Good morning, and welcome to the Camping World Holdings' conference call to discuss Financial Results for the First Quarter Fiscal Year of 2022. [Operator Instructions]. Please be advised that this call is being recorded, and the reproduction of the call in all or in part is not permitted without written authorization from the company. Participating in the call today are Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Karin Bell, Chief Financial Officer; Tamara Ward, Chief Operating Officer; Matthew Wagner, Executive Vice President; Lindsey Christen, Executive Vice President and General Counsel; and Tom Curran, Chief Accounting Officer. I will turn the call over to Lindsey Christen to get us started. Please go ahead, ma'am.

Good morning, everyone. A press release covering the company's first quarter 2022 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 1995. These remarks may include statements regarding the impact of COVID-19 on our business, financial results and financial condition; our business goals, plans, abilities and opportunities; industry and customer trends; our recently disclosed cybersecurity incidents; our strategic initiatives, acquisitions and planned capital expenditures; potential stock repurchases, future dividend payments, increases in our borrowings our liquidity and future compliance with our financial covenants and anticipated 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, our Form 10-Qs 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 2022 first quarter results are made against the 2021 first quarter results unless otherwise noted. I'll now turn the call over to Marcus.

Thanks, Lind. Good morning, and thanks for joining us. I'm here with members of our senior management team as we report results for the first quarter 2022. On today's call, we're going to lay out our financial results and the supporting comments around them. We'll also discuss macroeconomic industry trends with our short- and long-term view. As all of you know, 2021 was a historic year for Camping World and 2020 was right behind that. Our industry grew at explosive rates during the pandemic, but it's important to remember the historical path leading to 2020. For over 50 years, RV-ers have loved this lifestyle, and the industry has grown every single decade since inception. From our perspective, the world's passion for the outdoors has never been hotter. With new and younger buyers coming into the market, a new, lighter, more innovative units being produced, our prospective customer file continues to grow. Look, I've been in this industry for almost 20 years now, and I'm going to continue to work diligently to ease people's concern when they see a flattening or a reduction compared to prior years of new RVs sold. While some see temporary shift as a risk, our company sees it as a new launch pad, an opportunity to strengthen our infrastructure, improve areas of weakness and most importantly, make opportunistic and strategic acquisitions that further strengthen our foundation. We're proud to report for the first quarter of '22, we generated record revenue and saw that trend continue into April. Our total sales for the quarter were nearly $1.7 billion, up over last year by $105 million. While some of that revenue increase is attributed to a rise in prices year-over-year, it is also true that some of that came from an increase in our service and repair business,…

[Operator Instructions] Our first question is from Craig Kennison of Baird. Please go ahead with your question.

I wanted to ask about GPU, or gross profit per unit, on your new business. You had mentioned that inventory is now back to optimal levels. I'm wondering if that means we should look at GPUs coming down further to be more consistent with what you had on a pre-pandemic basis or if you think they can hang in at a higher level?

Well, obviously, Craig, with the traditional supply and demand curve, there are -- there is going to be pressures on margins as the competitive landscape ramps up. But it is important to note that we do not believe that we are going to return in the short term to margins like we experienced in '18 and '19. And so when we talk about pre-pandemic margins, we want to extract '18 and '19 because there was a glut of inventory in the marketplace. But I want to caveat that. A return to '18 and '19 margins could happen if, but we don't expect it to, the manufacturers continue to produce at a rate that far exceeds retail demand. And from the conversations that we've had with all the manufacturers, I think everybody learned their lesson. We think everybody learned their lesson, but we have to be clear. We're pretty good on inventory right now. And so we have seen some pressure in the first quarter, as you saw by our results, on the new side, but are very pleased and very confident that we can continue with pretty decent margins on the used side. So we're comfortable. We have forecasted it internally. And one of the things that we are looking to do, consistent with what we did in Q1, is continue to make sure that we're getting our fair share. We do not want to get our fair share by creating a race to the bottom. And we are a bellwether both for pricing and for promotion, and we believe that a healthy industry by all dealers and all manufacturers benefits us just the same. And so we want to make sure that we're not creating unnecessary pressure on margins along with the manufacturers doing the same.

