Camping World Holdings Inc (CWH) 2025 Q4 法說會逐字稿

Good morning and welcome to the Camping World Holdings conference call to discuss financial results for the fourth quarter and year ended December 30, 2025. (Operator Instructions) Please be advised that this call is being recorded and the reproduction of this call in whole or in part is not permitted without the written authorization from the company.

Joining on the call today are Matthew Wagner, Chief Executive Officer and President; Tom Kirn, Chief Financial Officer; Lindsey Christien, Chief Administrative and Legal Officer; and Brett Andress, Senior Vice President in Investor relations.

I will now turn the call over to Ms. Christien to get us started.

Thank you and good morning, everyone. A press release covering the company's fourth quarter and the year ended December 31, 2025. 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 1,995. These remarks may include statements regarding macroeconomic, industry, and customer trends, business plans and goals, future reductions in SG&A, future growth of operations, future deleveraging activities. Inventory management objectives, investments in customer experience, future capital allocation, and future 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 in our Form 10-K or Form 10-Q, 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.

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 2025 fourth quarter and full year results are made against the 2024 fourth quarter and full year results unless otherwise noted.

I'll now turn the call over to Matt.

Thank you, Lindsey. Good morning and thank you for joining our full year 2025 earnings call. I am proud to report that our team made significant progress in 2025. We achieved full year adjusted EBITDA growth of over 35%. Our same store unit sales improved over 14%. Good Sam generated record revenue, and the parts, service, and other category experienced a strong improvement in gross margins. This performance demonstrates the strength of our model and the hard work of our team.

In the fourth quarter we saw encouraging signs of momentum with same source sales volume for new and used vehicles increasing by 4% and our combined market share holding firm at 13%. Our 2025 results provide a solid foundation, and we've only just begun to realize our full potential.

Since assuming this position, I've spent considerable time with our teams, our customers, and many of you in the investor community. My message has been simple. We're focused on disciplined execution to drive greater profitability. To that point, the first half of January started strong with short-term trends indicating positive new and used same store sales.

Towards the end of January, weather across the country forced the temporary closure of over 60 of our locations for at least one day. This widespread weather disruption, which persisted through the first week of February, resulted in a year-to-date estimated miss of about 1,500 new and used unit sales, or about $13.5 million of gross profit.

This weather interruption in combination with broader industry performance forced us to reassess our sales expectations and broader industry retail and wholesale shipment expectations. Our execution amid these short-term challenges gives us confidence in our three strategic priorities, grow new (inaudible) use our V sales, create greater SG&A cost efficiency, and accelerate Good Sam's growth.

Let's start with our RV sales. Our strategy to grow new and used RV sales this year is multifaceted, including the expansion of exclusive RV brands, improved efficiency of used RV procurement, partnerships with organizations like Costco, and the acceleration of inventory turnover rates.

Looking beyond the immediate term, we see some significant positive industry catalysts on the horizon. We believe the 4.1 million customers, who purchased new and used RVs during the 2020 to 2022 peak are approaching a manageable equity position in their vehicle.

We anticipate this will create a substantial wave of trade and demand over the next several years. We're taking decisive action in 2026 to cleanse and optimize our inventory portfolio to prepare us for this trade and opportunity.

By improving our inventory turnover rate, we'll increase working capital efficiency with fresher inventory. To put it even more simply, we will do more with less and position ourselves to generate higher revenue and greater earnings power with less inventory. This will require a strict and at times aggressive approach to move through certain aged and non-core RV assets.

While this strategy is essential to reset our foundation and enhance future cash flows, we expect it will create a near term negative impact on our gross profit per unit for both new and used vehicles. This proactive strategy is a key driver behind our outlook for the year.

During our Q3 call, we set a minimum expectation of $310 million in adjusted earnings for 2026. Given our decision to accelerate the cleansing of our inventory, we believe this strategy could negatively impact EBITDA by about $35 million in 2026, particularly in the front half of the year. This leads me to our second priority optimizing SG&A.

