't really feel strongly about the value. So we made that aggressive move.

Speaker Change: Got it okay. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question is from the line of James Hardiman with Citi. Please go ahead.

James Lloyd Hardiman: Hey, good morning. Thanks for taking my call.

James Hardiman: Hey, good morning, Thanks for taking my call. So.

Marcus A. Lemonis: So Marcus, you already talked about sort of timing surrounding the model year 20 or not timing, pricing surrounding the model year 25, but maybe you could delve into just the broader landscape surrounding that model year changeover. It feels a little bit like Groundhog Day. Yet again, as we sort of brace for that changeover, you know, the timing of the release, is there any chance that that might shift or not? And just any wrinkles that you think that's going to bring along, particularly how much dealers, maybe some of your peers, are sort of holding out for the 25 and whether or not there's going to be enough inventory between here and there to satisfy retail demand? Thanks.

James Hardiman: Mark if you already talked about sort of timing surrounding the model year, 'twenty or not timing pricing surrounding the model year 'twenty five but maybe.

James Hardiman: Delve into just the broader landscape surrounding that model year changeover, it feels a little bit like Groundhog day.

James Hardiman: Yet again.

James Hardiman: Sort of break for that changeover.

James Hardiman: Timing of the relief is there any chance that that might shift.

James Hardiman: Or not and just any wrinkles that you think that's going to bring along particularly.

James Hardiman: How much dealers, maybe some of your peers are sort of holding out for the 25, and whether or not there's going to be enough inventory between here and there to satisfy retail demand.

Marcus A. Lemonis: Yeah, I mean, that's something that we're thinking about every day. One of the things that we are concerned about, and it definitely went into our use thesis, is unfortunately the number of 22s and aged inventory that is sitting on our competitor's lot, and there seems to be gridlock. And that was the gridlock that we told all of you, both in the Q4 call and in our investor conferences, that we were unwilling to participate in. We were going to take whatever financial pain on a short term basis that we needed to.

Marcus A. Lemonis: Yeah, I mean, that's something that we think about every day. One of the things that we are concerned about, and it definitely went into our use thesis, is the number of 22s and aged inventory that is sitting on our competitor's lot. There seems to be gridlock. And that was the gridlock that we told all of you, both in the Q4 call and in our investor conferences, that we were unwilling to participate in. We were going to take whatever financial pain on a short-term basis that we needed to.

James Hardiman: I mean, that's something that we're thinking about every day one of the things that we are concerned about it and it definitely went into our E. R. Use thesis is unfortunately, the number of 'twenty twos and aged inventory that is sitting on our competitors' lots and there seems to be gridlock and that was the grid lock that we told all of you both in the queue.

James Hardiman: For our call and in our Investor conferences that we were unwilling to participate and we were gonna take whatever financial paying on a short term basis that we needed to we don't believe that every dealer has necessarily taken the steps to do that so that's probably why you see us a little tepid on are leaning in to use because we don't know if.

Marcus A. Lemonis: We don't believe that every dealer has necessarily taken the steps to do that. So that's probably why you see us a little tepid on leaning into use, because we don't know if there's going to be some surplus of 22s that could be out there in a foreclosure or liquidation scenario. We believe that the manufacturers have been very intelligent and very smart in listening to the dealer body around the rollout of 25s, and we're anticipating probably a late summer, July, and August start for 25s for the most part.

James Hardiman: There's going to be some surplus of 20 twos that could be out there in a foreclosure and liquidation scenario. We believe that the manufacturers have been very intelligent and very smart and listening to the dealer body around the rollout of 25 and we're anticipating.

James Hardiman: Probably a late summer July August start on 25 for the most part there may be a few motor home manufacturers in very small scale that start to leak out. Some some 25. This idea that our competitors are sort of waiting to buy 20 fives.

Marcus A. Lemonis: There may be a few motorhome manufacturers at a very small scale that start to leak out some 25s. This idea that our competitors are sort of waiting to buy 25s, I sure hope that nobody is running their business that way, because they're going to miss an entire selling season. And that entire selling season is going to lead to a lack of cash flow, a lack of margin, and continued aging on their part. And when you look at shipments, we still do believe that shipments and retail are going to be in the $335,000 to $345,000 range. So we could be off by a couple thousand, but that's kind of where we see the general ball of wax.

James Hardiman: I sure hope that nobody is running their business that way, because theyre going to miss an entire selling season and that entire selling season is going to lead to a lack of cash flow a lack of margin and continued aging on their part and when you look at shipments we still do believe that shipments and retails are going to be in the 335000.

James Hardiman: Two 345000 range.

James Hardiman: So we could be off by a couple of thousand, but that's kind of where we see the general ball of wax when we see that we know that there has to be some replacement because if you have oh.

Marcus A. Lemonis: When we see that, we know that there has to be some replacement because if you have retail and replacements, we don't believe that there's going to be de-stocking here in 2024. And we're hopeful, like in our business, that we're going to accelerate into better same-store sales and then restocking in the back half. But we don't think that the manufacturers are going to play any boogeyman tricks on us because it's not in their best interest.

James Hardiman: Retails and replacements, we don't believe that there's going to be destocking here in 2024, and we're hopeful like in our business that we're going to accelerate into better same store sales and then a restocking in the back half, but we don't think that the manufacturers are going to play any bogeyman surprise on us.

James Hardiman: Because it's not in their best interest if they rollout twenty-five earlier than they should or earlier than they've committed to they're kind of doing themselves into service at the same time, because there are still 20 twos out there there are still 20 threes out there and we're down to I think Matt you had said like 3500 3800 else right in that.

Marcus A. Lemonis: If they roll out 25s earlier than they should or earlier than they've committed to, they're kind of doing themselves a disservice at the same time because there are still 22s out there. There are still 23s out there, We're down to, I think Matt, you had said like 3,500 or 3,800 in that range. But we're much better than we were a year ago. I can't say that for everybody, but we're prepared for it. We also do believe that certain dealers have made some miscalculations in bringing in fresh inventory. We don't know if it's miscalculations on their part or the floor plan lenders preventing them from bringing new inventory in while they still have age. That's why we feverishly wanted to get rid of them.

James Hardiman: Range were much better than we were a year ago I can't say that for everybody, but we're prepared for it. We also do believe that certain dealers have made some some miscalculations and bringing in fresh inventory. We don't know if it's miscalculations on their part or the floor plan lenders.

James Hardiman: Preventing them from bringing new inventory and while they still have H. That's why we feverishly wanted to get rid of that.

Matthew D. Wagner: Just even further add to that, James, to speak more directly about the model year changeover, I believe that motorized model year 2025s will start to hit the market slowly here over the coming month, actually beginning this month, and will start to accelerate here over the ensuing months. Non-motorized, however, have never necessarily been the issue in terms of aged model year units.

James Hardiman: Just even further add to that James to speak more directly about the model year changeover I believe that motorized multi year 2025, we will start to hit the market slowly here over the coming months actually beginning this month and will start to accelerate here over the ensuing months motorized however, never necessarily been the issue in terms of age model year units rather tow.

Matthew D. Wagner: Rather, towables could potentially be the future, but we believe that we've managed our inventory very effectively. We believe that the Malta Year 2025 total units, both travel trailers and fifth wheels, will at least turn over and start to be produced in July, but there won't be meaningful amounts of them really hitting the marketplace until maybe the October, November, and December time frame.

James Hardiman: <unk> could potentially for the future, but we believe that we manage our inventory very effectively.

James Hardiman: We believe that the model year 2025, total units, both travel trailers and fifth wheels, well at least turn over and start to be produced in July, but there wont be meaningful amounts of them really hitting the marketplace until maybe October November December timeframe, and when we think about where we were this time last year, where at least a thousand units better and.

Matthew D. Wagner: And when we think about where we were this time last year, we're at least a thousand units better in terms of the age Malta year removal. So as I take a step back and look at how we've played this game and even be very direct about the wholesale shipment numbers that came out recently, if I'm not mistaken, the travel trailer segment was up about 10,000 units. And that's really where you saw the most material gain.

James Hardiman: Arms of the age multiyear removal, so as I take a step back and look at how we've played this game and even be very direct about the wholesale shipment numbers that came out recently, if I'm not mistaken. The travel trailer segment was up about 10000 units and that's really where you saw the most material gain just to be clear we were up over that same time.

Matthew D. Wagner: Just to be clear, we were up over that same time period in terms of wholesale shipments, about 10,000 units. We've been largely having the foresight to play this game more intelligently than our peer group. And we've been identifying these certain segments, price points that have been turning, which is why we've been picking up material markets. We believe that this thesis will continue to play out exactly as we've suggested through the balance of the year.

Speaker Change: You're right in terms of wholesale shipments about 10000 units, we've been largely having the foresight to play this game more intelligently than our peer group and we've been identifying the certain segments price points that have been turning which is why we've been picking up material market share. We believe that this thesis will continue to play out exactly as we suggested through the balance of the year.

Matthew D. Wagner: And as such, we think we'll be sitting in a really advantageous position by September-October to re-group once again and start to play a whole new cycle, a whole new game on the new side while at the same time picking up the momentum from the new side and starting to translate that to the youth. We feel good as we sit here today, but we'll obviously check back in the next three months to ensure that we're hitting all of our goals.

Speaker Change: And as such we think will be sitting in a really advantageous position by September October to re up once again and start to play a whole new cycle, a whole new game on the new side, while at the same time picking up the momentum from new and starting to translate that to the use side, we feel good as we sit here today, but check back obviously in the next three months to ensure that we're hitting all of our <unk>.

James Hardiman: <unk>.