That's very helpful. And then, I think I heard you say that you plan to reduce your investment in used RVs. I'm curious if that's true. What drove that decision? And then, if you could follow up, I believe, last quarter, you had targeted a goal of getting that used RV business to $3 billion over some horizon like 18 months or so. Is that still attainable? Or just your approach to that market change as you try to balance the inventory?

No. I think, ultimately, what happens -- any time you're going to try to test new highs, you have to put more on the table to see what the appetite of the market is, and we want to be very disciplined in recognizing when we can achieve increases in sales. Much like we did in the first quarter, we want to be prudent about the amount of capital we have deployed to achieve those goals. And when we ran our models, we believe that reducing that inventory at or slightly below $400 million would yield us about the same results, but most importantly, keep the margins where we want them. And while we want to chase revenue, we want to make sure that we're not breaking our margin model. And because we manage our days supply so tightly, looking at a goal of less than 100 days, and we want to have turns at 4 times, we want to find that balance. And as you know, Craig, when we try something, if it works, we go for it. And if we want to make slight adjustments to be sure that we're efficient with our capital, we're not scared to make that move as well. So it's a slight reduction from 423 back down to, call it, 390s to 400s. If we continue to see positive results in the second quarter, which we did in April, and we can do it on 380 or 375, we're going to continue to finesse that number, so we get the optimum results, based on the capital that's deployed.

Our next question is from Brett Andress of KeyBanc. Please go ahead with your question.

Following up on Craig's question. I hear you on not returning to 2018, 2019 levels, but on the new vehicle GPU, could you maybe help us understand where you entered the quarter and maybe where you ended it or exited it into April? I think we're just trying to get a little bit more color on how the second quarter and kind of the back half could play out, based on maybe where we are today.

Yes, I'm going to let Matt cover that.

As we entered into this year, we obviously were very optimistic with our 2021 results, and we took what the market was giving us at that time. And we saw a little bit of a change from our GPUs at the end of last year heading into this year, but frankly, not a very material change heading into the year. By February, we saw a little bit of an adjustment, and we made some changes in our online pricing environment. And then by March, we continue to see that sustain. Heading into April, we've really not seen much of a change in terms of those GPUs. And we're confident that throughout this quarter. We'll just continue to modify as necessary, based upon whatever demand trends we're seeing out there and what sort of pricing logic. We want to make certain that we're using to actually garner as much opportunity out there as possible. As Marcus said, we're not going to have a race to the bottom at all, and we don't see major fluctuations in short terms. However, as we continue to see quarters elapse and depending upon what the inventory situation is, then there's always a possibility of those GPUs could come down a little bit more over the coming quarters. What that is? I'd hate to speculate as we like to manage based upon current demand, current supplies and of course, we recognize what our competitors are going to do to actually garner a little bit of attention, and we want to make certain that we're getting our fair share of that marketplace.

I think one thing that I'd like to add to that is, I look at the trends and I look at our goals, and I combine those together, and I wouldn't be surprised if the GPUs in the second quarter were anywhere from 0.5 point to 1 point lower than the first quarter that we just reported as they stabilize into that number. Part of that is, when we look at the core of our business and we look at attracting -- continuing to attract first-time buyers through the market, we're taking a different approach both on how we present payments to the market, in terms of affordability, and making sure that we're leading the charge on those entry-level units. So we're still trying to sell a $13,000 unit arriving at, call it, $129, $139 monthly payment as we look to bring in new people into our ecosystem. We're not going to ever resist trying to capture that. And one metric that I thought was interesting is what happened to our trade percentages in the first quarter.