In the last couple of months, we've completed about $25 million of annualized expense reductions. A large portion of these savings are expected to offset some of the gross margin impact from the acceleration of our inventory turnover.

We will continue to pursue systems and processes to further centralize our business and remove costs to ensure we hit our targets. Now, let me turn to our final priority, accelerating the growth of Good Sam. For nearly 60 years, Good Sam has been the bedrock of the RV community dedicated to protecting, enabling, and empowering the adventures of every RV enthusiast.

For our company, Good Sam is the cornerstone of our future growth, driving high margins and best in class customer service. We are confident in our ability to execute upon all of these management objectives in 2026.

Last evening we established an adjusted EBITDA range of $275 million to $325 million for the full year 2026. This range encompasses the high and low end of expected industry retail sales, plus it includes the expected impact of inventory corrections and cost savings to prepare this business for the next trading cycle.

Lastly, as a board, we changed our capital allocation strategy to prioritize the long-term health of the balance sheet. As such, we've elected to pause the dividend and retain operating free cash flow to reduce the net debt leverage and keep growth capital within the business.

With that, I'll turn the call over to Tom to discuss the financial results in more detail.

Thanks Matt. For the fourth quarter we recorded revenue of $1.2 billion driven by a 14% increase in used unit volumes, partially offset by a 7% decline in new unit volumes. New ASPs improved from the trends we experienced earlier in the year, and we're only down slightly compared to the fourth quarter of 2024 as we expected.

Vehicle growth margins and GPUs were primarily impacted by the strategic clearing of aged inventory beginning in December. We expect this margin pressure to persist during the first half of 2026. Within Good Sam, the business continued to post positive top-line momentum with services and plans revenue increasing by about 3% in the quarter.

The organization remains positioned for margin improvement in 2026. As we expect to begin to yield returns on several of the significant investments we've made over the last 12 to 18 months. Our Q4 adjusted EBITDA loss of $26.2 million compared to a loss of $2.5 million in Q4 of 2024.

As we think about the drivers of the [Delta] in our fourth quarter results versus our own expectations, the largest was the December hit to vehicle margins as we accelerated the cleansing of our inventory along with dealer insurance product cancellation reserves. Our 2026 guidance calls for adjusted EBITDA in the range of $275 million to $325 million, with just over 50% of the annual adjusted EBITDA expected to occur in the first half of the year.

Lastly, our liquidity position is solid, ending the quarter with $215 million of cash on the balance sheet. In an effort to further fortify the balance sheet, the Board of Directors made the decision to pause the company's quarterly dividend.

Our Up-C structure was designed to require distributions out of the operating company to cover the taxes of our members, including [CWH]. This historically generated excess cash trapped at the public company, which was the primary source of cash for the dividend.

We've reached a point where this pool of trapped cash has been returned to shareholders, and while we could choose to fund the dividend out of incremental distributions from operations, we've elected instead to focus in the near term on net debt deleverage and dry power for growth.

As a step toward improving our net debt leverage, we have already repaid an additional $50 million of long-term debt to date so far in 2026. I'll turn the call back over to Matt.

Thanks, Tom. Before we flip the Q&A, I want to leave you with one final thought. This business is ultimately about bonding people with each other and the outdoors (technical difficulty) RV as the next steward of this company, my goal is to become the most trusted RV company in the world, by providing exceptional customer service and experiences.

It is through this lens that I intend to lead this company through our next phase of growth with the goal of returning meaningful value to our shareholders.

We'll now turn the call over to Q&A.

(Operator Instructions) Craig Kennison, Baird.

Good morning. Thank you for taking my question. Matt, you mentioned, perhaps 1,500 units that were lost as a result of weather. In your experience, would you expect to get these units back as the season unfolds, or do you think they're truly lost?

Craig, that's a debate that we constantly have internally, and the brutal reality is that a large portion of those are oftentimes just lost and then it just gets caught into the jet stream of whatever the annualized outcomes are. But whenever you have an instance like this, it just forces you to change the calculus of what the short-term versus long-term projections are of the business.