Marcus A. Lemonis: I got it. That's really helpful. And then, obviously, over the last month or two, the financial markets appear to be pricing in or at least bracing for rates to be higher for longer. Maybe walk us through sort of the RV ecosystem and whether or not you think the various players have adjusted any of their activity as a result of that. I guess, first starting with lenders, like, how have rates trended as of late, and then customers to the April question: did things get a little bit better, a little bit worse in the month of April relative to sort of that one run rate.

Speaker Change: Got it that's really helpful and then.

James Hardiman: Obviously over.

James Hardiman: Over the last month or two.

James Hardiman: Financial markets appear to be pricing in or at least bracing for rates to be higher for longer.

James Hardiman: Maybe walk us through sort of the RV ecosystem, and whether or not you think the various players have adjusted.

James Hardiman: Any of their activity as a result of that I guess first starting with lenders like how if rates trended.

James Hardiman: As of late.

James Hardiman: And then customers to the April question, if things get a little bit better little bit worse in the month of April relative to sort of that that <unk> run rate and then I guess lastly dealers.

Marcus A. Lemonis: And then, I guess lastly, dealers, you know, you guys have made it no secret that a lot of your peers have been sort of unwilling to take their medicine, maybe hoping that they'll get bailed out by lower rates. Any change in that stance? Thanks.

James Hardiman: You guys had made it no secret that a lot of your peers have been sort of unwilling to take their medicine, maybe hoping that they'll get bailed out by lower rates any.

James Hardiman: Any change in that sense.

Marcus A. Lemonis: Yeah, you know, I'll start with our own business, because that obviously is what matters most. The potential delay, which seems to be more, you know, more firm than it was a couple of months ago on any rate reductions, has a negative impact on everybody because it affects affordability. So we have a lot more wrangling to do with our retail lenders trying to, you know, figure out how to make things affordable for people.

Speaker Change: Yeah, well I'll start with our own business because that obviously is what matters most.

Speaker Change: Potential delay, which seems to be more you know more firm than it was a couple of months ago on any rate reductions has a negative impact on on everybody because it affects affordability. So we have a lot more wrangling to do with our retail lenders trying to figure out how to make things affordable for people. The unfortunate thing in the simplest thing is.

Marcus A. Lemonis: The unfortunate thing, and the simplest thing, is that we look at the rate reductions, and we have been planning for rate reductions in our P&L for the year. And the lack of rate reductions, unfortunately, for us, something as simple as floor plan interest is going to be $15 million higher than we anticipated at the beginning of the year.

Speaker Change: Kevin when you look at the rate reductions and we have been planning on rate reductions in our P&L for the year and the lack of rate reductions. Unfortunately for us something as simple as floor plan interest is going to be $15 million higher than we anticipated at the beginning of the year. So it's not anything that we have control over everything that we're doing but that's $15 million.

Marcus A. Lemonis: So not anything we have control of, not anything that we're doing, but that's $15 million that we have to really work hard to try to find somewhere else. We do believe that the consumer has started to settle in around where rates are, and that doesn't mean that they're accepting it, but they're not as shell-shocked as when all the rates were moving up in 2023 at a really rapid pace, and people just couldn't, you know, deal with it. We've had to really pivot our mix. And I think our mix has really given us two benefits.

Speaker Change: That we have to really work hard to try to find somewhere else.

Speaker Change: We do believe that that the consumer has started to settle in around.

Speaker Change: Where rates are and that doesn't mean that they are accepting it but they're not as shell shocked by when all the rates were moving up in 2023 at a really rapid pace and people just couldn't deal with it we've had to really pivot our mix.

Marcus A. Lemonis: Number one, our change in mix and driving down those ASPs has allowed us to find a wider audience. And yet it's evidenced by our massive, massive market share growth that we've never seen in the history of our, Secondarily, when you drive down your ASPs and you drive down affordability, you could see in the performance of our finance and insurance business is really, really performing nicely. Had we not driven down ASPs, we believe our volume would have been lower and we believe our F&I performance would have been lower because when a customer is buying off on a monthly payment that includes a warranty that they need, roadside assistance that they need, and the other products that we sell, had we not been able to drive down the price, and unfortunately some of that's through margin, we would not have been able to recapture some of that margin on the back end.

Speaker Change: And I think our mix has really given us two benefits number one our change in mix and driving down those asp's has allowed us to find a wider audience and that's evidenced by our massive massive market share growth that we've never seen in the history of our business secondarily when you drive down your <unk>.

Speaker Change: Asps and you drive down affordability, you could see in the performance of our finance and insurance business is really really performing nicely. How do we not driven down Asp's. We believe our volume would have been lower and we believe our F&I performance would have been lower because when our customers buying off on a monthly payment that includes a warranty.

Speaker Change: That they need roadside assistance that they need and the other products that we sell had we not been able to drive down the price and unfortunately some of that's through margin, we would not have been able to recapture some of that margin on the backend. So when people look at our overall Gpus, we strongly strongly encouraged.

Marcus A. Lemonis: So when people look at our overall GPUs, we strongly, strongly encourage them, as we have since the beginning of our company, to take the front end gross profit and the back end gross profit and look at the combined GPU. I worry very significantly about a small subset of dealers that could be anywhere from four to five to six thousand units that could be out there that are still 2022, people that have been unwilling to take their medicine. Now, I say that so cavalierly; the reality of it is that some dealers may not have the financial wherewithal to stomach taking on that pain.

Speaker Change: Them as we have since the beginning of our company to take the front end gross profit and the backend gross profit and look at the combined GPU from our perspective, we're agnostic of how we accumulate gross we'd like to accumulate more growth on the front end, but we feel like we've been very successful in doing that.

Speaker Change: I worry very significantly about a small subset of dealers that could be anywhere from four to five to 6000 units that could be out there that are still 2020 twos.

Speaker Change: People that have been unwilling to take their medicine now I say that so cavalierly. The reality of it is is that some dealers may not have the financial wherewithal to stomach, taking on that pain and whether it's dribbling it out through curtailments or taking on transactions that have negative gross profit our balance sheet.

Marcus A. Lemonis: And whether it's dribbling it out through curtailments or taking on, you know, transactions that have negative gross profit, our balance sheet and the strength of our balance sheet, our willingness to part with non-core assets, and our willingness to liquidate things that don't make sense to us have given us that dry powder to be able to stomach that. I think that's a unique thing about our company is that we have managed this balance sheet, in our opinion, so well that in these types of moments where we need to dig a little deeper into our pockets and invest in our company, we're able to do that.

Speaker Change: And the strength of our balance sheet, and our willingness to part with noncore assets and our willingness to liquidate things that don't make sense to us has given us that dry powder to be able to stomach that I think that's a unique thing in our company is that we have managed this balance sheet in our opinion, so well that in these types of moments.

Speaker Change: Where we need to dig a little deeper into our pocket and invest in our company. We're able to do that look we're not happy with our first quarter financial results, but if you normalize margins just back to some like normal level and use our EBITDA would have been just fine, but we made a conscious decision to take that gross profit.

Marcus A. Lemonis: Look, we're not happy with our first quarter financial results, but if you normalize March, just back to some like normal level unused, our EBITDA would have been just fine. But we made a conscious decision to take that gross profit pain, which ultimately is using some of our working capital to invest in that, seeing the dividends of that in market share, seeing the dividends of that in clean inventory, seeing the dividends of that in our ability to buy stores at almost a zero-time multiple. That's how we built this business.

Speaker Change: <unk>, which ultimately is using some of our working capital to invest in that seeing the dividends of that end market share seeing the dividends and that in a clean inventory seeing the dividends and our ability to buy stores at almost a zero time multiple that's how we built this business and the amount of stores that we've added in the last 12.

Marcus A. Lemonis: And the amount of stores that we've added in the last 12 months, my best recollection, I think we're at about 33 new locations since the beginning of this down market in 22. I mean, down market at the beginning of 23, those things are going to start to pay dividends. So as you really, really study our financials, we encourage you to do a little pro forma work like we do. A lot of people have put pressure on me. Why aren't you firing more people? Why aren't you getting rid of more people?

Speaker Change: Months, My best recollection, I think we're at about 33, new locations since the beginning of this down market in 'twenty two.

Speaker Change: <unk> market is beginning of 'twenty three those things are going to start to pay dividends. So as you really really study our financials. We encourage you to do a little pro forma work like we do a lot of people that put pressure on me why aren't you firing more people why aren't you getting rid of more people, we want to invest in our people because our <unk>.

Marcus A. Lemonis: We want to invest in our people because our market share is a function of our people's performance, not Matt and I. Our performance on Good Sam is a function of our people. Our solid service and parts business is a function of our people. We're not willing to just start gassing people because we also know that this business returns like a hockey stick. We can go from 10% in a new market to 25% in a matter of six to eight months. Those things require people.

Speaker Change: <unk> share is a function of our People's performance not Matt and I are performance on good Sam is a function of our people are solid service and parts business as a function of our people were not willing to just start gassing people. Because we also know that this business returns like a hockey stick. We can go from up 10% on a new market.

Speaker Change: To 25% and a matter of six to eight months, we need people to do that and as you open up new stores as you add new locations as we add our auction business as we continue to make acquisitions as we wanted to improve training those things require people.

Marcus A. Lemonis: One little fun fact about investing in those people. Our NPS score, which is a very, very, very important thing that determines the long-term health of any business, is at an all-time high in service. We went from negative NPS scores three years ago, when we were selling like you couldn't stop us, to raising that number to north of 32%. That is unheard of in our industry. We have spent several million dollars reframing the process, and restructuring the business to be able to take care of our customers in a good way.

Speaker Change: One little fun fact around the importance of investing in those people our NPS scores, which is a very very very important thing that determines the long term health of any business is at an all time high in service. We went from negative NPS scores three years ago.

Speaker Change: When we were selling you know like like you couldn't you couldn't stop us to raising that number to north of 32% that is unheard of in our industry. We have spent several million dollars re framing up the process re staffing the business to be able to take care of our customer.