Well, we started to realize that we're going back to those normalized levels of trade percentages, we're going back to 2020. We had that reduction in trade percentages, where we were down in the teens at that point. However, we've reached that more sustainable level of higher for 20% of trade-in rates, and we've really maintained that same track over the past few quarters now at this point while continuing to see that returning buyer coming back into the marketplace.

As well as the first-time buyers still showing up, and so that's a good indicator for us is that when we continue to see at entry-level travel trailer still being a big part of our business. And I can't recall what month it was. It could have been March. We had sold 800 of what we consider our entry-level unit, our Coleman 17B. That was the single biggest month we had, had in that particular space. And it's important to note that we don't think that, that 800 units of entry level came at the expense of a more expensive unit. We don't think that somebody said, I want to buy an RV and I'm now not going to buy the bigger one. We actually think we found new audiences in that quarter, and that's a big focus for us through the balance of the year, is continuing to attract new buyers, not only to the industry, but more importantly, to our business.

Got it. Okay. And then, Marcus, we've been getting more questions lately on the dividend and the payout ratio. And look, I know no one here has a perfect crystal ball on macro. But how low would EBITDA have to go before maybe you take a step back and think about the current dividend level?

We have no plans in the near term to modify our dividend strategy at all, and we have sensitized multiple scenarios to ensure that our strategy is sustainable.

Next question is from Daniel Imbro of Stephens Inc. Please go ahead.

This is Joe on for Daniel. Noting the negative growth in Good Sam Club members, what do you think is driving that? And what do you think is going to drive positive growth, moving forward?

We're actually very pleased with the performance of our Good Sam Club. It's important to note that when we exited the Gander business, and we exited the categories in Q3 of last year, particularly firearms, hunting equipment, fishing equipment and apparel that we lost a set of buyers that were part of that file. And we made a decision not to chase that particular buyer because the crossover between their behavior and our core RV behaviors didn't match up. And so for us, it's more of a cleansing to a pure file, and we feel good that we've done that. In our core RV customer, particularly with our acquisitions and our new stores and our ability to add new names to our file, we're positively seeing growth in some of those areas. And so we're very happy with where that's happening. But we understand, through the third quarter of 2022, both on the revenue side and on the membership side, we have to cleanse out all of the consumers and revenue associated with those categories that we exited.

That's super helpful. Just as a follow-up. It was noted in the release, the new and used inventory partially driven by the easing of new vehicle supply chain, and in the prepared remarks, you -- new inventory closer to historical levels. Just wondering, what's kind of driving the easing of supply chain? Or what is normalized? And then, do you expect that's more of a structural step in the right direction? Or could that be more of a temporary alleviation?

When you look at historic levels, we're still actually maintaining, as an industry, relatively light supply of inventory levels out in the field However, we know, as the largest dealer, we also have a disproportionate ability to be able to source from a variety of manufacturers, given our relationships with manufacturers to create exclusive products, exclusive brands. So over the past 1.5 years, as we saw that scarce supply of inventory, we worked diligently to make certain that we were not without these core products and floor plans. We feel good with all of the work the manufacturers put in that they've been able to take care of our inventory needs adequately well to make sure that we are well prepared, heading into the season. However, we also wanted to make certain that we were more than covered, heading into the season because we know that there's always certain things that could happen in the supply chain, moving forward. We don't see any of that today, but we also know right now, we're in April -- I'm sorry, in May, excuse me, just ended April. And as we're heading into prime selling season, we are adequately prepared, and we feel like we are well stocked. We're able to capture what the market requires of us. And then heading on the back half of the season, we see those inventory levels seasonally adjusting to be prepared for the natural sell season of actually reducing inventory levels.