And that was a painful, what you could argue is almost about a 17 day stretch of just impact weather impacts that were sprawling across, the Atlantic region all the way over to the Midwest down to Texas and back over to Florida, which when you think of the whole quadrant of the country, that's where we have a pretty tremendous density of dealerships.

And if customers for whatever reason just didn't choose to buy within that period, we do hope that some of them will come back in March. But we certainly aren't banking on that and we're doing everything within our power to continue to solicit more customers to come back in to at least make up for whatever the shortfall was.

Yeah, thanks, Matt, and I sort of as a follow-up, there has been this expectation that tax refund season might provide a lift to the RV demand curve this year. I'm wondering if, I know it's early, but in the last couple of weeks if you've seen. Any improvement in demand that you could tie to that dynamic.

Craig, I think it's still a little too early. I mean, we're looking at the same things, obviously looking at some of the reports you've been putting out weekly just as well, keeping a watchful eye on what these tax refunds are.

We anticipate if we did see any sort of improvement, it'd be probably over the next couple of weeks, or we anticipate, a number of refunds starting to hit the end of February and then starting to accelerate throughout March. So I believe more to come there.

We think in certain cohorts of consumers that could yield a significant benefit for us. I can tell you right now we've been performing very well in certain categories like new fifth wheels and new entry level motorized, but there is some softness admittedly on new travel trailer sales and used travel trailer sales remarkably.

So when we think of the potential benefits of that refund, I think that would enable more of these potential travel trailer consumers to come back into the market, which would then make up for some of that GAAP that exists today.

Joe Altobello, Raymond James.

Thanks, good morning. Matt, you just, you started to do a little bit of this, but maybe if you could, bridge the GAAP between, the low end of your EBITDA guidance of $275 million with the prior floor of $310. I mean, obviously inventory cleansing is the biggest part of that. Then you've had weather, but you also have cost savings, and the Costco relationship, I think, is incremental as well. So maybe kind of walk us through, those steps if you could.

Yeah, very fair question, Joe. So I'll keep it as simple as possible. When we went through that $310 million base case on our Q3 call, there was a number of elements that were contemplated there. Since that time, what has transpired is we removed about $25 million of annualized SG&A savings for our business. So take that $310 million number and now go up to $335 million potential upside.

But we also realized over the last 45 days is we need to start to improve our inventory turnover rate to prepare for what will be the trading cycle, but also just to operate in a healthier environment when we ended the year with about a 1.7 turn on new inventory that wasn't satisfactory for us in a number of different for a number of different reasons. Historically we like to operate at about a 2.2 to 2.4 turn.

And on the use side it wasn't satisfactory for us that was about a 3.1 turn. We'd like to operate typically at about a 3.4 to 3.5 turn. There's a variety of different reasons why you want to accelerate turnover, but as a dealership business, generally your inventory is your greatest risk but also your greatest opportunity for growth.

So in explaining the turnover number I've oftentimes spoken about how inventory is like an ice cube sitting on your lot. With every day that it sits you have different profitability as well as cost a mass, and your profitability starts to melt with each day that passes and it starts to evaporate.

So we know we need to accelerate that inventory turnover and as such that's where you start to take what is that $335 million dollar EBITDA number and you start to reduce that back down to $300 million because we believe that there could be about a $35 million EBITDA hit accelerate by means of accelerating that inventory turnover. This is the right thing for the business though over the long-term, especially in preparation for what will be this trading cycle.

You're correct though, Joe, that we haven't contemplated what truly the upside will be of Costco, if we end up selling upwards of [3,000, 4,000, 5,000] more units as a result of the Costco relationship that would push more towards the outer end. But using that $300 million as a base case, I would say really the biggest inputs for the downside case of [$275 million] versus the upside of $325 million is simply going to be how the new and used industry trends in terms of retail sales.

