Ladies and gentlemen, good morning, and welcome to the Camping World Holdings' Conference Call to discuss financial results for the first quarter of fiscal year 2024. [Operator Instructions] Please be advised that this call is being recorded and the reproduction of the call in whole or in part is not permitted without written authorization from the company. Joining on the call today are Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President; Karin Bell, Chief Financial Officer; Matthew Wagner, Chief Operating Officer; Lindsey Christen, Chief Administrative and Legal Officer; Tom Kim, Chief Accounting Officer; and Brett Andres, Senior Vice President, Investor Relations. I will now turn the call over to Ms. Christen to get us started. Please go ahead.

Thank you, and good morning, everyone. A press release covering the company's first quarter 2024 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 our business plans and goals, industry and customer trends, inventory expectations, the expected impact of inflation, interest rates and market conditions, acquisition pipelines and plans, future dividend payments and capital allocation 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 2024 1st quarter results are made against the 2023 1st quarter, unless otherwise noted. I'll now turn the call over to Marcus.

Thanks, Lindsey. Good morning, and welcome to our 2024 first quarter call. On today's call, the team will cover both the operational and financial highlights of the quarter while providing comments on the exciting future ahead. As we entered the quarter, we had very specific targets to execute on, gaining market share on new while improving year-over-year margins. the recalibration of our used inventory levels driven by the unparalleled reduction of new pricing, open up 14 new locations and eliminate nonperforming assets. The double-digit same-store sales momentum and market share growth during both the first quarter and the second quarter to date, improves our thesis around demand and its interdependency on lower-priced units, essentially affordability. We continue to feel strongly about driving our efforts towards the intersection of strong demand and affordability. We expect the average selling price of new units in our company to be at or below $38,000 and could see flexibility up slightly once interest rates retreat in 2025. Consumers ultimately build their monthly financial models around monthly payments. So in addition to change in mix and average selling price, we continue to be successful in working with retail lending partners in a higher rate environment to provide intelligent and thoughtful solutions around financing. This strategy has led to delivering another successful quarter, both in finance income and product penetration, which ultimately enhances the total gross profit per unit. In working to achieve our 2024 earnings growth, we identified the need to continue to eliminate underperforming or noncore assets. Through the quarter, we have sold 1 RV dealership location and signed a definitive agreement to sell our furniture manufacturing business. These moves are not only unleashing locked up capital, but have evolved in 1 case into a holistic strategic partnership that we believe will provide material sales…

Thank you, Marcus. As mentioned, we are experiencing meaningful new unit sales growth to start the year, with same-store new units increasing 16% and momentum continuing through April. Our new unit trends are significantly outpacing the broader industry. resulting in material market share gains in both January and February based on the most recently reported stat survey information. We attribute this performance to our intentional and disciplined inventory management, supporting our previously stated thesis that lower-priced RVs are highly elastic good. Today, we are sitting with less than 3,800 model year 2023 continuing to significantly outpace the industry with almost 90% of our new inventory and current model year 2024s. We sold nearly 16,900 new units in the first quarter, an increase of over 20%. As we move throughout the year, we anticipate that new average selling prices will hover around the $38,000 range. Against this backdrop, we maintained a regimented approach to procuring used inventory having purchased 60% less used through the first 4 months of this year. As we sit here today, we have 35% fewer used in inventory compared to last year. We largely did this because the used RV market lacks the infrastructure and institutional participation needed to create an efficient market. We responded to this need and we launched CW auctions in December. We witnessed immediate interest from consumers, wholesalers, banks and manufacturers alike. Over the course of the last 5 auctions, we amassed over 2.2 million unique views and hundreds of unit sales during the soft launch period. As this business matures over the coming quarters, we see this serving as a profitable, cost-effective remarketing channel that has never existed in this industry at scale, allowing for greater use procurement flexibility while improving the velocity of our sales. We continue to expect our used volumes to improve over time as appropriately valued inventory is intelligently brought back into the system. We expect our used margins to improve sequentially starting the second quarter and to normalize to historical levels by the fourth quarter. As part of our growth plan for 2024, we'll continue to focus on expanding upon the tremendous progress that we have made with Good Sam service, our used RV business, all while focusing on market share growth of new RVs and continue to add accretive acquisitions to our dealer network. We opened 13 net dealership locations in the first quarter, 5 of which were manufactured exclusive locations, and we plan to continue to remain acquisitive with the goal of growing our store count to 320 stores by the end of 2028. We I'll now turn the call over to Tom Kirn to discuss our financial results.