Yes. And that's maybe even at a layer of texture on there. We are monitoring on a daily basis the open orders that we have in our own system, and historically, we would always base those orders on what we forecasted with demand. And what threw a wrench into all that is when we had breaks in the supply chain. And so a lot more orders had to go into the system in anticipation that we knew we weren't going to get a great percentage of them. As those shelves have restocked and we brought some inventory forward for the selling season, we have already planned for reductions in inventory in excess of normal seasonal reductions. And so when you look at the amount of inventory that's going to come in, in May, June, July, August, September, we expect to have rightsized our new inventory to a level that we're comfortable with because we've proven that we can sell more with less. But we did not want to go into the selling season, particularly with COVID still having a presence in Asia and other markets, where parts and pieces were coming from that the supply chain could get disrupted in May, June, July and August. And so we brought some inventory forward. But let's be very clear, as we take inventory in over the next several months, it is our plan to take inventory in at a slower rate than we're selling it, more than we normally would as we seasonally adjust. And so however much people want to read through those lines, I'll make it more clear than that, we are not going to be keeping our inventory levels where they're at today as we go through the balance of the year because we recognize the risk associated with inventory and the importance of the disciplines that have made us a lot of money in the last several years and are not going to give that up at anybody's expense -- at our own expense.

The next question is from Mike Swartz of Truist. Please go ahead.

To start off, maybe, Marcus, with regards to the '22 outlook, I know you didn't provide much detail, but I think on the last call, you had said that you had expected comparable sales to be slightly positive for the full year. Is that -- I guess, is that the outlook? And maybe give us some thoughts around how maybe that plays out throughout the year.

Yes. When we did have our last call, the market had not -- the macroeconomic issues and the geopolitical issues had not really flared up to the extent that they have. And as we deal on a rate-increasing environment, it's tough. When you look at our new same-store sales for the first quarter, we were down 16%. I think that's slightly outperformed the overall market. When we look at our used, we were relatively flat. And then on a combined basis is how we look at it, we were down 11%. We expect those types of trends to continue and have adjusted our SG&A internally to address that. We know we have some further modifications to make, but I think, based on the new information that presented itself after the last call, including the political unrest, including inflation, including all the other macro factors that affect consumer confidence, we have retracted our own selves. But still feel confident, very confident that our used business will continue to perform. We feel confident -- we saw that in April again. We feel confident that our service, parts and other business will continue to perform. And as a caveat to that, I received a lot of questions last night. Why is our service, parts and other down year-over-year? I want to clarify it one more time. Our service parts and other was down because of the elimination of the Gander products, firearms, hunting, fishing and apparel. But when you extract that from the number, our pure labor hours and parts associated with servicing repair performed very nicely. And in one of the months, we actually broke a record year, an all-time record. And then when we look at our Good Sam business, performing 9% up year-over-year, we feel confident that those things that deal with the installed base will be fine. What we're dealing with is the pressure on the part of the business that we don't have as much control over. That's the new RV sales. Hear this, for sure, we will make whatever adjustments we need to make to our compensation structures, to our fixed structures, to our advertising structures to address whatever changes we see on a daily, weekly, monthly basis. But we think that, that negative same-store sales number on the new side, for the industry and for us, will continue for the next couple of quarters.

Okay. That's helpful. And then, Marcus, I think you had mentioned just in terms of maybe the maturity kind of run rate for the new -- the 14 new locations that you expect to open this year, was about $0.5 billion. I think, that backs into right around $40 million per location. Maybe help us think about how that ramp to maturity plays out? Is that something that reached in two years, four years, five years? Just give us a little context around that?

Yes, that's a great question. We look at our stores today. I think our average store does about $43 million, and we wanted to cut that a little bit shorter because we make acquisitions that sometimes, are north of that and then we opened stores de novo that take a minute. On our new stores that we opened, as we forecasted in the past, you get to a traditional performance level. It takes 18 to 24 months. We do sensed sometimes see profitability happen a little earlier than that, from a positive cash flow standpoint, but it doesn't reach the operating leverage, from an EBITDA performance, for about 18 to 24 months, operating in that EBITDA margin. From an acquisition standpoint, oftentimes a variety of things happen. Sometimes, they integrate into the system, and they perform very well and they exceed our expectations because our systems go in. And sometimes, they retrack slightly for 12 months. But on average, between $35 million and $40 million is what we expect to see, on average, within 24 months of them being in our system. And if we can do that on a regular basis, assuming that market conditions don't deteriorate at a rate that we don't want to deploy our capital that way, so we should be able to stack $0.5 billion, $0.5 billion, $0.5 billion every year and then get other organic growth from our core businesses.