And we're factoring in right now that our retail expectations for the new side of the business in the industry will be about 325,000 annualized sales to maybe upwards of 350,000 and on the used side of the business we believe that the used retail environment could yield maybe anywhere from 715,000 used (inaudible) sales to upwards of 750,000.

Which there's a wide range of outcomes in there, which is why like we're in such a business where the average sale price on new assets is going to be about $40,000. If there's a $3000 or $4,000 unit difference from the high side to low side, that represents pretty material differences in the earnings expectations.

Very helpful. I appreciate that. Maybe to follow-up on the balance sheet. I think you're at 5.7 times leverage. Could you kind of walk us through where you see that number going by the end of this year and maybe by the end of '27?

Yeah, sure, Joe, I think our goal for this year is to get as far below [4.7] as possible, so that's ultimately our goal for this year and then to set us up to try to get below [4] in 2027 as we continue to improve earnings.

James Hardiman, Citi.

Good morning. Thanks for taking my question. So, I was hoping we could dig a little bit deeper into sort of the the inventory cleansing. That seems to be the focal point of a lot of what we're talking about here, I guess a -- when did we get to a place where sort of the trajectory was just the turnover level that now feels like it's unacceptable?

I think a lot of the commentary in previous quarters were, was that we were in a pretty good inventory place and then how does it play out over the course of the year? I think there were some -- I think the expectation is first half headwind, maybe a tailwind, or at least less of a headwind in the in the second half but maybe walk us through some of the puts and takes.

I'm assuming that ordering activity is going to come down pretty meaningfully and that gross margins are going to be negatively impacted as we, maybe get a little bit more promotional to clear out some of those units. Didn't know if there's an SG&A impact to all of that, but maybe walk us through some of the moving pieces there. Thanks.

Morning James and fair questions all around. Really the simplest way to even answer your first question is this is my inventory philosophy of simply hitting those elevated inventory turnover rates because inventory turnover really is important for three specific reasons.

Number 1, there's carrying costs associated with inventory. Every single day that it sits on a lot, you ultimately are hit with floor plan carrying costs. Number 2, all these inventory assets are depreciable assets. With every day that it sits on our lot, you're going to lose more and more value. And number 3, if you're locking up these assets on your lot, you're ultimately losing some opportunities elsewhere.

So for example, we'd rather have a travel trailer that we're going to sell 6 times a year for $2,000 profit first having a travel trailer that we're only going to sell twice a year for a $5,000 profit we know that we could redeploy that capital over and over again. And that truly starts to quantify bottom line improvement. So for example, our turnover rate to end 2025 on the new side was about 1.7%.

If we're to improve that to about 1.8%, that's an additional $7 million of straight gross profit. We believe that we should be operating on the new side with a turnover rate somewhere in that range of [2.2% to 2.4%] and by the way, that's just historically being healthier there.

So when you think about just philosophically how we'd like to operate moving forward and then also in connection with the reality that there is a massive opportunity that we believe will start to brew in the back half of this year in terms of trade in and we do believe that this will be a longer tail that will continue to materialize with greater and greater magnitude over the ensuing years.

We wanted to make sure that we set ourselves up. And most of this impact to selling through the inventory on both the new and new side would be in the front half of the year and there's some possibility that I could bleed a little bit more into Q3 because we have to be relatively judicious in terms of our approach into how fast we want to sell through those assets.

But we wanted to reset the stage and say, okay, if we want to cleanse our inventory, which you could argue it's still relatively healthy, we'll still make good margins, we're just not going to make margins to the same extent that we wanted, so I'd expect that our margins for the collective 2026 could maybe be down year over year, like 120 basis points, maybe upwards of 130 basis points on the new and new side combined over the course of the year because of the pressure on the front half of the year.

Got it. That's helpful. And then to this point about. The better equity position for consumers, I just want to be clear here it seems like in the context of the guidance, we're factoring in the cost associated to being in a better place to take advantage of that, but it doesn't seem like we're necessarily factoring in that positive inflection. That it seems like you anticipate it, starting in the second half of the year. Just want to make sure that's the right way to think about this.