Thanks, Matt. For the first quarter, we recorded revenue of $1.4 billion, a decline of roughly 8% from last year, driven primarily by used unit volume, while new vehicle revenue of $656 million marked the first year-over-year increase in 6 quarters. Our Good Sam Services and Plans segment continued to post record quarterly gross profit of $30.5 million. Within our products, services and other revenues, our core service revenues showed continued growth, while product sales declined primarily due to lapping our active sports restructuring from last year and lower retail attachment due to fewer used vehicles being sold. Our adjusted EBITDA for the first quarter was $8.2 million, with the primary drivers of the year-over-year decline stemming from used vehicle gross profit pressure. About $10 million to $20 million of which was related to rebalancing age of used inventory, as Matt mentioned. We also incurred a couple of additional expenses worth highlighting, including new store and auction start-up costs as well as professional fees that represented approximately $7 million of impact to the quarter. As we remain focused on extracting additional value from certain noncore and underperforming assets and returning cash to our business. On the balance sheet, we ended the quarter with about $177 million of cash, including $148 million of cash and the floor plan offset accounts. We also have about $220 million of used inventory net of flooring and roughly $219 million of parts inventory. Finally, we own about $116 million of real estate without an associated mortgage. Marcus?

Thanks, Tom. Our strategy and execution is keeping us well ahead of our competitors, and the trend lines are clear. We expect 2024 to be a much better year. I'd like to turn the call over now to the operator for Q&A.

[Operator Instructions] Our first question is from the line of Joe Altobello with Raymond James.

I just want to start with demand. Have you guys seen any improvement as the spring has progressed overall? And how did your new unit sales on a same-store basis look in April?

We continue to see demand, Joe. And what hasn't been the problem for our company is demand. What has been the problem, I think, for our company in the back half of '23 and probably for the industry is really this affordability factor, which is why at the beginning of the year, we were very vocal about driving down these ASPs to find the intersection with new interest rates at a payment level that was affordable. So we have no demand problem. What we were struggling with was a conversion problem, which is why we made this really heavy pivot into lower-priced units so that we can gain market share. April has continued to perform double digits on a same-store basis on new and quite frankly, we don't expect that to slow down. Now as we go through the balance of the year, we think that there's an opportunity to continue to accelerate that but we need the macro to help us a little bit to get to where we really want to get to. As you know, the macro has been pretty tough for the first 4 months. So we're really proud of our team and the positive results, particularly, I think, in the month of March -- or excuse me, in February, we recorded the highest market share in the history of our company.

Very helpful. And just on the affordability issue in terms of pricing, it sounds like you don't think we need a further decline on [ invoice ] prices on new RVs next year. Maybe talk about the thinking on that.

Look, I always would love to have lower prices because lower prices means that the funnel is wider. But I don't anticipate any time soon that we're going to see any material movement of the '24 pricing. I want to make a finer point about that, though, because as we finish the back half of 2023, we still internally had a lot of uncertainty around where invoice pricing would settle. We did a great job of negotiating like-for-like pricing down on '24 models, but we were still feeling a little flat-footed on could that continue to decline. That is why you saw us pull back so feverishly and so disciplined on our procurement of used. And when you look at the used results for the first quarter, I want to make sure that people hear me loud and clear that there is no issue with RV demand on used units. We made the conscious decision to not put the shareholders' money at risk by investing in assets while we believe there was potentially still a falling sort. Now that we feel more confident that the pricing on new units have relatively stabilized. And that doesn't mean they couldn't go up by a percentage or down by percentage. But no violent moves up or down that would cause our used inventory to be out of whack, we will start to step on the gas again probably around the middle of May and slowly and cautiously start to ramp back up again as we get back to levels that we believe we need to have in stock to meet our sales goals. So when you look at the overall financials, we want you to not be alarmed by the drop in used sales because it is not a function of a drop in demand. it is a function of us carrying materially less than we did a year ago, and we think it was prudent, and us deciding to take a lot of pain in Q1 and a little bit in Q2 as it related to our used margins so we can rightsize our inventory. We never want our shareholders to feel that we're holding on to assets that we don't really feel strongly about the value. So we made that aggressive move.