Our next question is from Joe Altobello of Raymond James. Please go ahead.

I guess first question, Marcus, I just want to go back to your comment you made to Mike's question on same-store unit sales. You mentioned new was down, call it, 17% in Q1.

15.

Was flat. Yes -- and is that what you expect those trends to continue for the balance of the year? We do have some easier compares coming up. So maybe you can give us some color on what you saw in April. You sound pleased with April, but did those trends improve a little bit in the month?

They actually did not improve on the new side, but they did improve on the used side. And so as we talked about in the latter part of last year our company strategy, when we started the sense in the latter part of last year that there could be some pressure around GPUs and potentially some pressure around volume, we had to pivot. We think that we'll continue to see that pressure temporarily on the new side as we're comping big numbers. And keep in mind, when you're operating 189 stores, two units here, three units there, when you multiply it, it starts to add up very quickly. We're doing everything we can to replace that missed opportunity with finding either first-time buyers through our funnel that we haven't met before, which is probably why we performed slightly better than the marketplace, and our used business as an alternative, based on people's payment preference or value proposition as well. And the fact that we're performing nicely, in light of these macroeconomic issues on the used side, gives us a lot of bright light for the future because historically, we relied on our service business, our retail business, our Good Sam business as the predictable part of our business. But now that we can add our used business in all segments, by the way, as another tentpole of predictability, we have set a goal as a company to take out that erratic behavior. But in terms of the new RV sales, our internal discussions have focused around what adjustments do we need to make to our overall business in anticipation of that new same-store sales number staying in that same range. If we're wrong and they repair themselves because the comp set is easier as we go through the back half of the year, then our business will be the beneficiary of it, but we don't want to anticipate it and then be wrong on the SG&A side.

Okay. Got it. That actually segue to my second question, which is your comment earlier about OEM as being disciplined on production. You seem fairly optimistic there. When we look at the RV IA data, it's up double digits in Q1 on a record Q1 last year. So maybe help us understand or try to square those two data points, if you will.

I always try to hesitate commenting on any RV IA forecasting the data, and they always hesitate to try to speculate why the manufacturers would continue to produce at a rate when they conceive the retail registration information as all of us can. But I also do know that the prudent managers that run those businesses, also feed the data. And when you think about lead times for ordering raw materials, for ordering frames, for ordering other parts and pieces, those lead times are not just in time, especially when you're coming out of the supply chain breaks that we had in the last 24 months. We complement the manufacturers on hedging and bringing some of that raw product in, speculatively. But Matt and I both had conversations with each individual manufacturer, both that we purchased from and even ones that we have no relationship with, telling them what we were seeing in January and in February. And we strongly encourage them to cut their production back to scale to meet and match what retail demand was and in some cases, even withdraw a little bit, so that the inventory that's out there in the system can settle in and then we can get into more of a just-in-time inventory. We were confident that these manufacturers see the benefit of that in their own business because the ignoring of that factor ultimately would lead to a glut in their finished-goods yards, a rigorous and disciplined approach to ordering and purchasing on dealer side, and it would lead to unnecessary discounting by the manufacturer to clear those yards. I don't believe they want to go back to that level of business, where they're trying to push out product at all costs. I don't believe they will do that. And I think collectively, as an industry, we learned that lesson. We are hopeful, but I want to reiterate like I said before, we are not going to bank on anybody else's decisions, but our own and so have planned our forecasting and our ordering and our intake of inventory as if they're not going to. And if they do, great, the inventory right sizes and margins stabilize.

Our next question is from Ryan Brinkman of JPMorgan. Please go ahead.

