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01/09 22:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company demonstrated strong financial performance with a 40% growth in EBITDA and improved SG&A efficiency. The focus on the used RV market, which is performing well, and strategic investments in AI and operational efficiencies position the company for future growth. Despite some macroeconomic uncertainties, the management's strategy and the potential for M&A activity provide a positive outlook. The Q&A section highlighted a conservative yet optimistic approach, with management addressing concerns and focusing on growth drivers. Overall, the sentiment is positive with a focus on long-term profitability.
Revenue $1.8 billion, an increase of 5% year-over-year, driven by unit volume increases in used RVs exceeding 30%.
New ASPs (Average Selling Prices) Just under $38,000, a decline of roughly 9% year-over-year, attributed to a richer mix in the quarter which slightly impacted gross margin percentages.
Adjusted EBITDA $95.7 million, a growth of over 40% compared to $67.5 million last year, driven by improved SG&A as a percentage of gross profit and sequential improvement in new ASPs.
SG&A as a Percentage of Gross Profit Improved by 360 basis points year-over-year, reflecting run rate savings and sequential improvement in new ASPs.
Cash on Balance Sheet $230 million, reflecting stronger unit sales per rooftop and improved fixed cost leverage.
Used Inventory Owned Outright $427 million, showcasing the company's investment in used RVs.
Parts Inventory $173 million, indicating stable inventory levels for parts.
Real Estate Without Associated Mortgage Nearly $260 million, highlighting the company's asset strength.
Exclusive Products: Developing exclusive products tailored to consumer preferences and desired monthly payments, suggesting potential upside in the new RV market.
Used RV Sales: Unit volume increases in used RVs exceeded 30%, with scalability built into the used RV supply chain. Model year 2026 prices positively impact the used industry outlook.
Dealership Acquisitions: Significant white space in the North American RV market with a pipeline of dealership acquisition activity being pursued.
Cost Structure Improvements: $15 million of additional cost takeout opportunities identified through marketing technology, launch of 2 additional CRMs, and implementation of agentic AI.
SG&A Efficiency: SG&A as a percentage of gross profit improved by 360 basis points year-over-year.
Net Leverage Reduction: Net leverage reduced by nearly 3 turns since the beginning of the year through debt paydown, earnings improvement, and cash generation.
Conservative Forecasting: Adopting a conservative approach to 2026 outlook with an adjusted EBITDA floor of $310 million, excluding several potential upsides.
Focus on Core Businesses: Used RV sales, Good Sam, and service businesses remain the bedrock of the company, targeting a mid-cycle adjusted EBITDA of $500 million.
Consumer Sentiment and Labor Market Unevenness: The company anticipates entering 2026 with uneven consumer sentiment and labor markets, which could impact demand and overall business performance.
OEM New Pricing Increases: Rising prices for new RV models could lead to resistance from consumers, potentially affecting new RV sales.
Conservative Cash Flow Expectations: The company is setting conservative cash flow expectations for 2026, which may indicate potential challenges in achieving higher financial performance.
Dependence on Used RV Sales: The company relies heavily on used RV sales as a differentiator, which could pose a risk if the used RV market underperforms.
Dealership Acquisition Uncertainty: While there is potential for growth through dealership acquisitions, no M&A activity is currently embedded in the company's preliminary models, creating uncertainty in this area.
New Unit Trends Impacting Q4 2025: The company expects impacts from new unit trends in the fourth quarter of 2025, which could affect financial performance.
Lapping of Prior Year Benefits: The company will be lapping benefits from Good Sam loyalty breakage and F&I actuarial benefits experienced in Q4 of the previous year, which could create a challenging comparison for financial results.
Consumer Sentiment and Market Conditions: The company anticipates entering 2026 with uneven consumer sentiment and labor markets, alongside rising OEM new pricing for like-for-like models. Despite resistance in the new RV market, the company expects another record year of combined new and used unit volume growth.
Earnings and Leverage: The company projects consecutive earnings growth in 2026 with an adjusted EBITDA floor of $310 million. This projection excludes potential upside from cost reductions, used unit sales, M&A activity, and conservative new unit forecasts. The company aims to further reduce net leverage through earnings growth and operational efficiency.
Cost Structure and Efficiency: The company identifies $15 million in additional cost reduction opportunities for 2026 through marketing technology, CRM launches, and AI implementation. These savings are not included in the preliminary models.
Used RV Sales: The company is optimistic about its used RV supply chain and expects high-single-digit growth in this segment. For every 1,000 additional used units sold, the company anticipates $6 million in adjusted EBITDA.
Dealership Acquisitions: The company sees significant potential in dealership acquisitions within the North American RV market. However, no M&A activity is currently included in the preliminary 2026 models.
New RV Market: The company is conservatively modeling the new RV market due to OEM price increases but expects potential upside from exclusive products tailored to consumer preferences and affordability.
Long-Term Objectives: The company aims to achieve a mid-cycle adjusted EBITDA target of $500 million based on its current store base, with a focus on used RV sales, Good Sam, and service businesses as core drivers.
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The company demonstrated strong financial performance with a 40% growth in EBITDA and improved SG&A efficiency. The focus on the used RV market, which is performing well, and strategic investments in AI and operational efficiencies position the company for future growth. Despite some macroeconomic uncertainties, the management's strategy and the potential for M&A activity provide a positive outlook. The Q&A section highlighted a conservative yet optimistic approach, with management addressing concerns and focusing on growth drivers. Overall, the sentiment is positive with a focus on long-term profitability.
The earnings call highlights strong financial performance with a 9% revenue increase and significant EBITDA growth. The company is effectively managing ASP pressures and maintaining strong margins. SG&A improvements and debt reduction strengthen financial health. Positive projections for new and used units, alongside strategic growth in parts, service, and F&I, indicate a favorable outlook. Despite some management vagueness in the Q&A, the overall sentiment is positive, supporting a stock price increase in the short term.
The earnings call reveals strong financial performance with a 4% revenue increase and nearly 4x EBITDA growth. The company shows effective cost management and strategic growth plans, including a significant SG&A reduction and robust used vehicle procurement. Despite some ASP softness and competitive pressures, the outlook remains optimistic with no major concerns from analysts in the Q&A. The share repurchase program and resilient cash position further support a positive sentiment. Overall, these factors suggest a likely positive stock price movement over the next two weeks.
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