No, I would argue that we are factoring in what will be that improvement in the second half of the year in terms of the volume opportunity. Which is why you can make a case that the front half of the year just based upon perhaps just like limited replenishment in certain categories of certain orders which you alluded to that is a distinct possibility.

You're going to see more dealerships inclusive of ourselves re up in anticipation of a multi-year '27 changeover in which case I think we set ourselves up very nicely to take advantage of an uptick in general demand and trade-ins in the back half of the year.

Okay, but maybe the disconnect, I mean if we think about sort of your assumption for industry retail, does that factor in that positive inflection or is that more you think maybe specific to you guys rather than the broader industry?

Hey James, it's Brett. So when you think about how we're factoring in that trading cycle this year into those retail outlooks, it's fairly minimal. I mean, the way we see this trade cycle playing out is pretty long duration. I mean, we're talking very early endings at the end of 2026 potentially building itself into '27, going all the way out to 2030.

When you think about having to replace, three years of RVs that normally are on a three to five year trading cycle that essentially got elongated by at least three years, based on what we see from those cohorts. So, minimal expectations if we think about '26 because it's much more of a longer tail event for the industry.

Scott Stember, Roth Capital.

Hey guys, this is Jack Weisenberger on for Scott. Thanks for taking our questions. Just moving into the parts and services segment. I mean, we have seen a decline in '25, compared to use sales rising. I assume you attribute that to prior prioritizing the space for use reconditioning, but is there any way you could give some detail kind of on that underlying business, there?

Jack, you broke up for a moment there, but I think I captured the general essence of your question. Yes, last year we generally were impacted in terms of a reallocation of our internal work. So that necessarily was a detriment to the overall external service work in PSNO category.

Heading into this year though, this is one of our focal points which we internally have been working through diligently and we don't speak about it too much extensively in a public setting, but we know we have a lot of work to do to expand our service capabilities and our service network.

Yes, we have more days and more service technicians than any other entity within this industry, but we do believe we're not getting as much in the external space as we should. So for this upcoming year we have focused pretty extensively on our tech training, which is really the people component of the business.

Within the process out of the business, we're launching a service CRM here which will be live over the next 60 days, which we've been focused on for the last 60 days. So this has been a sprint for us to try to set up a proper CRM. And then finally what we're also working on with manufacturing partners, especially THOR, is creating more streamlined parts process for reordering and reducing the repair event cycle time for consumers.

That last component is perhaps the most important, so I can tell you that is a pain point in our industry of just that repair event cycle time and how long it takes to get parts to actually satisfy consumer needs. So we'll continue to keep the group posted.

I know in particular you, Jack, and Scott have maintained a focus on this category, so we'll do a better job of speaking about this publicly, but we're quite excited about the opportunity there. And then while it's not going to be huge revenue, we do believe it's really good gross profit because the margins within our service business are oftentimes going to be pushing upwards of about 60% in service, whereas collectively in that part of service and others it's going to be, a little bit less than that.

Great, thank you. And then kind of focusing on -- pausing the dividend, and M&A. So just kind of what are you seeing in the M&A environment going into 2026 and does kind of pausing the dividend allow you to look any more aggressively for deals, or does it kind of get put in the backseat kind of ahead of leverage?

Yeah, it's Brett. So as we think about the M&A environment today in the pipeline we're seeing, it continues to lean, more on the -- I'd say the stress side. If you look at the assets available and coming to market, we are continuing to be extremely prudent, extremely disciplined when we think about deploying any incremental capital towards M&A.

We do have one that we have currently signed up that we plan to close in March that. Fits all of the criteria when we think about having a low rent factor, having a manageable small goodwill bite size number, and having incremental brands to add to the portfolio, but outside of that I would say our criteria is very tight, and we're going to continue to allocate and deploy that capital much more towards that repayment.

But we will always be in the market for it.