Speaker Change: Is that a good way in our mind, we know what's running through our P&L. Those are investments those types of investments is what's going to allow us to really continue to grab share here in the next 12 months to 24 months and I can promise you, Matt and I are laser focused on managing the balance sheet.

Marcus A. Lemonis: In our minds, we know it's running through our P&L because those are investments. Those types of investments are what's going to allow us to really continue to grab share here in the next 12 to 24 months. And I can promise you Matt and I are laser focused on managing the balance sheet, using our cash very intelligently, liquidating or selling off non-core assets and reinvesting those in our people, in our used inventory, and ability to be market makers, and in strategic acquisitions.

Speaker Change: Using our cash very intelligently.

Speaker Change: <unk> or selling off noncore assets and reinvesting those in our people and our used inventory and the ability to be market makers in and strategic acquisitions.

Speaker Change: Yeah.

Operator: That's a great color. Thank you.

Speaker Change: That's great color. Thank you.

Speaker Change: Yes.

Speaker Change: Thank you.

Scott Lewis Stember: Our next question is from the line of Scott Stember with Rott MKM. Please go ahead. Good morning, and thanks for taking the time.

Speaker Change: Our next question is from the line of Scott symbol, but its not M. Kim. Please go ahead.

Scott Lewis Stember: Good morning and thanks for taking my question. Yes, sir. Um, can you maybe talk about the, I guess, the tenor of sales in April? You said that they were still up double digits. Has there been an acceleration on the news side? New units from March into April.

Scott: Good morning, and thanks for taking my questions.

Scott: Yes, Sir.

Scott: Can you maybe talk about the I guess the tenor of sales in April you said that they were still up double digits has there been an acceleration on the new side from new units from March into April.

Marcus A. Lemonis: An acceleration meaning on a percentage of the same story.

Scott: And acceleration, meaning on a percentage of same store.

Scott Lewis Stember: Yeah, or year-over-year, just in general, just what you're saying. Yeah, I think the answer is we're running at about the same pace, but what is the nuance inside of that is that we had a pretty good April, a decent April last year. And so while we're up double digits again in April, it actually, in my mind, means we're even doing better than March because we had a really, really rough March last year.

Scott: Our year over year, just that just in general.

Speaker Change: And I think the answer is we're running at about the same pace, but what is a nuance inside of that is that we had a pretty good April decent April last year, and so while we're up double digits again in April it's actually it actually in my mind means or even doing better than March because we had a really really rough.

Speaker Change: March last year. So if we were up call. It mid double digits or you know kind of 15 and 16 in the month of March we were coming off a pretty low comp April was a really good year for a really good month for us last year on a volume basis. It could have been the way.

Scott Lewis Stember: So if we were up, call it mid-double digits or 15, 16 in the month of March, we were coming off a pretty low comp. April was a really good month for us last year on a volume basis. It could have been the way the weekend fell or the days fell on the calendar. We were up against not a terrible number, and we still performed on a double-digit basis. So, in our estimation, we either stayed even with March or even outpaced it a little bit on a comparative basis.

Speaker Change: The weekend Fowler the days fell in the calendar, we were up against not a terrible number and we still performed on a double digit basis. So in our estimation, we either stayed even with march or even outpaced it a little bit on a comparative basis.

Matthew D. Wagner: I mean, Scott, we often look at it week to week, and it's consistently, through the first four months of the year, oscillated between high single digits to 20-plus percent week to week, in terms of our year-over-year gains. That's actually the cleanest way to look at it. And through the balance of a quarter, it all just shakes out.

Speaker Change: I mean, Scott, we oftentimes looking it week to week and it's consistently through the first four months of the year oscillated between high single digits to 20 plus percent week to week in terms of our year over year gains that's actually the cleanest way to look at it and through the balance of the quarter at all just shakes out.

Scott Lewis Stember: Got it. And then on the products and services side, if you were to back out the furniture business and the discontinued active sports business, what is just pure, you know, service, parts, and service? You said it sounded like in your prepared remarks that it was going quite well. But can you just give us a flavor of how that business is doing? Yeah.

Speaker Change: Got it and then on the products and services side, if you were to back out the furniture business and the.

Speaker Change: The discontinued active sports business.

Speaker Change: What is it just pure lead.

Speaker Change: Service and parts and service you said it was it sounded like in your prepared remarks, it was growing quite well, but can you just give us a flavor of how that that.

Speaker Change: Business is doing.

Marcus A. Lemonis: Yeah, so we look at our parts and service business in two distinct categories. Our external work, which is when we're taking in customer-paid work, which is up nicely over a year ago. That's always, by the way, a great bellwether for the health of the industry: our people coming in, booking appointments, getting repair work. Our customer pay, which is actually not provided by us internally, is up over last year.

Speaker Change: So we look at our parts and service business in two distinct categories. Our external work, which is when we're taking in customer pay work, which is up nicely over a year ago. That's always by the way a great bellwether for the health of the industry is are people coming in booking appointments getting a repair work our customer pay which is.

Speaker Change: Actually not provided by us internally our customer pay work is up over last year. Our internal work. That's the work that we do to repair trade ins or purchases that we make is down but it's down because we elected not to go out and procure used inventory, we could have easily manipulated that number.

Marcus A. Lemonis: Our internal work, that is, the work that we do to repair trade-ins or purchases that we make, is down, but it's down because we elected not to go out and procure used inventory. We could have easily manipulated that number by chasing used inventory, buying things we shouldn't be buying, and that number would have looked good. So we know that when the used business is down, we know the internal work is down. When the used business is up, the internal work subsequently goes up.

Speaker Change: By chasing used inventory buying things, we shouldn't be buying and that number would have looked good. So we know that when the used business is down we know the internal work is down when the used business is up the internal work work subsequently goes up but we determined the health of our overall industry and our company based on how customers show up.

Marcus A. Lemonis: But we determine the health of our overall industry and our company based on how customers show up to actually give us money to repair and replace things on their units. So we feel very good about that indicator.

Speaker Change: To actually give us currency to repair and replace things under unit. So we feel very good about that indicator.

Scott Lewis Stember: Got it. And then just the last question, it seems that you're looking for lower retail sales for the industry this year. Is that changing your view of Camping World's ability to sell more units at retail this year? And also, I think last quarter you gave just some EBITDA growth expectations. Is there an update on that?

Speaker Change: Got it and then just the last question it seems like Youre looking for lower.

Speaker Change: Retail sales for the industry. This year is that changing your view of camping world's ability to sell.

Speaker Change: So more units at retail this year and also.

Speaker Change: I think last quarter, you gave some EBITDA growth.

Speaker Change: Expectations.

Speaker Change: Is there an update on that.

Marcus A. Lemonis: Yeah, I wouldn't call them expectations. I would definitely call them goals.

Speaker Change: Yeah, I wouldn't call them expectations, I would definitely call them goals our goals haven't really moved we know what we need to do to deliver value to our shareholders. We were facing a few more headwinds that we didn't anticipate that have nothing to do with us like the fact that the rates aren't going to drop or the fact that the macro isn't that good but Matt.

Marcus A. Lemonis: Our goals haven't really changed. We know what we need to do to deliver value to our shareholders. We, you know, are facing a few more headwinds that we didn't anticipate that have nothing to do with us, like the fact that the rates aren't going to drop or the fact that the macro isn't that good. But Matt and I, along with Tom and Lindsey and the rest of the team, have said, "Okay, we have to figure out what other pivots we have to make."

Speaker Change: And I, along with Tom and Lindsay and the rest of the team have said, okay. We have to figure out what other pivots, we have to make if we can't control certain factors in the marketplace. There are things we can control. So we have to be very prudent about how we're opening stores and how we're thinking about that as a small example of that we have to.

Marcus A. Lemonis: If we can't control certain factors in the marketplace, there are things we can control. So we have to be very prudent about how we're opening stores and how we're thinking about that. As a small example of that, we have two stores that are ready to open. The stores are being built. They're ready to go. We have elected to push those off until the end of the year or the first of next year because every single choice that we make has an impact on the bottom line.

Speaker Change: Two stores that are ready to open the stores are built they're ready to go we have elected to push those off to the end of the year or the first of next year. Because every single choice that we make has an impact on the bottom line and we have a goal of achieving that our own goals and we don't want to do anything thats going to put those goals in jeopardy.

Marcus A. Lemonis: And we have a goal of achieving that, our own goals, and we don't want to do anything that's going to put those goals in jeopardy, at least in the areas that we have control of. We expect our sales to go up, Matt, and even

Speaker Change: At least in the areas that we have control of.

Speaker Change: We expect our sales, Matt and even just hopefully rely largely upon us that survey information that I think we've proven that we can buck the trend of the larger industry. So regardless of what's happening we feel like we've hit the goals that we set forth and broadly for a claim that we're going to hit double digit new same store sales.

Matthew D. Wagner: And even just to hopefully rely largely upon that survey information, I think we've proven that we could beat the trend of the larger industry. So regardless of what's happening, we feel like we've hit the goals that we set forth and broadly proclaim that we're going to hit double-digit new same-store sales, and we're going to continue to experience growth in that new same-store number heading into the back half of the year. I believe in pretty material growth based upon how we've played our hand with our inventory procurement.

Speaker Change: And we're going to continue to experience growth in that new same store number heading into the back half of the year I believe pretty material growth based upon how we played our hand with our inventory procurement.

Scott Lewis Stember: I got it. That was great. Thank you so much.

Speaker Change: Got it that was great. Thank you so much.

Marcus A. Lemonis: Well, we wouldn't mind if they dropped the rates a little bit. We could use a little interest expense relief, for sure.

Marcus A. Lemonis: But we wouldn't mind if they dropped the rates a little bit.

Speaker Change: Well, we wouldn't mind, if they dropped the rates a little bit we could use a little interest interest expense relief for sure.

