CWH Q1 2025: Used Unit Sales Surge 30% as Cost Cuts Drive Margin Recovery
Camping World (CWH) delivered a Q1 marked by aggressive cost action and a pronounced shift toward used RV sales, yielding nearly fourfold EBITDA growth year-over-year. Management’s playbook centered on SG&A reduction, dealership consolidation, and market share gains, all while navigating mixed ASP trends and tariff talk with operational flexibility. Investors should watch for the durability of these margin gains as the company leans further into used inventory and cost discipline through the balance of 2025.
Summary
- SG&A Reset Accelerates: Rapid cost actions, including $35 million in annualized reductions, are set to impact margins in coming quarters.
- Used Inventory Strategy Pays Off: Record procurement and high-velocity sales in used RVs are fueling market share and gross profit growth.
- Guidance Anchored in Share Gains: Leadership remains confident in surpassing industry growth, with a focus on deleveraging and disciplined expansion.
Performance Analysis
CWH’s Q1 financials reveal a business in transition, with revenue growth of 4% propelled by a 30% surge in used unit sales, even as new unit ASPs softened. The mix shift toward used vehicles, which command higher gross margins (18.6% in Q1), underpinned a sharp improvement in profitability, with adjusted EBITDA reaching $31.1 million, up from $8.2 million in the prior year. The company’s used inventory procurement hit record levels in March and is on pace for another record in April, supporting strong comps into peak selling season.
SG&A expense, a critical focus, was in line with expectations but does not yet fully capture the $35 million in annualized cost reductions enacted late in the quarter. Dealership consolidation and headcount reductions are expected to drive further SG&A leverage in the second half, with management targeting a 600-700 basis point improvement in SG&A as a percentage of gross profit for the full year. Despite ASP pressure—largely driven by a mix shift to entry-level units—CWH’s market share reached a record 14% through February, well ahead of its initial 12% goal.
- Used Business Outperforms: Used RV sales and gross margin expansion offset ASP softness in new units, validating the inventory strategy.
- Cost Discipline Drives Profitability: Decisive SG&A reductions and store consolidation are set to unlock margin gains through 2025.
- Market Share Momentum: Combined new and used share climbed to 14%, reflecting both volume and operational execution against industry peers.
Cash and inventory remain robust, with $179 million in cash and significant unencumbered inventory and real estate, supporting both liquidity and future deleveraging efforts.
Executive Commentary
"We began the mandate by making the difficult decision to part ways with a number of team members and optimized our footprint and real estate through the targeted consolidation of dealerships, working to accelerate sales per rooftop and improve efficiency. Through an intense focus on profitability, we achieved EBITDA growth of nearly four times the previous year in the quarter."
Marcus Lemonis, CEO
"We achieved record levels of used inventory procurement in March, and we are on pace to set another record in April. This laser-focused effort ensures we have an adequate supply of used inventory to sustain our comps into the peak selling season."
Matt Wagner, Executive
Strategic Positioning
1. Used Vehicle Led Growth
CWH’s pivot to used RV sales is the quarter’s defining lever. Used units now drive both top-line growth and margin expansion, with management capitalizing on procurement scale and velocity. The company’s ability to source and turn used inventory at record levels positions it to capture demand as affordability pressures persist in the new segment.
2. SG&A Rationalization and Store Consolidation
Cost discipline is central to the 2025 plan. The $35 million annualized SG&A reduction, achieved through headcount cuts, marketing spend reductions, and dealership consolidation, is expected to flow through in the second half. Store consolidations are designed to improve sales per rooftop, a key metric for both margin and capital efficiency.
3. Market Share Capture and Brand Mix
Market share gains—rising from 11.2% to 14%—are underpinned by targeted entry-level offerings and exclusive contract-manufactured brands, which allow CWH to fill price and floorplan “matrix” gaps across new and used. The company’s data-driven approach to affordability and payment options is a differentiator in a cautious consumer environment.