I think I recall you suggesting, maybe around the middle of 2021, that the industry was probably a year or so away from matching demand with supply, but that there could also be a period after that, where inventories remain lean because of a need to restock wholesale inventory. So the comment that you made today about total full stocks being adequate, does that indicate that inventories normalized maybe faster than was previously thought? And would you say that as a function primarily of higher supply or lower demand or both? What do you think?

I think two things. It definitely happened quicker than all of us could have anticipated. I think it's a function of two things. The manufacturers ran hotter than normal in November, December and January than they normally do. And you look at the January shipments that broke, I think it was like 60-something-thousand, it was the hottest number that we had ever seen. And I think, in fairness to them, they're trying to get all dealers, not just us, all dealers back to a stocking level that creates some level of normalcy for their own business, and we are supporters of that because the healthy industry by all dealers is good for everybody. I think one thing that none of us could have anticipated is that there would be -- the manufacturers would be running hot because they had the forecast months and months in advance and that a slowdown or normalization of demand. I call it more of a normalization because I want to remind everybody, the demand that we saw in the first quarter of '22 and even we're seeing in April and May, is still one of the hottest years we've ever had in this industry. So while we look at like -- we're retracting a little bit or retracting to a level that's still pretty darn good then I think so when that happened, they are manufacturing hot and retail registrations are dropping by 10%, 15%, 20%. Those two things working in tandem, probably got the inventory levels back to normalcy quicker by maybe four, five, six months than we could have anticipated. Easy solution, slow down your manufacturing, continue to take inventory in at the slower pace and have a great selling season. Big mistake if you do this, if you continue to manufacture at a high rate, dealers continue to buy at a high rate, you have a good selling season and you don't bring it down going into August and September. All you're going to do is push that concern into the fourth quarter. Because the industry is smarter, I expect us to normalize that here quickly in the next four, five months as the industry sells tens and tens of thousands of units. I think we'll be fine, but it did happen quicker.

Okay. Great. That's very helpful. And then just, I think, the pandemic and its aftermath resulted in the demand for RVs, of course, increasing more than the supply did that resulted in large upward pressure on new RV prices, likely by association, used RV prices, too. And there were other reasons prices were increased, including the higher raw material and other manufacturing costs, depreciating dollar or whatever. But generally speaking, I think prices and margins rose more than might have been expected. And so as we move forward, just curious, how you think about if demand were to fall relatively modestly or supply increased relatively modestly, do you see the potential for more than might be expected decrease in prices or margins similar to how we had more than might have been expected increase earlier? I think it's really hard to say. But just curious, how you might be thinking about that in the context of the inventory management you've been talking about in this call, your outlook for margin, which you're not being as explicit with as previously, et cetera?

Well, I want to be more explicit, if I haven't been explicit about margins. Margins have come down over 2021 levels. The results in Q1 of '22 give you an indication that they have done that. We expect there to be slightly, slightly more contraction of our margins in Q2 as we look to accelerate sales to deal with slowdown in demand, and we love to make sure that the inventory stabilizes. Here's what I feel pretty confident about. As long as the manufacturers don't overproduce in the next six months, we will not see a return to '18 and '19 margins. And while that may not be explicit enough, it is clear for us what needs to happen and it's clear for the manufacturers. I do believe that demand is going to continue to feel pressure, and whether that's rising interest rates or general consumer demand, we think it's going to feel pressure. Our hedge against that is clearly twofold. Number one, in each segment that we stock today, we have to stock at the lower-end price point of each of those segments. And while we're blessed that financing terms exist from 180 months to 240 months and a rise in interest rate doesn't affect the payment that materially, it is on the consumer's mind. So we have to make sure that we position ourselves at the bottom half. We always want to have the least expensive home in the neighborhood, not the most expensive home in the neighborhood. Secondly, our offensive strategy on pre-owned is another hedge that gives our consumers when they raise their hand and say, "I love this lifestyle. I either want to trade up or trade something out or I'm new to the industry." Our pre-owned strategy gives us a very smart and intelligent…

Our next question is from Bret Jordan of Jefferies. Please go ahead.