Speaker Change: Yeah.

Speaker Change: Got it thank you.

Operator: Thank you. The next question is from Noah Zatzkin with KeyBank Capital Markets.

Speaker Change: Thank you. Our next question is from Knowhow that skin with Keybanc capital markets. Please go ahead.

Noah Zatzkin: Hi, thanks for taking my questions. Um, not to put too fine a point on this, but, you know, in terms of the 30% adjusted EBITDA growth goal for the year, working towards that, has anything changed in terms of the calculus to get there? You noted that you were expecting around the $38,000 level on the new ASP, and I think used margins came in a bit stronger than I was expecting. Just wondering how you're thinking through the new and used businesses, maybe relative to a few months ago as you worked towards that goal.

Knowhow: Hi, Thanks for taking my questions.

Knowhow: Not to put too fine a point on this but but.

Knowhow: In.

Knowhow: Ms of kind of the 30%.

Knowhow: Adjusted EBITDA growth goal for the year I'm working towards that has anything changed in terms of the calculus to get there.

Knowhow: You noted expecting 38 around the 38000 dollar level on the new ESP.

Knowhow: Thank yous margins came in a bit.

Knowhow: Stronger than than than than I was expecting so just wondering how youre kind of thinking through.

Knowhow: The new.

Knowhow: And used businesses.

Speaker Change: Maybe relative to a few months ago as you kind of work towards that goal. Thanks, Yeah. I think that's a great question you know our goals remain the same but you were very old ones have been thrown in our face that you know, we're having to sort of reach into our rebate hat and try to find new opportunities the interest rate expense on the floor plan piece.

Noah Zatzkin: Yeah, I think, you know, that's a great question. You know, our goals remain the same, but variables have been thrown at our face that, you know, we're having to sort of reach into our rabbit hat and try to find new opportunities. The interest rate expense on the floor plan piece is a real number. I mean, it's $15 million.

Speaker Change: <unk> is a real number I mean, it's $15 million, it's not it's not like.

Marcus A. Lemonis: It's not like, you know, maybe it'll happen. It's just factually correct. I think secondarily, you know, had interest rates started to drop, we may have experienced, you know, we all anticipated that maybe by summer, you know, something would have pushed us. We have now taken any interest rate cuts out of our calculus entirely.

Speaker Change: Maybe it'll happen. It's just factually correct I think secondarily you know had had interest rates started to drop we may have experienced we all anticipated that may be by summer.

Speaker Change: Something would have pushed we now have taken any interest rate cuts out of our calculus entirely and that's putting a little bit of pressure on asps.

Marcus A. Lemonis: And that's putting a little bit of pressure on ASPs. And as ASPs get pushed down, because we want to drive market share, that puts pressure on the overall GPU on the front end side. While we can make it up on the back end, if it's a $40,000 ASP, and the margin is X, or it's a $37,000 ASP, and it's the same margin percentage, there are just fewer gross dollars available.

Speaker Change: And as Asps get pushed down because we want to drive market share that puts pressure on the overall GPU on the front end side, while we can make it up on the backend if its a $40000 ASP and the margin is X or it's a $37000 ASB and it's the same margin percentage, there's just less gross dollars available.

Speaker Change: So that's put a little bit of pressure that we're having to sort of work around I think the other piece is we're not going to take our foot off the gas as we've seen the positive results in continuing to rebalance our inventory and we will have continued pressure on the used side both on margin and in demand here in April and it will extend over.

Marcus A. Lemonis: So that's put a little bit of pressure on us that we're having to sort of work around. I think the other piece is that we're not going to take our foot off the gas, as we've seen positive results in continuing to rebalance our inventory. And we will have continued pressure on the U.S. side, both on margin and in demand here in April, and it will extend over into May.

Marcus A. Lemonis: And that's something that Matt and I have looked at and said, we're going to take whatever pain people are going to give us. But we know if we owned this business, just the two of us, we would be doing this because it's the right business decision. And we've seen the fruits of that. And I think Kim and I have gotten really excited about when you make these really conclusive decisions to drive ASP down, and you see the results, it becomes like a drug. You want to chase it some more.

Speaker Change: We're into May and that's something that Matt and I have looked at and said we're going to take whatever pain people are going to give us, but we know if we owned this business just the two of US we would be doing this because it's the right business decision and we've seen the fruits of that and I. Thank him and I have gotten really excited by when you make these really.

Speaker Change: Conclusive decisions to drive Asps down and you'll see the results it becomes like a drug you want to chase. It some more when you make the tough decisions to get rid of the Houston to rebalance and you see the positive results you want to chase that some more we want to do the things that we think we would do if it was just us and that's how we're running the <unk>.

Marcus A. Lemonis: When you make the tough decisions to get rid of the use and to rebalance, and you see the positive results, you want to chase that some more. We want to do the things that we think we would do if it was just us. And that's how we run the business. And we know that, optically, the results don't necessarily reflect where we want them to be or where other people want them to be.

Speaker Change: And we know that optically the results don't necessarily reflect where we want them to be or where other people want them to be when you see market share growth when you see us hitting our other goals around good Sam when you see us hitting our internal customer pay work when you see the F&I results. We hope that you feel as good as we do.

Marcus A. Lemonis: When you see market share growth, when you see us hitting our other goals around Good Sam, when you see us hitting our internal customer payment work, when you see the F&I results, we hope that you feel as good as we do about those results.

Speaker Change: Do about those results.

Marcus A. Lemonis: I couldn't be more proud, too, of how we managed through this used portfolio. And that was perhaps the biggest variable that threw a wrench into some of our plans in the short term.

Speaker Change: I couldnt be more proud too of how we manage through the used portfolio and that was perhaps the biggest variable that throw a wrench into some of our plans in the short term were being down on 60 to the tune of 60% of use procurement through the first four months of the year with something that wasn't necessarily in our calculus. We believe that it was the right play for our company for our investors knowing how.

Matthew D. Wagner: We're being down to the tune of 60% of used procurement through the first four months of the year with something that wasn't necessarily in our calculus. We believe that it was the right play for our company, for investors, knowing how risk averse we were in a relatively volatile segment in that short term while there was, for the first time ever in our history as an industry, deflation of new invoice prices. Now that that market has stabilized on the new side, that's directly impacting the used, which gives us a clear focus and a clear path whereby we can start to ramp up procurement.

Matthew D. Wagner: We were down to the tune of 60% of used procurement through the first four months of the year on something that wasn't necessarily in our calculus. But we believe that it was the right play for our company, for investors, knowing how risk averse we were in a relatively volatile segment in the short term while there was, for the first time ever in our history as an industry, deflation of new invoice prices. Now that that market has stabilized on the new side, that's directly impacting the used side, which gives us a clear focus and a clear path whereby we can start to ramp up procurement.

Speaker Change: Risk averse, we were in a relatively volatile segment in that short term, while there was for the first time ever in our history as an industry deflation of new invoice prices now that that market has stabilized on the new side, that's directly impacting the us which gives us a clear focus and a clear path whereby we could start to ramp up procurement.

Matthew D. Wagner: But as Marcus said earlier, it's going to take us until about mid-May for us to really get this machine revved up again and to start to target those segments' price points that we know are going to yield the highest return on investment. And it isn't because the machine isn't ready to rev. It's because he and I kind of wake up every morning and we're like, "Are we there yet?"

Speaker Change: But as Mark said earlier, it's going to take us until about mid may for us to really get this machine wrapped up again and to start to target those segments price points that we know are going to yield the highest return on investment and it isn't because the machine isn't ready to Rev. It's because of him and I kind of wake up every morning, and we're like are we there yet should we just wait a little bit less tested in this.

Matthew D. Wagner: Should we just wait a little bit? Let's test it in this market. And Matt has been an absolute genius in setting up this auction idea. And we're excited.

Speaker Change: Market and Matt is been the absolute.

Speaker Change: A genius and setting up this auction idea and we're excited we'll be glad to post the link on maybe even our investor site just to show people. What this auction process is looking at we've had both in person and virtual auctions and we were just in the early stages of testing. It we only ran 500 units plus or minus through the.

Marcus A. Lemonis: We'll be glad to post a link on, maybe even our investor site just to show people what this auction process is looking like. We've had both in-person and virtual auctions. And we were just in the early stages of testing it. We only ran 500 units, plus or minus, through the auction process. We had dealers and consumers around the country flying to places to see them. There is no market maker for the RV industry.

Speaker Change: Auction process, we had dealers consumers around the country flying to places to see it there is no market maker for the RV industry and we believe for the growth of our new business, because we need to be able to take in a creative blend of trades for the growth of our used business, we have two firm ourselves.

Marcus A. Lemonis: And we believe for the growth of our new business, because we need to be able to take in a creative blend of trades for the growth of our used business, we have to firm ourselves up between our Good Sam RV Valuator and our CW auctions. We now believe we will become the market maker for establishing used values. When you control 20 plus percent of the new side, and you control the largest portion of the used side, and you can create a market through this open, independent process, you now start to establish yourself as the authority. And that is really the investment that we made. We spent about $7 million launching the auction process in the first quarter.

Operator: Thank you. Very helpful.

Michael Arlington Swartz: Thank you. Our next question is from the line of Mike Swartz with Truist Securities. Please go ahead.

Speaker Change: Between our good Sam RV evaluated and our CW auctions. We now believe we will become the market maker on establishing use values. When you control 20 plus percent of the new side and you control the largest portion of the used side and you can create a market through this.

Speaker Change: Open independent process, you know start to establish yourself as the authority and that is really the investment that we spent we spent about $7 million launching the auction process in the first quarter, we know that that $7 million is a very very small price to pay to become the market maker in the industry.

Speaker Change: <unk>.

Speaker Change: Thank you very helpful.

Speaker Change: Thank you. Our next question is from the line of Mike Swartz with <unk> Securities. Please go ahead.