Our next question is from the line of James Hardiman with Citi.

So Marcus, you already talked about sort of timing surrounding the model year -- or not timing, pricing surrounding the model year '25, but maybe delve into just the broader landscape surrounding that model year changeover. It feels a little bit like Groundhog Day yet again, as we sort of brace for that changeover the timing of the release, is there any chance that, that might shift or not? And just any wrinkles that you think that's going to bring along, particularly how much dealers, maybe some of your peers are sort of holding out for the '25 and whether or not there's going to be enough inventory between here and there to satisfy retail demand?

Yes. I mean, that's something that we're thinking about every day. One of the things that we are concerned about, and it definitely went into our used thesis is, unfortunately, the number of 22s and aged inventory that is sitting on our competitors' lots. And there seems to be gridlock. And that was the gridlock that we told all of you, both in the Q4 call and in our investor conferences that we were unwilling to participate in. We were going to take whatever financial pain on a short-term basis that we needed to. We don't believe that every dealer has necessarily taken the steps to do that. So that's probably why you see us a little tepid on leaning into use because we don't know if there's going to be some surplus of 22s that could be out there in a foreclosure or liquidation scenario. We believe that the manufacturers have been very intelligent and very smart and listening to the dealer body around the rollout of 25s. And we're anticipating probably a late summer, July, August start on 25s. For the most part, there may be a few motor home manufacturers in very small scale that start to leak out some 25s. This idea that our competitors are sort of waiting to buy 25s, I sure hope that nobody is running their business that way because they're going to miss an entire selling season. And that entire selling season is going to lead to a lack of cash flow, a lack of margin and continued aging on their part. And when you look at shipments, we still do believe that shipments and retails are going to be in the $335,000 to $345,000 range. So we could be off by a couple of thousand, but that's kind of where…

Just even further add to that, James, to speak more directly about the model year changeover. I believe that motorized model year 2025 will start to hit the market slowly here over the coming months, actually beginning this month, and we'll start to accelerate here over the ensuing months. Motorized, however, have never necessarily been the issue in terms of aged model year units. Rather, towables could potentially for the future, but we believe that we've managed our inventory very effectively. We believe that the model year 2025 towable units, both travel trailers and fifth wheels will at least turn over and start to be produced in July, but there won't be meaningful amounts to them really hitting the marketplace until maybe October, November, December time frame. And when we think about where we were at this time last year, we're at least 1,000 units better in terms of the aged model removal. So as I take a step back and look at how we played this game and even be very direct about the wholesale shipment numbers that came out recently, if I'm not mistaken, the travel trailer segment was up about 10,000 units. And that's really where you saw the most material gain -- just to be clear, we were up over that same time period in terms of wholesale shipments, about 10,000 units. We've been largely having the foresight to play this game more intelligently than our peer group, and we've been identifying these certain segments, price points that have been turned, which is why we've been picking up material market share. We believe that this thesis will continue to play out exactly as we've suggested through the balance of the year. And as such, we think we'll be sitting in a really advantageous position by September, October to re-up once again and start to play a whole new cycle, whole new game on the news side, while at the same time, picking up the momentum from new and certainly to translate that to the used side. we feel good as we sit here today, but check back, obviously, in the next 3 months to ensure that we're hitting all of our goals.