Noah Zatzkin, Key Bank Capital Markets.

Hi, thanks for taking my question. I guess maybe just to kind of follow-up on kind of improving inventory turnover. Is the decision there really driven by, kind of aged mix or optimization, of kind of unit type, just trying to kind of understand. Like, maybe the puts and takes to kind of repositioning, the inventory here. Thanks.

Yeah, optimization number one, Noah, flexibility number two, and really the driving factor behind that all is the flexibility is being limited by the fact that we're locked up in some non-core assets that we'd ideally like to redeploy that capital into better turning assets.

So as we sit here today, about 18% of our new assets are multiyear 2025, which inherently those are going to be one model year too old, and we're on the shot clock right now where model year '27s are going to be debuted somewhere in that June July time frame.

So we're going to position ourselves to be completely out of those assets to take advantage of the opportunity of our newer model year. Never mind. On the used side, we're relatively aggressive in pursuing expansion of our used inventory investment in the second half of last year. We just want to make certain that we turn through that product as fast as possible.

There's a general rule of thumb in operating a dealership. I mean, your first loss is your best loss, or simply put in another more positive light is your first opportunity to sell something is probably your best opportunity to sell it.

So while in the case of used margins we still think that they'll be healthy in the context of the general like dealership business, we think that there could be a little bit more pressure on used margins more holistically on the front half of the year compared to the back half.

So I wouldn't be surprised if our used blended margin for the entire year ended up in that like 17.5% range, maybe even a little lighter, whereas on the new side we'll again be under some pressure on the front half of the year. Paving the way very nicely for the back half of the year, where I could see our new blended margin for the entire year being somewhere in that like 12.5% range.

So collectively though, this is all about optimization and flexibility and some of that flexibility is being hindered by means of just having some non-core assets today.

Got it. That's really helpful. Maybe just one housekeeping question, I think you mentioned kind of thinking about retail in a range of 3,250 to 350,000 units. Is it too simplistic to kind of assign. The ends of those ranges to the EBITDA guidance range, meaning like the 275 would be associated with 325,000 industry units and then just any other color on the top and the bottom of the range. Thanks.

No, I think that's a pretty constructive way to look at it. And obviously there's going to be some weird variables in there in terms of like general SGA's percent of growth and then ultimately is their market share gains and that's where you can get caught in this trick bag. But I think if you're to bracket it just holistically, that's a helpful place to start and then we're giving you a range where you can figure out your puts and takes of what is that bull versus [bear] case.

We think that $300 million is really helpful place to start as a midpoint and then there's going to be different opportunities that arise throughout the balance of the year. I mean we're sitting here only about, 55 days into the year and 55 days into a different management change where there's a different amount of possibilities and range of outcomes here as we go through the balance of the year.

Tristan Thomas Martin, BMO Capital Markets.

Hey, good morning. When you talk about non-core RV assets, what are you referring to specifically?

So when I think of non-core -- on the new side, I'm thinking of floor plans that are no longer being built or in the case of like Thor -- Thor's consolidated some of their manufacturing businesses from like a Heartland into a [Jayco] and some of those older Heartland units, while still a relevant brand, they're no longer in production.

And while it's still a good product and while we still will make a margin on it. We can't expect to make that same elevated margin that we would on a fresher product, and when we look at the use side of the business. On a used asset generally hits about 120 to 150 days, there's a high likelihood that unless you sell in that ensuing 30 day time period that it's going to start to hit an age bucket of like 210 to 280 days we want to avoid that at all costs.

Use especially as one of those categories where you need to move quickly through those assets because every 60 to 90 days there's going to be some sort of depreciation hit associated with [NADA] at a minimum, and NADA unfortunately is going to be relevant because that's the determining factor of advanced rates for financing capabilities.

So to put that in simpler terms, when a customer comes in and they want to buy an asset, it doesn't matter what the fair market value is of that asset, they're going to be limited by that financing advance rate on the front end and back end based upon NADA evaluation.