Marcus A. Lemonis: Hey, guys, good morning. Marcus, just wanted to follow up on the CW auction business. I guess, just curious, what spurred that decision? And maybe, you know, within that, how much of an investment are you making? I think you said 7 million in the first quarter. But if we think about that, just on an annualized basis, how much are you planning to spend there? And then, I guess, what are the economics like within that business as it pertains to camping?

Michael Arlington Swartz: Hey, Hey, guys. Good morning, Mark I, just wanted to follow up on the on the CW auction business I guess, just just curious of what spurred that decision and maybe within that.

Michael Arlington Swartz: How much of an investment are you, making I think you said 7 million in the first quarter, but if we think about that just on an annualized basis. How much are you planning to spend there and then what are the I guess, what do the economics look like within that business as it pertains to camping world.

Matthew D. Wagner: So, Mike, let me take a step back. And the impetus behind auctions was to enable us to procure more used assets, in some respects, sight unseen. When I say, like, virtual, we could take pictures, we could basically explore the assets, but we had no idea what they actually smelled like. There were some finer details that required someone actually to go out there and inspect the assets. We could never quite figure out a way whereby we could buy more assets sight unseen but offloaded in case we made a slight mistake.

Speaker Change: Mike Let me take a step back and the impetus behind auctions was to enable us to procure more used asset in some respect sight unseen when I say like virtual we could take pictures, we get basically explore the asset, but we had no idea of what it actually smelled like if there are some finer tooth details that requires someone actually to go out there and inspect the app.

Matthew D. Wagner: And really, that's representative of an efficient marketplace in a free enterprise environment within the used side of the business, which has never existed before. So we have largely been a bit timid, from a centralized perspective, to buy too much because we didn't want to make too many mistakes. The auction concept really sprung out of that, and that's why we've been working diligently for the past couple of years to figure out, okay, how do we centralize more function of use procurement, while at the same time knowing that if we step into something and unfortunately make a mistake here or there, or if we want to just allow more assets to be run through the market to procure more information, and actually start to set more accurate market based supply pricing of all the used marketplace, we knew that the auctions needed to take form.

Speaker Change: We could never quite figure out a way whereby we could buy more assets sight unseen, but offloaded in case, we made a slight mistake and really that's representative of an efficient marketplace in a free enterprise environment within the us side of the business, which is never existed. So we have largely been a bit timid from a centralized perspective.

Michael Arlington Swartz: You buy too much because we didn't want to make too many mistakes the auction concept really sprung out of that and that's why we have been working diligently for the past couple of years to figure out okay. How do we centralize more function of use procurement while at the same time, knowing that if we step into something unfortunately make mistake here or there or if we want to just allow more.

Michael Arlington Swartz: Our assets to be run through the market to procure more information and actually start to set more accurate market days supply pricing of all the used marketplace. We knew that the auctions needed to take form through this process. We've learned a tremendous amount and then a lot of ways. We've had to build the market and prime the pump for this marketplace, which is why these are larger.

Matthew D. Wagner: Through this process, we've learned a tremendous amount, and in a lot of ways, we've had to build the market and prime the pump for this marketplace, which is why these are largely just upfront, one-time costs, and we referenced with the $7 million, this is not going to be an annualized expense, rather, we view this as a business that we're building. When we realized how much bigger this business could be, then more than we even imagined at first, given that wholesalers, banks, different manufacturers, consumers alike have all started to raise their hand and participate, yesterday, for example, we held our first ever virtual auction. What I mean by that is it was literally entirely online.

Matthew D. Wagner: Through this process, we've learned a tremendous amount, and in a lot of ways, we've had to build the market and prime the pump for this marketplace, which is why these are largely just upfront, one-time costs. As we mentioned with the $7 million, this is not going to be an annualized expense. Instead, we view this as a business that we're building. When we realized how much bigger this business could be, then more than we even imagined at first, given that wholesalers, banks, different manufacturers, and consumers alike have all started to raise their hands and participate. Yesterday, for example, we held our first ever virtual auction. What I mean by that is it was literally entirely online.

Michael Arlington Swartz: Upfront one time cost that we referenced with the $7 million. This is not going to be an annualized expense rather we view this as a business that we're building and we've realized how much bigger this business can be then more than we even imagined at first given that wholesalers banks different manufacturers consumers alike have all started to raise their hand and participate yeah.

Michael Arlington Swartz: Yesterday for example, we held our first ever virtual auction and what I mean by that is it was literally entirely online. We ran just 35 through the chute, we're able to sell 31, and these consumers and our wholesalers and our banks whomever was bidding literally not even see these assets. This is the first time they are bidding on them and for us to successfully sell through.

Matthew D. Wagner: We ran just 35 through the shoot, and we were able to sell 31, and these consumers and or wholesalers and or banks, whomever was bidding, literally did not even see these ads. This was the first time they'd ever been bidding on them. And for us to successfully sell through that many tells us that, wow, we could actually improve this velocity of sales even more. Furthermore, as Marcus referenced earlier, when we think about the opportunity for trade-ins that are coming in, we think that we could open up all these trades, whether we want to retail them, we could do that, as we always do, and that's just our normal course of business.

Michael Arlington Swartz: That many tells us that while we could actually improve this philosophy of sale to an even greater extent.

Michael Arlington Swartz: Furthermore, as Marcus referenced earlier, when we think about the opportunity on trade ins that are coming in we think that we could open up all these trades, whether we want a retailer we can do that as we always do and Thats just a normal course of business or if we need to get a wholesaler bid. We think we can get more real time feedback quicker to turn around and make a quick buck.

Matthew D. Wagner: Or if we need to get a wholesaler bid, we think we can get more real-time feedback quicker to turn around and make a quick buck. Where today we're wholesaling about 8,000 units on an annualized basis, I believe we can pull down at least another couple hundred dollars of front-end gross profit, never mind the fact, too, that we're going to start to be able to run different bank repos, as well as different wholesalers that want to list their own assets.

Michael Arlington Swartz: Today, we're wholesaling about 8000 units on an annualized basis I believe we can pull down at least another couple of hundred dollars. A front end gross profit never mind. The fact too that we're going to start to be able to run different bank repos as well as different wholesalers I want to list their own assets off of that concept we've taken.

Matthew D. Wagner: On top of that concept, we've taken a page out of the larger Auction House's book where we'll be able to charge sellers and buyers fees on both sides of the transactions. And as this thing starts to expand, we'll have an auction at least every other week, beginning this month, somewhere in the country. Be it a virtual auction or an in-person auction where we see a lot of consumers looking to participate. I'm super excited for the back side of this, of how this becomes a true revenue stream and profitable for our business. One thing to keep in mind.

Michael Arlington Swartz: Page out of the larger auction houses books, where we will be able to charge sellers and buyers fees on both sides of the transactions and as this thing starts to expand we will have an auction at least every other week beginning of this month somewhere in the country be it a virtual auction and in person auction, where we see a lot of consumers looking to participate.

Michael Arlington Swartz: I'm Super excited for this on the backside of this of how this becomes a true revenue stream and profitable for our business one thing to keep in mind. It is acting independent of our dealership operations. So that we truly believe that the values are not contaminated by any influence other than whatever the free market provides and when we run our own units.

Marcus A. Lemonis: One thing to keep in mind is acting independent of our dealership operations so that we truly believe that values are not contaminated by any influence other than whatever the free market provides. And when we run our own units, we adhere to that free market principle. And so when you look at the losses, some of those were us taking some of those losses through the auction. Some of it was the cost to stand it up. But just to reiterate, it is not 7 million on an annualized basis multiplied times three more quarters of that. You should not expect that at all.

Michael Arlington Swartz: We adhere to that free market principle, and so when you look at the losses. Some of those were us taking some of those losses through the auction. Some of it was the cost to stand it up but just to reiterate it is not $7 million on an annualized multiplied times three more quarters of that we you should not expect that at all.

Michael Arlington Swartz: We feel like we've gotten it down to a bit of a science, and we've taken kind of the big steps that we needed to to launch it.

Michael Arlington Swartz: We feel like we've gotten it down to a bit of a science and we've taken kind of the big steps that we needed to to launch it.

Marcus A. Lemonis: Okay, that's extremely helpful. I appreciate that.

Speaker Change: Okay. That's extremely helpful. I appreciate that.

Speaker Change: And what are the I guess the second question is just on your expectation for new door additions is always kind of a difficult thing for I think most of us to model just in terms of timing and I think you've given us some framework for how many doors do you expect to open this year, but it sounds like you may have put some of those on hold or delayed some of those just given some of the macro considerations out there but.

Michael Arlington Swartz: I guess the second question is just about your expectation for new door additions. This is always kind of a difficult thing for, I think, most of us to model just in terms of timing. And I think you've given us some framework for how many doors you expect to open this year, but it sounds like you may have put some of those on hold or delayed some of those, just given some of the macro considerations out there. But any way to think about, just from an updated standpoint, how many doors you expect to open this year? Yeah, so we opened 14 already. We did mention that we sold them.

Michael Arlington Swartz: Any way to think about just from an update updated standpoint, how many how many doors you expect to open this year.

Marcus A. Lemonis: We have two more stores that we expect to open internally by year end, potentially three. And then, as always, we're always looking for opportunistic acquisitions. As we look at the landscape of dealers who potentially are sitting with more inventory than they would like to, we're always a great source. We did fall off a number of deals that we had contemplated, and we didn't fall off because of anything internally on our side. We fell off because, through the diligence process, they didn't meet certain standards, and they weren't willing to do the things that we felt were necessary to receive our money, quite frankly.

Marcus A. Lemonis: Yeah, so we opened 14 already. We did mention that we sold one location. We actually sold that location, I think, for around $3 million. It was much more than we had in that transaction, so we netted out at 13.