Got it. That's really helpful. And then obviously, over the last month or 2, the financial markets appear to be pricing in or at least bracing for rates to be higher for longer. Maybe walk us through sort of the RV ecosystem and whether or not you think the various players have adjusted any of their activity as a result of that. I guess, first, starting with lenders, like how have rates trended as of late? And then customers to the April question, did things get a little bit better, a little bit worse in the month of April relative to sort of that 1Q run rate? And then, I guess, lastly, dealers. You guys have made it no secret that a lot of your peers have been sort of unwilling to take their medicine, maybe hoping that they'll get bailed out by lower rates. Any change in that stance?

Yes. I'll start with our own business because that obviously is what matters most. The potential delay, which seems to be more firm than it was a couple of months ago on any rate reductions has a negative impact on everybody because it affects affordability. So we have a lot more wrangling to do our retail lenders, trying to figure out how to make things affordable for people. The unfortunate thing and the simplest thing is, when you look at the rate reductions, and we have been planning on rate reductions in our P&L for the year, and the lack of rate reductions. Unfortunately, for us, something as simple as floor plan interest is going to be $15 million higher than we anticipated at the beginning of the year -- not anything. We have control of not anything that we're doing, but that's $15 million that we have to really work hard to try to find somewhere else. We do believe that the consumer has started to settle in around where rates are. And that doesn't mean that they're accepting it, but they're not as shell-shocked by when all the rates were moving up in 2023 at a really rapid pace, and people just couldn't deal with it. We've had to really pivot our mix -- and I think our mix has really given us 2 benefits: number one, our change in mix in driving down those ASPs has allowed us to find a wider audience. And it's evidenced by our massive, massive market share growth that we've never seen in the history of our business. Secondarily, when you drive down your ASPs and you drive down affordability, you could see in the performance of our finance and insurance business is really, really performing nicely. Had we not driven down…

Our next question is from the line of Scott Stember with ROTH MKM.

Can you maybe talk about the, I guess, the tenor of sales in April. You said that they were still up double digits. Has there been an acceleration on the new side from new units from March into April?

An acceleration, meaning on a percentage of same-store?

Yes or year-over-year, just in general, just what's...

Yes. So I think the answer is we're running at about the same pace, but what is the nuance inside of that is that we had a pretty good April, decent April last year. And so while we're up double digits again in April, it actually, in my mind, means we're even doing better than March because we had a really, really rough March last year. So we were up, call it, mid-double digits or kind of 15, 16 in the month of March, we were coming off a pretty low comp. April was a really good year -- a really good month for us last year on a volume basis. It could have been the way the weekend fell or the days fell in the calendar, we were up against not a terrible number, and we still performed on a double-digit basis. So in our estimation, we either stayed even with March or even outpaced it a little bit on a comparative basis.

I mean, Scott, we oftentimes look week-to-week, and it's consistently through the first 4 months of the year, oscillated between high single digits to 20-plus percent week-to-week in terms of our year-over-year gains. That's actually the cleanest way to look at it. And through the balance of the quarter, it all just shakes out.

Got it. And then on the products and services side, if you were to back out the furniture business and the discontinued active sports business, what is just pure service parts and service. You said it was -- it sounded like in your prepared remarks, it was going quite well. But can you just give us a flavor of how that business is doing?

Yes. So we look at our parts and service business in 2 distinct categories. Our external work, which is when we're taking in customer pay work, which is up nicely over a year ago. That's always, by the way, a great bellwether for the health of the industry is are people coming in, booking appointments, getting repair work, our customer pay, which is actually not provided by us internally. Our customer pay work is up over last year. Our internal work, that's the work that we do to repair trade-ins or purchases that we make is down, but it's down because we elected not to go out and procure a year's inventory. We could have easily manipulated that number by chasing used inventory, buying things we shouldn't be buying and that number would have looked good. So we know that when the used business is down, we know the internal work is down. When the used business is up, the internal work subsequently goes up. But we determine the health of our overall industry and our company based on how customers show up to actually give us currency to repair and replace things on their units. So we feel very good about that indicator.

