When the Road Gets Bumpy: Why Camping World’s Record Sales Didn’t Fuel a Rally
Camping World Holdings (NYSE: CWH) just clocked a record 45,000 RVs sold in a single quarter. But the market hasn’t joined the road trip—shares have skidded -41.1% in three months and a bruising -53.8% over the year. How can a company deliver double-digit sales growth and still drive straight into investor apathy?
The Paradox of Plenty: Selling More, Earning Less
At first glance, the numbers gleam. Q2 2025 revenue soared to $2.0 billion (up 9.4% YoY), with used and new unit sales both leaping over 20%. Gross profit improved 8.1% to $592 million, and net income for the quarter reached $57.5 million—more than double the prior year’s mark.
Yet, the air is thick with paradox. The average selling price (ASP) for new vehicles tumbled 10.6% to $34,279, and for used units slipped 1.2%. Gross margin drifted ever so slightly down to 30.0%, and the company’s total store count shrank by 6.5% as locations consolidated. More units out the door, but each at a thinner margin.
Debt: The Shadow Cast Over the Campfire
Behind the scenes, Camping World’s balance sheet tells a cautionary tale. Net debt sits at $2.67 billion, and the debt-to-equity ratio hovers at a daunting 12.26. While management touts over $200 million in real estate owned outright, investors can’t ignore the drag of heavy leverage. Interest expense, though down from last year, still chews through more than $21 million each quarter.
For a company with a trailing twelve-month net income margin of -0.8% and negative return on equity (-26.8%), even strong sales can’t offset the perception of risk when debt service eats into every dollar earned.
The Interest Rate Headwind: Affordability Hits the Open Road
The broader RV industry is at the mercy of macro crosswinds. With RV loans ranging from 6% for the best borrowers to 18% for subprime, and the Federal Reserve keeping rates stubbornly high, affordability is a persistent headwind. Management estimates a 100-basis-point drop in rates could revive industry volumes, but until then, both consumers and Camping World’s own financing costs are feeling the squeeze.
Even as Camping World targets SG&A savings of at least $15 million and EBITDA of $310 million next year, the market is discounting such ambitions in light of higher-for-longer rates. The RV industry’s reliance on low-cost financing is a double-edged sword—one that’s keeping the sector in check.
Inventory Glut, Price Cuts, and Survival of the Fittest
Dealerships nationwide are wrestling with late-stage inventory restocking. To keep units moving, Camping World slashed prices—explaining the record volume but lower ASP. Used inventory, valued at over $400 million, is both a lifeline and a liability if resale values fall further. With sector sales growth turning negative for much of 2024 and Camping World’s own full-year 2024 revenue down 2%, the company can claim share, but not a tailwind.
Leadership Changes: Navigating with a New Map
2025 is also a year of transition at the top. President Brent Moody and CFO Karin Bell are retiring, replaced by Matthew Wagner and Tom Kirn. While fresh leadership could spark strategic shifts, it’s fuel for uncertainty in a market already on edge about execution and vision.
Not Alone at the Campsite: Fierce Competition, Fickle Consumers
The RV landscape is crowded—Thor Industries, Winnebago, Forest River, and Lazydays all jostle for share. While Camping World boasts a 13.5% market share, the industry is still digesting the post-pandemic demand hangover. Specialty retail as a sector is up just 3.6% year-to-date, and the cyclical nature of discretionary spending means investor patience is thin.
When a Record Isn’t Enough
The market is a harsh navigator—it rewards not just the quantity of progress, but its quality. Camping World’s journey in 2025 is a masterclass in the new math of cyclical retail: more isn’t always better, and revenue records mean little if debt, rates, and margin dilution haunt the rearview mirror. Until interest rates ease or margins fatten, investors seem content to let this convoy pass by.