We as a dealership have two options. We either asset customer for an increase in their deposit, their down payment, to reduce that overall advance or that financing amount, or number 2, you have to cut margin to actually satisfy that.

And unfortunately, we're in a period on some of those older assets we just might have to have a willingness to cut some margins to ensure that that customer could buy that asset because there's a significant amount of credit available. It's just a matter of consumers having a willingness to actually put the down payment and actually afford that monthly payment.

And, then another question come around like this new industry inventory strategy, I'm sorry, how does that impact your ordering with the OEMs and then also have OEMs kind of handle this change plus the weather and their production schedules like. Thanks.

I feel like this is like a fishing question. We will continue to reorder with manufacturers at the same pace we always have on the best selling products. What we have gotten into a nice cadence on is actually ordering more frequently, so with greater frequency and with shorter lead time.

So in other words, like we'll place orders this week and we'll be focusing largely on April orders. Whereas historically there's been time periods where we've had to order out in excess of like three, four months and we have to project out then the following three or four months of sales, which is playing a dangerous game of like what are the various outcomes of retail sales activity and what sort of ending inventory balances do you want and need.

So I would argue we're in a really nice pull through environment as opposed to a push environment, where demand is truly being pulled through and we're having to just modify orders on an as needed basis based upon short-term trends.

So the best-selling brands products we'll continue to order in mass, and I can tell you we work extensively with all of our partners at Thor, [For Sherber], Winnebago, and we make sure that they have as much visibility into our real time demand. So they can also modify whatever sort of parts material materials they're ordering up in the verticals.

Brandon Rolle, Loop Capital.

Good morning. Thank you for taking my questions. First, just on weather, obviously there's been some weather in the Northeast over the past weekend. Any early takes on maybe impacts to lost, unit sales or, location closures for that area?

So we were largely impacted in particular across that Atlantic region, so really beginning in Virginia all the way down to Florida, and then if you span it over into that Midwest down to Texas, so almost that entire expansive quadrant where there are certain areas in the country, like for example, in Arkansas, where kids are home from school for upwards of two weeks or in like Nashville where the power was out for five straight days.

So there's varying levels of magnitude of impact, but we have a pretty tremendous amount of density of dealerships within that general quadrant. So it's tough to say obviously what sort of true missed sales exist out there versus what the opportunity will be for March, but that's really been our focus in particular in the short-term is how do we just take back what we feel like we've lost over that prior 17 day time period or so.

Okay. And just on the retail front, obviously it seems like the RV shows have gone pretty well, but, just in a normalized retail environment. Can you talk about maybe trends you've seen year-to-date, outside of the shows, and outside of where weather's impacting demand. Thank you.

Yeah, so it shows we performed very well from a volume perspective at every show that we participated in. However, what's been lost in that is some of the actual gross profit generation has been down year over year. So that suggested the fact that there was just more pressure across the board in certain categories, in particular in the travel trailer category this year, but more broadly, if we take a step back, if you look at both the new and used segments, travel trailers in particular are not performing as well as they were last year.

Within the new side of the business, we're doing really well on fifth wheels and entry level motorized. When I say really well, like new fifth wheels on a same store basis, we're up in excess of 25% and have been year-to-date in both January and month to date in February. And then on the you side of the business, we're performing really well in the context year over year in every category.

What's lost in that though, Brandon, is travel trailers often account for on the new side of the business in excess of 70% of our sales and on the youth side of the business in excess of about 60% of our sales. So we as a company have still a heavy dependency upon that category, and we're going to be working extensively to try to see what we could do to turn that fortune around that short-term pain to ensure that we're picking up more benefit here as we enter into the selling season.

But we feel good with the general demand out there, especially the void of this weather event. Where if you look at the front half of January, we did really well and we're putting up really positive results across the country.

And then in certain pockets like out west, like in Arizona, Denver, the Northwest, we've consistently performed well across the board. Mind you, it's been unseasonably warm out there in that general region. And while there's some industries that have suffered like, the [skiing] industry, for example, in Colorado, we've actually benefited from that this entire winter.