Got it. And then just the last question. It seems like you're looking for lower retail sales for the industry this year. Is that changing your view of Camping World's ability to sell more units at retail this year? And also, I think last quarter, you gave just some EBITDA growth expectations. Is there an update on that?

Yes. I wouldn't call them expectations. I would definitely call them goals. Our goals haven't really moved. We know what we need to do to deliver value to our shareholders. We're facing a few more headwinds that we didn't anticipate that have nothing to do with us, like the fact that the rates aren't going to drop or the fact that the macro isn't that good. But Matt and I, along with Tom and Lindsey and the rest of the team have said, okay, we have to figure out what other pivots we have to make. If we can't control certain factors in the marketplace, there are things we can control. So we have to be very prudent about how we're opening stores and how we're thinking about that. As a small example of that, we have 2 stores that are ready to open. The stores are built, they're ready to go. We have elected to push those off to the end of the year or the first of next year because every single choice that we make has an impact on the bottom line. And we have a goal of achieving that, our own goals we don't want to do anything that's going to put those goals in jeopardy at least in the areas that we have control of. We expect our sales, Matt at and even just to hopefully rely largely upon that stat survey information, I think we've proven that we could buck the trend of the larger industry. So regardless of what's happening, we feel like we've hit the goals that we set forth and broadly proclaim that we're going to hit double-digit new same-store sales. And we're going to continue to experience growth in that new same-store number heading into the back half of the year. I believe, pretty material growth based upon how we played our hand with our inventory procurement.

Got it. That was great.

We wouldn't mind if they dropped the rates a little bit. We could use a little interest expense relief for sure.

Our next question is from Noah Zatzkin with KeyBanc Capital Markets.

Not to put too fine a point on this, but in terms of kind of the 30% adjusted EBITDA growth goal for the year, working towards that, has anything changed in terms of the calculus to get there you noted expecting around the $38,000 level on the new ASP. And I think used margins came in a bit stronger than I was expecting. So just wondering how you're kind of thinking through kind of the new and used businesses maybe relative to a few months ago as you kind of work towards that goal?

Yes, I think that's a great question. Our goals remain the same, but variables have been thrown in our face that we're having to sort of reach into our rabbit hat and try to find new opportunities. The interest rate expense on the floor plan piece is a real number. I mean, it's $15 million. It's not like maybe it will happen. It's just factually correct. I think secondarily, had interest rates started to drop, we may have experienced -- we all anticipated that maybe by summer, something would have pushed. We now have taken any interest rate cuts out of our calculus entirely. And that's putting a little bit of pressure on ASPs. And as ASPs get pushed down, because we want to drive market share, that puts pressure on the overall GPU on the front-end side. While we can make it up on the back end if it's a $40,000 ASP and the margin is x or it's a $37,000 ASP, and it's the same margin percentage, there's just less gross dollars available. So that's put a little bit of pressure that we're having to sort of work around. I think the other piece is, we're not going to take our foot off the gas as we've seen the positive results in continuing to rebalance our inventory, and we will have continued pressure on the used side, both on margin and in demand here in April, and it will extend over into May. And that's something that Matt and I have looked at and said, we're going to take whatever pain people are going to give us, but we know if we own this business, just the 2 of us, we would be doing this because it's the right business decision. And we've seen the fruits of that. And I think him and I have gotten really excited by when you make these really conclusive decisions to drive ASP down, and you see the results, it becomes like a drug, you want to chase it some more. When you make the tough decisions to get rid of the use and to rebalance and you see the positive results. you want to chase that some more. We want to do the things that we think we would do if it was just us, and that's how we're running the business. And we know that optically, the results don't necessarily reflect where we want them to be or other people want them to be when you see market share growth, when you see us hitting our other goals around Good Sam, when you see us hitting our internal customer pay work, when you see the F&I results, we hope that you feel as good as we do about those results.