This is Ethan Huntley on for Bret. Could you maybe just talk about some of the trends or maybe the cadence you're seeing in the service segment? I know you mentioned things were trending pretty positively with a greater installed base, but sort of any color on the cadence of that business?

Yes. One of the Achilles' heels of our industry and I guess, furthermore our own company, is, when that installed base grows at the rate that it has and people don't leave the space, they stay, they stay, they stay, we have a real, I would call it, a problem in our industry. And I know that I shouldn't use words like problem, but we have more consumers who love the lifestyle and want to use their product because it's so affordable to do, compared to everything else out there, that we don't have enough days or enough technicians to meet that demand. Our demand for repair, service, collision, renovation, new couches, new floors, new roofs, new awnings, reconditioning, warranty work, customer pay work, new tires, and I'm sorry to keep rambling about all the new things, is so significant that we can't even swallow it ourselves. And what has started to happen more recently that is positive in one sense and giving us a greater focus on where we deploy our capital in another sense, is that other dealers don't seem willing to service the customers that they're selling. A good chunk of the customers that show up on our doorstep, didn't even buy from us, and that's probably because of the strength of the Camping World name or the confidence they have in Good Sam, but it's creating a real bottleneck for our own customers. And so as we look at our capital allocation over the next several years, part of what's driving us to put 40 stores on the map is a disproportionate amount of service days compared to retail square footage that those days -- those new stores will take on. Historically, we built the store with 10,000 square feet and 12 days. We're now building…

That's very helpful. And then maybe just as a follow-up here. I think the current RV IA forecast for '22 shipments is about 590,000 or so. Do you think that's still about where things shake out? Or is that -- do you think that's maybe a little bit on the high side?

We better hope not. We think, that number better be at least 50,000 to 60,000 less than that. At least, 50,000 to 60,000 less than that. But again, we know that we're dealing with sophisticated and very smart management teams at those respective manufacturers, starting from Lippert on the supply side and Patrick, all the way up to the finished manufacturer with Thor in Winnebago and Forest River. We are confident we're dealing with smarter people than even us in predicting those models. We just hope that they are putting those things into practice.

Our last question is from Gerrick Johnson of BMO. Please go ahead.

Great. Sorry, I was disconnected for a moment, so if you answered these, just say 'pass'. I'm curious on unit ASPs, the increase you saw there, the proportion that was mix versus price increase. And then I have part B to that.

I'm sorry, just to clarify, you were asking about the ASPs?

That's correct. And units.

And we've continued to see a little bit of an increase here sequentially from last quarter to this quarter. But given that our mix around this time of year in April, May timeframe, we start to sell a heavier density of towable units. You start to see that average sale price start to level off a little bit more. And furthermore, as we continue to put that emphasis on used units, which the ASP on used is going to be lower than a new unit, we think that's relatively sustainable here for the next quarter, where we don't see much of a material change from quarter-to-quarter.

Yes. One thing for clarifying point. On the new side, okay? On the new side, Matt has laid down a mandate with his team that he wants to see a mix to lower-priced units, particularly in light of what's happening in the macro environment, right? We want to continue to make sure that we make camping more affordable for people than anybody else. On the used side, however, we are playing a little bit different game that we've played in the last 24 months because we're not heavy on the new motorized business. In fact, we really don't play much in the diesel business. We are going after because there are still some supply constraints on the new motorized side, we are playing in that used motorized business. And that is what has contributed not necessarily to the gross profit margin of our used business but the gross profit dollars of our used business. And so we want to bifurcate those two and look at the ASPs in new, one way, and used, another way, and we'll continue to provide color. But the way I thought about it for my entire life, is that the more you can drive down ASP, the more you're widening the funnel to the addressable market. And the more you can make financing affordable and available to consumers, you're widening the market. I do not believe that a consumer makes the decision to not buy an RV for $159 a month to take vacations and enjoy the outdoors with their family. That's something that feels so discretionary. I don't think they look at it as the luxury good. When you look at the cost of airlines, the cost of hotels, the cost of theme parks, the cost of doing a lot of other things, $159 a month, or essentially, $5 a day is still cheaper than a gallon of gas. And the primary product that we sell, towables, don't take any gas. The tow vehicle does. But when you look at the distance that people drive to go camping, 25, 50, 75 miles max, this isn't the days where people are just full timing and traveling all over the country. People have, households have mostly two working incomes. And they're camping on the weekends, which means they can't go that far. So we see consumer credit tightening as a potential impediment, interest rates as a head scratcher. But if we drive down ASP and we have a good used offering, we're providing enough of an alternative. So that's how we think about ASP, new separately from used.