Speaker Change: Yeah. So we opened 14 already we did mentioned that we sold one location, we actually saw that location I think for around $3 million. It was much more than we had in that transaction. So we netted to 13, we have two more stores that we expect to open internally by year end potentially three and then as always.

Michael Arlington Swartz: We're always looking for opportunistic acquisitions as we look at the landscape of dealers, who are potentially are sitting with more inventory than they would like to were always a great source. We did fall off a number of deals that we had contemplated and we didn't fall off because of anything internally on our side we.

Michael Arlington Swartz: Fell off because through the diligence process, they didn't meet certain standards and they weren't willing to do the things that we felt were necessary to receive our money quite frankly, we are not in the business of just adding doors. We are in the business of being accretive and our acquisitions, which means I'm not going to pay much and we expect.

Marcus A. Lemonis: We are not in the business of just adding doors. We are in the business of being acquisitive in our acquisitions, which means I'm not going to pay much, and we expect to get a lot out of it, and anything absent of that, we're not interested. So I would expect that we'll have no less than 17, potentially one or two more than that. But we could turn around in the fourth quarter and see a deluge of opportunities and capitalize on four, five, or six of them. We're not going to do anything that's going to hurt our own business or put our own balance sheet at risk or put our own human capital at risk for anybody or anything.

Michael Arlington Swartz: To get a lot out of it and.

Michael Arlington Swartz: And anything absent of that we're not interested in.

Michael Arlington Swartz: So we I would expect it will have no less than 17, potentially you know one or two more than that but we can turn around in the fourth quarter and see a deluge of opportunities and capitalize on 456 of them.

Michael Arlington Swartz: We're not going to do anything that's going to flex our own business or put our own balance sheet at risk or put our own human capital at risk for anybody or anything.

Operator: Okay, great. Thanks, Marcus. Thank you. Our next question is from the line of Bret Jordan with Jeffries. Please go ahead.

Speaker Change: Okay, great. Thank you Marcus.

Speaker Change: Thank you.

Speaker Change: Next question is from the line of Bret Jordan with Jefferies. Please go ahead.

Bret David Jordan: Hey, good morning, guys. Good morning. I'm a good Sam, you know.

Bret David Jordan: Hey, good morning, guys.

Bret David Jordan: Good morning.

Bret David Jordan: The good Sam.

Bret David Jordan: Continuing to explore alternatives comment I guess it sounds like you're also.

Bret David Jordan: Simultaneously expanding the business into things like Marina.

Michael Arlington Swartz: Should we expect that that's going to sort of push back.

Michael Arlington Swartz: The alternatives that you are pursuing there as you develop more of the in house strategy.

Marcus A. Lemonis: No, I think what happened was, you know, when we talked about this internally, before we disclosed it to the market, we have a unique relationship inside of our company between our Camping World management team and our Good Sam management team, and Matt and I are always put in the middle of that, like two parents. And the Good Sam team wants to do certain things, and the dealership team wants to ensure that they're not being compromised, and we kind of just put everybody in their own corner and said, look, you're chartered, and you're incentivized financially to run your business.

Speaker Change: No I think what happened was you know when we when we talked about this internally before we disclose it to the market.

Speaker Change: We have a unique relationship inside of our company between our camping World management team and our good Sam management team and Matt and I are always put in the middle of that like to parents and the good Sam team wants to do certain things in the dealership team wants to ensure that theyre not being compromised and we kind of just put everybody in their own corner and said look your chartered in your incentive.

Speaker Change: <unk> financially to run your business and the response from the good Sam team as well Great. Let me go run my business I understand that you're not in the boat dealership business, but that doesn't mean that I can't go explore the recreational landscape. We have the policies. We have that the process. We have the relationships with the vendors. So we have given Matt and I have given <unk>.

Marcus A. Lemonis: And the response from the Good Sam team was, well, great, let me go run my business. I understand that you're not in the boat dealership business, but that doesn't mean that I can't go explore the recreational landscape.

Marcus A. Lemonis: We have the policies, we have the process, we have the relationships with the vendors. So we have given, Matt and I have given permission to the Good Sam team to grow their business in ways that they believe are going to be financially accretive to the business. And if they choose to get into the boat warranty space, which they're getting into, or the power sports space, which they're getting into, it really is none of Camping World dealership's business. And I think historically, we tried to keep everybody happy, and we were probably holding that business back a little bit. Now, that's a long maturation process.

Marcus A. Lemonis: We have the policies, we have the process, we have the relationships with the vendors. So Matt and I have given permission to the Good Sam team to grow their business in ways that they believe are going to be financially accretive to the business. And if they choose to get into the boat warranty space, which they're getting into, or the power sports space, which they're getting into, it really is none of Camping World's business. And I think historically, we tried to keep everybody happy, and we were probably holding that business back a little bit. Now, that's a long maturation process.

Speaker Change: <unk> to the good Sam team to grow their business in ways that they believe are going to be financially accretive to the business and if they choose to get into the boat warranty space, which they are getting into or the power sports space, which they are getting into it really is none of camping world dealership business and I think historically we've.

Speaker Change: Tried to keep everybody happy and we were probably holding that business back a little bit now that's a long maturation process, but while that's happening we will continue to explore ideas and as everybody knows I was very matter of fact in the first quarter that I have a certain perspective on what I think the value of that business is it's a 100.

Marcus A. Lemonis: But while that's happening... We'll continue to explore ideas, and as everybody knows, I was very matter-of-fact in the first quarter about what I think the value of that business is. It's a $100 million contribution in 2023, and I don't believe that the market properly recognizes the value of that business. I put a marker out there, and shockingly enough, the inbound activity that Goldman received from that statement that we made was surprising and pleasing.

Speaker Change: <unk> million dollars of contribution in 2023, and I don't believe that the market properly recognizes the value of that business I'd put a marker out there and shockingly enough. The inbound activity that Goldman received from that that statement that we made was surprising in policing at the same.

Marcus A. Lemonis: At the same time that we explore those ideas, the board wants to understand how does that work with the database, what happens with a variety of questions, and we will get the board all of those answers over the next several months. But it doesn't mean that good SAM management team has to wait to pursue their initiatives, to pursue their path at the same time. So we see those as parallel paths.

Marcus A. Lemonis: At the same time that we explore those ideas, the board wants to understand how that works with the database, what happens with a variety of questions, and we will get the board all of those answers over the next several months. But it doesn't mean that a good SAM management team has to wait to pursue their initiatives, to pursue their path at the same time. So we see those as parallel paths.

Speaker Change: That we explore those ideas the board wants to understand how does that work with the database what happens with a variety of questions and we will get the board all of those answers over the next several months, but it doesn't mean that good Sam management team has to wait to pursue their initiatives to pursue their path at the same time.

Speaker Change: We see those as parallel path. We obviously are focused right now on growing our business and so Goldman is handling that process and if something interesting comes up we will presented to the board will look at all the options, we'll see if it makes sense for the shareholders and we'll make a decision but at this point, we're still exploring it okay. And then you also comment on that.

Marcus A. Lemonis: We obviously are focused right now on growing our business, and so Goldman is handling that process, and if something interesting comes up, we'll present it to the board, we'll look at all the options, we'll see if it makes sense for the shareholders, and we'll make a decision. But at this point, we're still exploring. Okay, and then you also commented on a new aftermarket supplier agreement. Is that changing your strategy around the aftermarket side of the business? And I guess who's the agreement with? Yeah, there's an aft scale.

Speaker Change: Our new aftermarket supplier agreement is that changing your strategy around the aftermarket side of the business and I guess he was the agreement with or is it because of that scale.

Marcus A. Lemonis: Yeah, so we believe, you know, as we look at our retail business, and you know, retail is a dirty word. But as we look at our parts and aftermarket business, which is a foundation of our stores, the Camping World brand, we really thought to ourselves, we have to, we have to kind of reset. We have to reset how we're approaching the market, we have to reset how we're deploying money and inventory, we have to reset our partners.

Speaker Change: Yes, so we believe as we looked at our retail business retail is a dirty word, but as we look at our parts and aftermarket business, which is the foundation of our stores. The camping World brand, we really thought to ourselves we have to we have to kind of a reset.

Speaker Change: We have to reset how we are approaching the market we have to reset how we are deploying money in inventory we have to reset our partners years ago. We made the acquisition of a furniture business. They they were manufacturing furniture, and we were selling it in the aftermarket space successfully and we were selling it directly to Oems, we have a very very.

Marcus A. Lemonis: Years ago, we made the acquisition of a furniture business, they were manufacturing furniture, and we were selling it in the aftermarket space successfully. And we were selling it directly to OEMs. We have a very, very good relationship with Lipper, which is a very dominant force outside of frames in the aftermarket with Furion, with Solero, with Curt Hitches.

Marcus A. Lemonis: Years ago, we made the acquisition of a furniture business; they were manufacturing furniture, and we were selling it in the aftermarket space successfully. And we were selling it directly to OEMs. We have a very, very good relationship with Lipper, which is a very dominant force outside of frames in the aftermarket with Furion, Solero, and Curt Hitches.

Speaker Change: Good relationship with Lipper, which is a very dominant force outside of frames and the aftermarket with Fury on with Solera with Curt hitches and when we look at wanting to minimize our risk in that business and enhance product development product rollout and all of those things.

Marcus A. Lemonis: And when we looked at wanting to minimize our risk in that business and enhance product development, product rollout, and all of those things, we ended up signing a definitive agreement to sell our furniture business to Lipper. As part of that consideration, we entered into, and we are going to enter into a supplier agreement that gives us the proper pricing for giving them the proper amount of business. So we see margin expansion there for us and for them.

Speaker Change: We ended up signing a definitive agreement to sell our furniture business to leopard as part of that consideration, we entered and we're going to enter into a supplier agreement that gives us the proper pricing for giving them the proper amount of business. So we see margin expansion there for us and for them.