I mean I couldn't be more proud to of how we managed through the used portfolio. And that was perhaps the biggest variable that threw a rent into some of our plans in the short term. We're being down on -- to the tune of 60% of used procurement through the first 4 months of the year with something that wasn't necessarily in our calculus. We believe that it was the right play for our company, for investors knowing how risk-averse we were in a relatively volatile segment in that short term, while there was for the first time ever in our history is in industry deflation of new invoice prices. Now that, that market has stabilized on the new side, that's directly impacting the used, which gives us a clear focus and a clearer path whereby we could start to ramp up procurement. But as Marcus said earlier, it's going to take us until about mid-May for us to really get this machine ramped up again and to start to target those segments price points that we know are going to yield the highest return on investment.

And it isn't because the machine isn't ready to rev. It's because him and I kind of wake up every morning and we're like, are we there yet? Should we just wait a little bit, let's test it in this market. And Matt has been the absolute genius in setting up this auction idea, and we're excited. We'll be glad to post a link on maybe even our investor site just to show people what this auction process is looking at. We've had both in-person and virtual auctions and we were just in the early stages of testing it. We only ran 500 units, plus or minus through the auction process. We had dealers, consumers around the country flying to places to see it. There is no market maker for the RV industry. And we believe for the growth of our new business, because we need to be able to take in a creative blend of trade for the growth of our used business, we have to firm ourselves up between our Good Sam RV valuator and our CW auctions, we now believe we will become the market maker on establishing used values. When you control 20-plus percent of the new side and you control the largest portion of the used side, and you can create a market through this open, independent process, you now start to establish yourself as the authority. And that is really the investment that we spent. We spent about $7 million launching the auction process in the first quarter. We know that, that $7 million is a very, very small price to pay to become the market maker in the industry.

Our next question is from the line of Mike Swartz with Truist Securities.

Marcus, I just wanted to follow up on the CW Auction business. I guess, just curious of what spurred that decision? And maybe within that, how much of an investment are you making? I think you said $7 million in the first quarter, but if we think about that just on an annualized basis, how much are you planning to spend there? And then what are the -- I guess what does the economics look like within that business as it pertains to Camping World?

So Mike, let me take a step back. And the impetus behind auctions was to enable us to procure more used assets. In some respects, site unseen when I say like virtual, we could take pictures, we could basically explore the assets but we had no idea what it actually smelled like. There are some fine or 2 details that require someone actually to go out there and inspect the asset. We could never quite figure out a way whereby we could buy more assets, site unseen, but all flowed in case we made a slight mistake. And really, that's representative of an efficient marketplace in a free enterprise environment within the used side of the business, which has never existed. So we have largely been a bit timid from a centralized perspective to buy too much because we didn't want to make too many mistakes. The auction concept really strung out of that. And that's what we've been working diligently for the past couple of years to figure out, okay, how do we centralize more function of used procurement while at the same time knowing that if we step into something and unfortunately make a mistake here or there or if we want to just allow more assets to be run through the market to procure more information and actually start to set more accurate market day supply pricing of all the used marketplace, we knew that the auctions needed to take form. Through this process, we've learned a tremendous amount and in a lot of ways, we've had to build the market and prime the pump for this marketplace, which is why these are largely just upfront onetime costs that we referenced with the $7 million. This is not going to be an annualized expense. Rather, we view…

One thing to keep in mind, it is acting independent of our dealership operations so that we truly believe that the values are not contaminated by any influence other than whatever the free market provides. And when we run our own units, we adhere to that free market principle. And so when you look at the losses, some of those or us taking some of those losses through the auction, some of it was the cost to stand it up. But just to reiterate, it is not $7 million on an annualized multiplied times 3 more quarters of that, you should not expect that at all. We feel like we've gotten it down to a bit of a science, and we've taken kind of the big steps that we needed to, to launch it.

Okay. That's extremely helpful. I appreciate that. And what are the -- I guess, the second question is just on your expectations for new door additions. This is always kind of a difficult thing for I think most of us to model just in terms of timing. And I think you've given us some framework for how many doors you expect to open this year, but it sounds like you may have put some of those on hold or delayed some of those just given some of the macro considerations out there. But any way to think about just from an updated standpoint, how many doors you expect to open this year?