Okay, great. And just one last question on, the strength in fifth wheels. It seems like the private label products are really gaining some traction at the shows, and I think a supplier, last week had mentioned, it seems like demand is trending towards good, maybe not better, best. Is private label, fifth wheels, really where the demand's centered around right now? Thank you.

We're seeing our most material improvement within all the exclusive brands that we've launched across the board. So that's where I would argue our fifth wheel improvement is truly idiosyncratic to us, and I would be shocked if the entire industry was seeing the amount of gains that we're seeing year over year.

So I'd assume that within each of these categories of fifth wheels and then she'll have a motorized, we're picking up material market share because we just had a more creative strategy heading into this year.

(Operator Instructions) Jim Chartier, Monness, Crespi, Hardt.

Okay, so historical used gross margin was in the low 20% range, new kind of 13% to 14%. What are, what is kind of the new gross margin target for new and used, under the kind of the -- more strict inventory term targets?

I'd say for this year, Jim, we anticipate over the balance of the entire 2026 year that new margins will probably settle into that like 12.5% range and use margins probably in that 17.5% range but once we get into a more balanced environment of just redeployment capital and maintaining just standard steady state turnover rates.

I'd expect that our margins will structurally be higher and we'll get closer to what have been those historical norms. So I would hope that by 2027 if we're seeing improvement in turnover, we feel really good with our deployment of capital and a replenishment of inventory that our new margins should be held up settling into that like 13% to 13.5% range.

And then on the use side, I wouldn't be surprised if we start to settle into that like 18 to maybe pushing upwards of like [18% to 75%] range. But I do believe in the use side that it'll be really difficult for us to rationalize sitting in at that 20% margin range because I do believe we'll be giving up opportunities in terms of just raw gross profit generation.

I think I'd argue over time and over a longer tale that use margins selling anywhere from like 18% to 19% is probably a better way to approach it, especially in connection with turnover rates being more elevated than the new side. That's still a much better gross margin return on investment for us on the use side. So we'd rather be aggressive there, even if we start to just like tap down some of that new side a little bit more.

And so how does that translate then if you just going to be lower than it was historically by a couple of points, is a 7% EBITDA margin for the business still realistic, just SGA the gross target change, how do you kind of, get back to a historical, operating EBITDA margin.

Yeah, I think that it definitely is possible, but this speaks more to just how do we optimize our footprint? You've seen us make a lot of tough decisions over the last year in terms of shutting down locations that were underperforming, making sure that we're eliminating some of the fixed cost structure that exists in this business.

And we're less in this cost cutting mode to get closer to that EBITDA margin and that SG&A 80% of gross. It's more of this cost optimization mode, where we do believe that we'll be able to accelerate our used business that much more and come up with a more predictable GPU model compared to the straight gross margin model, which becomes a lot easier for us to then rationalize what our fixed cost structures are to start to drive that EBITDA margin back up to historical norms and ideally in a mid-cycle hitting that 7%.

And then also on the SG&A side we know we still have some work to do to get closer to that 80% or better SG&A is a percent of growth, never mind get back to some of the levels that we experienced in 2016, 2017, which I think we have a lot more work to get down to that like 72% to 74% SG&A is a percent of growth.

Thanks, and then just on the new side, where do you think, the ASP is going to shake it out for the full year?

I could see new ASP for a full year shaking out it like that like $39,000 to $40,000 range and on the use side I could see it being in that like $31,000 range.

This concludes our question-and-answer session. I would like to turn the conference back over to Matthew Wagner for any closing remarks.

Thank you very much for everyone's time this morning. As you can tell, we're very excited for the opportunity that lays before us, but we know we have quite a bit of work to do in the short-term to pave the way for a much brighter future. We look forward to speaking with all of you again in another couple months.

This conference call has now concluded. Thank you for attending today's presentation. You may now disconnect.