Camping World Holdings reported strong third quarter sales on Tuesday, however, CEO Marcus Lemonis said manufacturers and dealers must stay disciplined to face the coming economic downturn.
Lemonis said Camping World is stocking about 182 units per location, down compared with a third-quarter historical average of 208 units from 2016 through 2019.
September volume dipped from July and August levels but rebounded in October.
“There was an excess supply of new inventory in the channel that was evidenced by our current same-store sale unit stocking decline over historical levels. We do not think we are going to see that level of pressure,” Lemonis said. “We are going to see pressure compared to what we have seen in the last 12 months. I think the manufacturers probably because we started to call this out last February, they started to pull back on their production and we do not believe that there is a heavy glut of inventory in the channel today.”
He recommended manufacturers and dealers stay disciplined the next six to seven months.
“There are headwinds that are coming at us at a pretty rapid pace,” Lemonis said. “The only way profitability maintains itself at a level that we wanted to is very tight inventory control, both on the buy side and the sell side … and a very robust focus on used.”
Dealers and manufacturers displayed a discipline level Lemonis said he has not witnessed in over two decades in the RV business. Still, he said dealers without a digital strategy cannot compete.
“They do not have the database and they are not going to be able to enjoy it,” Lemonis said. “It is possible, that in certain pockets, in certain markets, dealers may become far more undisciplined about their own pricing strategy.”
Camping World projects 2023 shipments could be as low as 360,000, which would be the lowest industry level since 2014. Despite the potential downside, Lemonis said the market will continue to grow and the drop is due to a pause in new consumers entering the RV market.
“For 40 years, the installed base of our RVs has always gone up,” he said. “There are certain years where it goes up more than others. But for 40 years, it has always gone up. And our company, the reason we believe it is special, is because it largely focuses on that installed base.”