Yes. So we opened 14 already. We did mention that we sold 1 location. We actually sold that location, I think, for around $3 million. It was much more than we had in that transaction. So we netted to 13. We have 2 more stores that we expect to open internally by year-end, potentially 3. And then as always, we're always looking for opportunistic acquisitions. As we look at the landscape of dealers who potentially are sitting with more inventory than they would like to were always a great source. We did fall off a number of deals that we had contemplated. And we didn't fall off because of anything internally on our side. We fell off because through the diligence process, they didn't meet certain standards, and they weren't willing to do the things that we felt were necessary to receive our money, quite frankly. We are not in the business of just adding doors. We are in the business of being accretive in our acquisitions, which means I'm not going to pay much and we expect to get a lot out of it. And anything absent of that, we're not interested in. So we -- I would expect that we'll have no less than 17, potentially 1 or 2 more than that. But we could turn around in the fourth quarter and see a dilution of opportunities and capitalize on 4, 5, 6 of them. We're not going to do anything that's going to flex our own business or put our own balance sheet at risk or put our own human capital at risk for anybody or anything.

Our next question is from the line of Bret Jordan with Jefferies.

On the Good Sam continuing to explore alternatives comment, I guess it sounds like you're also simultaneously expanding the business into things like marine. -- should we expect that, that's going to sort of push back the alternatives that you're pursuing there as you develop more of the in-house strategy?

No. I think what happened was when we talked about this internally before we disclose it to the market. We have a unique relationship inside of our company between our Camping World management team and our Good Sam management team. And Matt and I are always put in the middle of that like 2 parents. And the Good Same team wants to do certain things and the dealership team wants to ensure that they're not being compromised. And we kind of just put everybody in their own corner and said, "Look, you're chartered and you're incentivized financially to run your business." And the response from the Good Sam team is, "Well, great. Let me go run my business." I understand that you're not in the boat dealership business, but that doesn't mean that I can't go explore the recreational landscape. We have the policies, we have the process, we have the relationships with the vendors. So we have given -- Matt and I have given permission to the Good Sam team to grow their business in ways that they believe are going to be financially accretive to the business. And if they choose to get into the boat warranty space, which they're getting into or the power sports space, which they're getting into, it really is none of Camping World dealership business. And I think historically, we try to keep everybody happy, and we were probably holding that business back a little bit. Now that's a long maturation process. But while that's happening, we'll continue to explore ideas. And as everybody knows, that was very matter of fact in the first quarter that I have a certain perspective on what I think the value of that business is, the $100 million contribution in 2023. And I don't believe that the market properly recognizes the value of that business. I put a marker out there and shockingly enough, the inbound activity that Goldman received from that statement that we made was surprising and pleasing. At the same time that we explore those ideas, the Board wants to understand how does that work with the database? What happens with a variety of questions? And we will get the board all of those answers over the next several months. but it doesn't mean that Good Sam management team has to wait to pursue their initiatives, to pursue their path at the same time. So we see those as parallel paths. We obviously are focused right now on growing our business. And so Goldman is handling that process. And if something interesting comes up, we'll present it to the Board. We'll look at all the options. We'll see if it makes sense for the shareholders and we'll make a decision. But at this point, we're still exploring it.

Okay. And then you also commented on a new aftermarket supplier agreement. Is that changing your strategy around the aftermarket side of the business? And I guess who is the agreement with or is it at scale?