All right. But Matt, I was kind of thinking year-over-year, not sequential. And just for reference, whenever we as the sell-side ask questions ask questions, we're usually asking year-over-year. But year-over-year, you're up 15% in new ASP and 30% in used. So I'm wondering there, you see your mix shifting to more towable so that should bring your ASPs down on mix. So are we seeing that on a consolidated basis, you put it together? ASPs are up, what, 17% year-over-year, so is pricing up 20% mix, bringing it down a couple of points. Or how should we think about mix versus...

Well, I brought up the sequential element of it because that was far more relevant, compared to year-over-year, given that just about every industry has seen price increases across the board. So you're in that range with that 20% suggestion of invoice price increases year-over-year, which we've seen that quarter-to-quarter, that ASP, as well as if you start to back into the same-store new unit versus some of the other factors in the supplemental data, you'll see the average rough COGS associated with these assets has also continued to go up that same amount. So yes, we were able to yield a greater gross margin as well, or GPU, but that ASP has come up year-over-year. We don't see that, though, changing much here from quarter-to-quarter now. We feel like the biggest price increases transpired over the past couple of quarters, especially.

Okay. Great. And then cadence of retail during the quarter, Matt, you mentioned adjustments in February. I guess, that coincides with the invasion. So how did you see things starting off year-over-year? And then, how do you -- how they transitioned through the quarter? And if they did downshift in February, did they pick back up again in March?

February started out actually relatively well, where it was around that time, about the second, third week in February, we started to see a bit of a slowdown year-over-year. And then heading into March, we saw a little bit a bigger difference, in terms of a decline, year-over-year. Heading into April, it's been roughly about the same, compared to March. And then, as we're heading into May, we actually feel very good about current sales volume year-over-year. So we'll continue to monitor this and make modifications to our strategies to ensure that we are capturing demand that exists out there. And by the end of the sales season, we're confident that our inventory levels will be in a very good position, based upon whatever retail sales volume will transpire here over the next three or four months.

Okay. Great. And since I'm last, I think I'll throw one more in there for the benefit of the group here. Now that you have about $10 million per location RV inventory, that's about double from last year's 5.5. If you adjusted for ASP, maybe 55% higher. So a big increase in. Understanding, if not all spread like peanut butter, where might you still have holes in your inventory? Where might you be a little bit heavy?

I don't think we have any holes in our inventory today and where we believe that we are heavier than we would like to be, but it was strategic in terms of bringing that forward, was on the entry-level travel trailer side. That's from my perspective. I don't know if, Matt, if you want to add some color to that.

Yes, I think you are on right information. However, within the motorized segment in particular, there's still a little bit of opportunity for us to be able to supplement some of our inventory there to capture a little bit more of the market. But we also know that motorize only going to account for about 12% of the total amount of units sold annually. So we feel like we've covered the mass production of the marketplace and the mass retail volume.

And used helps us fill that void.

Correct.

Okay. And to keep it in Marcus terms, I probably want to know what motorized would be as a percent of gross profit dollars, but we can talk about that later.

Okay, guys, thank you very much for joining us on this call. We look forward to getting back to you on our second quarter results. Thank you so much.

Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.