Speaker Change: And we have an opportunity to earn additional rebates based on our performance I believe that an acute focus with a small number of suppliers libert being one of them Erik sell being one of them LKQ being one of them is going to put a hyper focus on the product assortment that we have in our stores.

Marcus A. Lemonis: And we have an opportunity to earn additional rebates based on our performance. I believe that an acute focus on a small number of suppliers, Lipper being one of them, Ericssel being one of them, LKQ being one of them, is going to put a hyper focus on the product assortment that we have in our stores. Ultimately, we need better terms in that business, and we need better margin. And we believe that that's going to happen.

Speaker Change: Ultimately, we need better turns in that business and we need better margins and we believe that that's going to happen. We will take an entire reset of our retail business in 2024, we're going to spend around $10 million.

Marcus A. Lemonis: We will take on an entire reset of our retail business in 2024. We're going to spend around $10 million resetting all the stores to one standard. As most people know, we accumulated all 200 stores over 20, 30, 40 years. They have different iterations inside of them based on where we were in our lifecycle. We're going to press the reset button one time.

Speaker Change: Resetting all of the stores to one standard as most people know we accumulated all 200 stores over 2030 40 years, they have different iterations inside of them based on where we were in our lifecycle, we're going to press the reset button. One time, we've now come up with the proper assortment to address.

Marcus A. Lemonis: We've now come up with the proper assortment to address aftermarket parts, repair, replacement, and enhancement. We've nailed down our suppliers to be largely Lippert and secondarily AirXL, with whom we have a great relationship. That's a Thor company, and they use suppliers and distributors like LKQ. That doesn't mean we still won't have the import of our own products for margin improvement, and there are a variety of other vendors that will be there. But we needed to do the same thing on the retail side, and that has given us dominance on the RV sale side.

Speaker Change: Get parts repair replacement and enhancement, we've nailed down our suppliers to be largely lipper secondarily, Eric Sal, which we have a great relationship that's a Thor company and using suppliers and distributors like LKQ that doesn't mean, we still won't have import of our own products for margin improvement and there are a variety of other <unk>.

Speaker Change: Anders will be there, but we needed to do the same thing on the retail side.

Marcus A. Lemonis: And years ago, we used to sell every, And today we hyper focus on the Thor companies. Forest River, and Winnebago. And we're taking that same approach to do business with less people and have it be more meaningful so that the performance would be more meaningful on the bottom line. Great, thank you. Our next question comes from the line of Brandon Rolle with DA Davidson. Please go ahead.

Marcus A. Lemonis: And years ago, we used to sell every kind of RV, and today we hyper-focus on the Thor companies, Forest River, and Winnebago. And we're taking that same approach to do business with fewer people and have it be more meaningful so that the performance would be more meaningful on the bottom line. Great, thank you. Our next question comes from the line of Brandon Rolle with DA Davidson. Please go ahead.

Speaker Change: That has given us the dominance on the RV sales side and years ago, we used to sell everything and today, we hyper focus on the third companies Forest River and Winnebago and we're taking that same approach to do.

Speaker Change: <unk> business with less people and have it be more meaningful so that that performance would be more meaningful on the bottom line.

Speaker Change: Alright, thank you.

Speaker Change: Yeah.

Speaker Change: Thank you.

Operator: Our next question comes from the line of Brandon Rolay with DA Davidson. Please go ahead.

Speaker Change: Next question comes from the line of Brandon Ross with <unk>.

Brandon Ross: D. A davidson. Please go ahead.

Brandon Ross: Thank you for taking my question just piggybacking on the supplier environment right now I think back in <unk>, you had talked about wanting a diversification of sourcing within the industry could you update us on kind of what you've seen over the past six months in terms of maybe new suppliers entering the market and maybe.

Speaker Change: Uh huh.

Speaker Change: Having a say within the model year 'twenty five bidding process.

Brandon Roll: Are you talking about on the aftermarket side or on the RV manufacturing side?

Speaker Change: Are you talking about on the aftermarket side or on the RV manufacturing side on the RV manufacturing side.

Marcus A. Lemonis: You know, Brandon, we continue to work and develop products with Thor Forest River in Winnebago, and I think proof of our effectiveness in doing that is what has resulted in what happened with Coleman. Many, many years ago, Matt and I decided to, I think it was actually maybe 10 years ago, we decided to get into the Coleman licensing business. And we went down to Wichita, Kansas, and we did a deal with Coleman, and we connected Coleman and Thor to us.

Speaker Change: You know, Brian we continue to work and develop products with Thor Forest River in Winnebago, and I think proof of our effectiveness in doing that is what has resulted in what's happened with Coleman. Many many years ago, Matt and I decided to I think it was actually maybe 10 years now we decided.

Speaker Change: To get into the Coleman licensing business, and we went down to Wichita, Kansas and we did a deal with Coleman and we connected Coleman and Thor and US together in the first quarter. It appears at least through January and February that Coleman will be the number one selling travel trailer in America period and by the.

Marcus A. Lemonis: In the first quarter, it appears, at least through January and February, that Coleman will be the number one selling travel trailer in America, period. And, by the way, that product is only sold by us. And so our ability to influence the way things are made or the design or the engineering is probably stronger than ever. Not because we have a heavy hand, but because we have a lot of data. And that data is very useful to manufacturers.

Speaker Change: The way that product is only sold by us and so our ability to influence the way things are made or the design or the engineering is probably stronger than ever not because we have a heavy hand, but because we have a lot of data and that data is very useful to manufacturers and whether looking at repair records or whether they're looking at turns are wet.

Marcus A. Lemonis: And whether they're looking at repair records, or whether they're looking at turns, or whether they're looking at ASPs, or whether we're looking at innovation, we do have a significant influence. But that influence over the market isn't something that only we benefit from. In order for our company to meet our goals, which is to be in excess of 10, $12 billion in revenue, we need the TAM of the overall industry to grow.

Speaker Change: Looking at Asps or whether we're looking at innovation, we do have a significant influence but that influence over the market isn't something that only we benefit from.

Marcus A. Lemonis: And the only way the TAM of the overall industry grows is if the industry is healthy, and the way that it becomes healthy is that we use our data to make it available to everybody. Here's what we have; here's what we know. And I think this idea of everything having to be proprietary applies in some cases. But in other cases, if we want the industry to manufacture, ship, and sell 750,000 units, we have to share some of our secret sauce so that the industry as a whole is more successful.

Speaker Change: In order for our company to meet our goals, which is to be in excess of $10 billion to $12 billion of revenue, we need the Tam of the overall industry to grow and the only way the Tam of the overall industry growth is that the industry is healthy and the way that it becomes healthy is that we use our data.

Speaker Change: To make it available to everybody here's what we have here is what we know and I think this idea of everything having to be proprietary in some cases applies but in other cases, if we want the industry to to manufacture and ship and sell 750000 units, we have to share some of our secret sauce.

Marcus A. Lemonis: And whether that's working with Lippert to develop better ways to do hitching, or working with Lippert to do other things, or working with Thor between Eric Sell and Keystone or Jaco to develop more innovative products, or working with Forest River, whatever it may be, we have a duty and an obligation to grow the overall industry because we're primary benefactors of that.

Speaker Change: So that the industry as a whole is more successful and whether that's working with liberate to develop better ways to do hedging or working with lipper to do other things and we're working with Thor between Eric Selle, and Keystone or Jacob to develop more innovative products or working with forest River whatever it may be we have a duty and.

Speaker Change: An obligation to grow the overall our industry because we're primary benefactors of that.

Brandon Roll: Great, thank you.

Speaker Change: Great. Thank you.

Speaker Change: Thank you our next.

Operator: Our next question is from Tristan Thomas Martin with BMO Capital Markets. Please go ahead. Hey, good morning.

Speaker Change: Question is from Christian Thomas Martin with BMO capital markets. Please go ahead.

Speaker Change: Hey, good morning.

Speaker Change: I think last quarter, you said 25 to 30, new dealerships by the end of the year now its 13 or is that just unifying off some deals or did something else change there.

Tristan M. Thomas: No, we didn't say 13. We've already opened 13. As we sit here today, What's that?

Speaker Change: No. We didn't say 13, we've already opened 13 as we sit here today in 17.

Speaker Change: What's that.

Marcus A. Lemonis: As I just said, no less than seven. Yeah, well, you said 13. So we've opened, we've opened 14. Since January 1, we've sold one. So that's a net of 13.

Speaker Change: I know you said no less than 17, Yeah. We you said 13. So we've opened we've opened 14 since January one we sold one so that's a net of 13, we have two to three stores that will more than likely open hopefully by the end of the year and that's before we even open the kimono to look at what.

Marcus A. Lemonis: We have two to three stores that will hopefully open hopefully by the end of the year. And that's before we even open the kimono to look at what acquisitions are out there in the back half. But I'm not going to meet a number by just buying something. We know that deals are brought to us every day and every week. Right now, as we sit here today, in May, June, and July, Matt and I are focused on one thing.

Speaker Change: <unk> are out there in the back half, but I'm not going to I'm not going to meet a number by just buying something we know the deals are brought to us everyday and every week right now as we sit here today in May June and July Matt and I are focused on one thing and that's crushing our same store, new number and growing our market share.

Marcus A. Lemonis: And that's crushing our same store new number and growing our market share. The deals that are out there are going to be out there in the fall and winter, and we believe they're only going to get better. So we're not in a rush to have money leave our vault at a level that we believe we could deploy it later and get better. The goal is always going to be to make acquisitions.

Speaker Change: The deals that are out there are going to be out there in the fall and the winter and we believe they are only going to get better.

Speaker Change: So we're not in a rush to have money leave our vault.