4. Resilience to Tariff and Macro Pressures
Management downplayed direct tariff risk, citing U.S.-built inventory and flexible pricing. Any new model year price increases are expected to be mid-single digits, with used inventory values likely to benefit from new price inflation. The company’s contract manufacturing and procurement agility provide further buffer against supply shocks.
Key Considerations
Q1’s results reflect a decisive operational reset as CWH adapts to a shifting RV landscape. The company is betting on margin recovery, used inventory velocity, and disciplined capital allocation to drive shareholder value in a volatile macro environment.
Key Considerations:
- Margin Leverage from SG&A Cuts: The full earnings impact of cost actions will become visible in the second half, with further cuts possible if macro or ASPs deteriorate.
- Used Inventory Turn as a Performance Driver: Record procurement and consignment volumes are critical to sustaining sales and margin momentum as new unit ASPs face mix pressure.
- Dealership and Real Estate Optimization: Store consolidation is accretive to margins and sales per rooftop, but the balance between footprint growth and efficiency remains a strategic watchpoint.
- Balance Sheet Flexibility: Strong cash, unencumbered inventory, and real estate provide liquidity for opportunistic M&A and deleveraging, but leverage reduction remains a management priority.
Risks
Execution risk is elevated as CWH pursues aggressive cost cuts and a used-led growth model in a tepid consumer discretionary environment. Macro headwinds, including potential consumer credit tightening or deteriorating confidence, could pressure both sales and inventory values. Tariff and interest rate volatility remain wildcards, though management asserts limited direct exposure. Finally, the ability to maintain market share gains without sacrificing margin or customer experience is a key challenge for 2025.
Forward Outlook
For Q2 2025, CWH guided to:
- Low double-digit growth in used unit sales
- Low single-digit growth in new unit sales
- Vehicle gross margins within historical ranges
- SG&A as a percentage of gross profit improving 600-700 basis points for the year
For full-year 2025, management maintained confidence in outpacing industry retail trends and further deleveraging:
- Market share target above 12%, with current performance at 14%
Management highlighted that cost actions taken in Q1 and early Q2 will drive margin improvement in the back half, with additional flexibility to cut deeper if required. Used inventory supply and affordability remain central to sustaining sales momentum.
- Cost discipline and store consolidation are expected to drive operating leverage.
- Tariff and macro risks are being actively monitored, with contingency playbooks in place.
Takeaways
CWH’s Q1 marks a pivot to margin-centric, used-driven execution, with pronounced cost discipline and operational flexibility. The company’s ability to sustain market share gains, manage ASP mix, and execute on deleveraging will shape investor confidence through 2025.
- Margin Recovery in Focus: SG&A cuts and store consolidation are designed to restore historical EBITDA margins, but execution and demand durability will be tested in a volatile macro.
- Used Inventory Strategy Is Central: Record procurement and consignment are fueling growth and margin, but require ongoing sourcing creativity and working capital discipline.
- Watch for Market Share and Leverage Trajectory: Sustaining above-industry growth and reducing leverage are the key signals for long-term value creation.
Conclusion
CWH enters the remainder of 2025 with operational momentum, driven by cost resets and a strong used RV engine. Margin recovery and disciplined capital allocation will be critical as the company navigates macro and industry crosscurrents. Investors should monitor the translation of these actions into sustainable cash flow and market share leadership.
Industry Read-Through
CWH’s results spotlight a broader industry pivot toward used inventory and cost rationalization as new unit ASPs face affordability headwinds and tariff-related uncertainty. The company’s success in turning used units and consolidating stores may prompt peers to accelerate similar strategies, especially as OEMs adjust production and pricing in response to macro volatility. Tariff impacts appear muted for now, but any sustained price inflation could further advantage dealers with strong procurement and contract manufacturing capabilities. The focus on affordability, payment flexibility, and customer experience will likely remain central themes across the RV and broader consumer discretionary landscape this year.