Speaker Change: At a level that we believe we can deploy that later and get better. The goal is always going to be to do acquisitions. That's the blueprint of our company from the beginning of time and whether it ends up being 25% or 35 or 18, it always needs to be smart profitable and accretive.

Marcus A. Lemonis: That's been the blueprint of our company since the beginning of time, and whether it ends up being 25 or 35 or 18, it always needs to be smart, profitable, and acquisitive. Got it. I may have missed this, but how's OEM promotional support in the quarter and then how's that been trending so far in two? We didn't really have that much promotional support in Q1, like we did in Q4 of last year, because we had taken the bulk of our, you know, bath back then. But manufacturers have always been helpful, particularly Thor, Forest River, and Winnebago, in addressing it.

Speaker Change: Got it.

Speaker Change: But that was OEM promotional support in the quarter and then how has that been trending so far into Q.

Speaker Change: We didn't really have that much promotional support in Q1 like we did in Q4 of last year, because we had taken the bulk of our bass back then.

Speaker Change: Manufacturers have always been helpful, particularly solar Forest River in Winnebago have always been helpful. In addressing it we want to always find the balance so and the balances I'm not going to take money, if I need to buy more inventory in exchange for them. We don't want to get hooked on that drug where you have to buy something to get something we want you to help us with the prop.

Marcus A. Lemonis: We want to always find the balance, though, and the balance is, I'm not going to take money if I need to buy more inventory in exchange for it. We don't want to get hooked on that drug where you have to buy something to get something. We want you to help us with the product we bought, and the period needs to be at the end of that sentence. And then we want to make good inventory purchasing decisions that are separated from that. So we did not have much in the quarter at all, Tom.

Speaker Change: We bought and it means that the period needs to be at the end of that sentence and then we want to make good inventory purchasing decisions that are separated from that assistance. So we did not have much in the quarter at all Tom No no not much at all and just as well we'd like to the manufacturers in a healthy position and continuing to maintain and.

Matthew D. Wagner: And just as well, we'd like the manufacturers to be in a healthy position and continue to maintain and innovate their products just as well. So never do we want to take needlessly just any sort of promotional support, knowing that just as well, we can both be profitable together as we pursue certain price point segments, which we've worked very well with, especially the three entities that Marcus has named already, Thor, Foreshore, and Winnebago, to continue to target those segments.

Matthew D. Wagner: And just as well, we

Speaker Change: Innovate their products just as well so never do we want to take needlessly, just any sort of promotional support knowing that just as well we can both be profitable together as we pursue certain price point segments, which we've worked very well with especially the three entities of march's named already thought for sure, but winnebago to continue to target those segments.

Marcus A. Lemonis: One more thing just to point out on top of that, and I think Matt alluded to it, we've also invested, and so have they, in launching some exclusive locations. And we have, I think, how many do we have now total?

Speaker Change: Okay, maybe one thing to make one.

Speaker Change: Yes, one more thing just to point out on top of that and I think Matt alluded to it. We've also invested and so have they in launching some exclusive locations and we have I think how many we have now total we just launched five within this segment are within this periods I think we're up to eight now yeah. So the exclusive locations that we've launched and weather.

Marcus A. Lemonis: We've just launched five within this segment, or within this period, so I think we're up to eight now? Yeah. So the exclusive locations that we've launched, and whether that's...

Marcus A. Lemonis: The exclusive locations that we've launched, whether that's Grand Design of Green Bay or Keystone of Northern Michigan or whatever it may be, are performing really nicely. And I think we're learning that the future growth of this business, in addition to Camping World stores, we may have cracked the code on a way to have incremental store growth and incremental acquisitions with a lower cost of capital deployed to do those deals. Not building out big retail stores, they're not on 20 acres, they don't take on big rent factors, so the true ROAS on those is pretty good. I mean, the return on investment has been pretty spectacular in those areas, and I would expect us to continue to double down on those.

Speaker Change: That's grand design of Green Bay, or a Keystone of northern Michigan or whatever it may be are performing really nicely and I think we're learning that the future growth of this business. In addition to camping World stores. We may have cracked the code on a way to have incremental store growth and incremental acquisitions with a.

Speaker Change: Lower cost of capital deployed to do those deals now.

Speaker Change: Building out big retail stores that are not on 20 acres. They don't take on big rent factors. So the true ROE as on those is pretty good I mean, the return on investment.

Speaker Change: Has been pretty spectacular in those areas and I would expect us to continue to double down on those the manufacturers are spending some money on that so when you talk about assistance.

Operator: The manufacturers are spending some money on that. So when you talk about assistance, assistance from manufacturers can come in the form of training, which they've all been amazing at, investing in parts and service systems, which they've all been doing, investing in aging processes, which they've all been doing, and investing in this exclusive store concept. We couldn't be happier with the partnerships and the participation that the three core manufacturers have provided not only for our company but, we believe, for the other dealers as well. Thank you. Our next question is from the line of Alice Wycklendt with Baird. Please go ahead.

Speaker Change: Instance for manufacturers can come in the form of training, which they've all been amazing investing in parts and service systems, which they've all been doing investing in aging processes, which they've all been doing and investing in this exclusive score store concept, we couldnt be happier with the partnerships and the participation that the three core manufacturers.

Speaker Change: Have provided not only our company, but we believe the other the other dealers as well.

Speaker Change: Okay. Thank you.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Our next question is from the line of Alice Vigilant with Baird. Please go ahead.

Alice Linn Wycklendt: Hi, guys on for Craig This morning.

Alice Linn Wycklendt: For all the commentary so far I think just one question I wanted to dig in on the new margin side I mean, I think the gross profit dollars came in around 6400 per unit gross margin percentage just under 14%.

Alice Linn Wycklendt: There may be werent any significant transitory factors from Oems support in the quarter, but how should we think about that number through the balance of the year.

Thomas E. Kirn: Oh, I think that this is largely indicative of what we normally see in the first quarter of most years, if you look at pre-pandemic margin levels. So I would suggest then that for the next two quarters, they probably could bump up around that 15% range, if not a little bit higher, depending upon what that general mix is of inventory. And then generally, the fourth quarter kind of settles in once again, you know, a little bit lower, but perhaps like 14 and a half percent, give or take.

Speaker Change: Glenn I think this is largely indicative of what we normally see in the first quarter of most years. If you look at pre pandemic margin levels. So I would suggest then that for the next two quarters, probably could bump up around that 15% range, if not a little bit higher depending upon what that general mixed use of inventory and then generally in the fourth quarter.

Speaker Change: Kind of settles in once again, a little bit lower but perhaps like 14, 5% give or take and so to your point out there was no manufacturer assistance, putting that number at 14 that was true performance.

Marcus A. Lemonis: So, to your point, Alice, there was no manufacturer assistance putting that number at 14. That was true performance.

Marcus A. Lemonis: I'm hoping, and I think Matt and I are definitely on the same page about this, as we work through the last 3,800 23s and we sort of shrink that down, that is really what could prop it up to 15. I think 15 is probably a good number for Q2 and Q3. We obviously still want to take care of the customer, but we still want to actually grow market share. And then, as you get back into the fourth quarter, it's going to fall back down again because we want to clean out inventory going into the end of the year.

Speaker Change: I'm, hoping and I think Matt and I are definitely on the same page about this as we worked through the last 30, 820, threes and we sort of shrink that down that that that is really what could proppant up to 15. I think 15 is probably a good number for Q2 and Q3, we obviously still wanted to take care of the customer we still.

Speaker Change: Wanted to actually grow market share and then as you get back into the fourth quarter, it's going to fall back down again, because we want to clean inventory going into the end of the year things are a little quieter you have to incentivize the customer a little bit more but we're we're feeling good about where our new margins are we always want to have more one of the downsides.

Marcus A. Lemonis: Things are a little quieter, and you have to incentivize the customer a little bit more, but we're feeling good about where our new margins are. We always want to have more. One of the downsides of driving ASPs down is even though you open up the dam and you find more people, the total gross profit dollars on the front end when you lower ASPs, even when margins are good, are a little lower. So hopefully, over time, as interest rates come back down and affordability becomes a little easier, those ASPs could start to rise by 1,000 here, 1,000 there and get us back to where we think they really should be, which is right around $39,000 to $40,000.

Marcus A. Lemonis: Driving asps down as even though you open up the dam and you find more people. The total gross profit dollars on the front end when you lower asps, even when margins are good they're a little lower so hopefully over time as interest rates come back down and affordability becomes a little easier those asps can start to.

Speaker Change: There is a thousand here 1000, there and get us back to where we think it really should be which is right around that 39% to $40000 range.

Speaker Change: Perfect. Thanks for the color.

Speaker Change: Thank you.

Operator: Ladies and gentlemen, this concludes our question and answer session. I would now hand the conference over to Marcus Lemonis for his closing comments.

Marcus A. Lemonis: Ladies and gentlemen, this concludes our question and answer session I would now have the conference over to Marcus I'm honest for his closing comments.

Marcus A. Lemonis: Great. Thank you so much for joining the call. As we continue to deal with the headwinds, we want the market to understand that we are very disciplined about our balance sheet. We're very focused on delivering on the results, and we thank you for your support. So, we'll see you on the next call. Take care.

Marcus A. Lemonis: Great. Thank you so much for joining the call as we continue to deal with the headwinds we want the market to understand that we are very disciplined about our balance sheet, we're very focused on delivering on the results and.

Marcus: We thank you for your support so we will see on the next call take care.

Operator: Thank you. The conference of Camping World Holdings Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.

Speaker Change: Thank you.

Speaker Change: Contents of camping World Holdings, Inc. Has now concluded. Thank you for your participation you may now disconnect your lines.

Speaker Change: [music].

Speaker Change: Oh.

Speaker Change: [music].

Speaker Change: Hum.

Operator: Yeah.

Q1 2024 Camping World Holdings Inc Earnings Call

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