Yes. So we believe -- as we looked at our retail business, and retail is a dirty word. But as we look at our parts and aftermarket business, which is a foundation of our stores, the Camping World brand, we really thought to ourselves, we have to kind of reset, we have to reset how we're approaching the market. We have to reset how we're deploying money and inventory. We have to reset our partners. Years ago, we made the acquisition of a furniture business. They were manufacturing furniture and we were selling it in the aftermarket space successfully, and we were selling it directly to OEMs. And we have a very, very good relationship with Lippert, which is a very dominant force outside of frames in the aftermarket, with Furrion, with Solera, with CURT hitches and when we look at wanting to minimize our risk in that business and enhance product development, product rollout and all of those things. we ended up signing a definitive agreement to sell our furniture business to Lippert. As part of that consideration, we entered in -- we're going to enter into a supplier agreement that gives us the proper pricing for giving them the proper amount of business. So we see margin expansion there for us and for them, and we have an opportunity to earn additional rebates based on our performance. I believe that an acute focus with a small number of suppliers, Lippert being one of them, Airxcel being one of them, LKQ being one of them, is going to put a hyperfocus on the product assortment that we have in our stores. Ultimately, we need better returns in that business, and we need better margins. And we believe that, that's going to happen. We will take on an entire reset…

Our next question comes from the line of Brandon Rollé with D.A. Davidson. Brandon Rollé: Just piggybacking on the supplier environment right now. I think back in 3Q, you had talked about wanting a diversification of sourcing within the industry. Could you update us on kind of what you've seen over the past 6 months? And in terms of maybe new suppliers entering the market and maybe having a say within the model year '25 bidding process?

Are you talking about on the aftermarket side or on the RV manufacturing side? Brandon Rollé: On the RV manufacturing side?

Look, Brandon, we continue to work and develop products with THOR, Forest River in Winnebago. And I think proof of our effectiveness in doing that is what has resulted in what's happened with Coleman. Many, many years ago, Matt and I decided to -- I think it was actually maybe 10 years now, we decided to get into the Coleman licensing business. and we went down to Wichita, Kansas, and we did a deal with Coleman and we connected Coleman and THOR and us together. In the first quarter, it appears at least through January and February that Coleman will be the #1 selling travel trailer in America, period. And by the way, that product is only sold by us. And so our ability to influence the way things are made or the design or the engineering is probably stronger than ever, not because we have a heavy hand but because we have a lot of data. And that data is very useful to manufacturers. So whether they're looking at repair records or whether they're looking at churns or whether looking at ASPs or whether we're looking at innovation, we do have a significant influence but that influence over the market isn't something that only we benefit from. In order for our company to meet our goals, which is to be in excess of $10 billion, $12 billion of revenue, we need the TAM of the overall industry to grow. And the only way the TAM of the overall industry growth is that the industry is healthy. And the way that it becomes healthy is that we use our data to make it available to everybody. Here's what we have. Here's what we know. And I think this idea of everything having to be proprietary in some cases, applies. But in other cases, if we want the industry to manufacture and ship and sell 750,000 units we have to share some of our secret sauce so that the industry as a whole is more successful. And whether that's working with Lippert to develop better ways to do hitching or working with Lippert to do other things or working with THOR between Airxcel and Keystone or JCO, to develop more innovative products or working with Forest River. Whatever it may be, we have a duty and an obligation to grow the overall industry. because we're primary benefactors of that.

Our next question is from Tristan Thomas-Martin with BMO Capital Markets.

I think last quarter, you said 25 to 30 new dealerships by the end of the year, now it's 13. Is that just due to falling off some deals? Or did something else change there?

No, we didn't say 13. We've already opened 13 as we sit here.

No less than 17.

What's that?

You said no less than 17.

Yes, you said 13. So we've opened 14 since January 1. We sold one, so that's a net of 13. We have 2 to 3 stores that will more than likely open, hopefully, by the end of the year. And that's before we even open the [indiscernible] to look at what acquisitions are out there in the back half. But I'm not going to meet a number by just buying something. We know that deals are brought to us every day and every week. Right now, as we sit here today in May, June and July, Matt and I are focused on 1 thing, and that's crushing our same-store new number and growing our market share. The deals that are out there are going to be out there in the fall, in the winter, and we believe they're only going to get better. So we're not in a rush to have money leave our vault at a level that we believe we could deploy that later and get better. The goal is always going to be to do acquisitions. That's the blueprint of our company from the beginning of time. And whether it ends up being 25 or 35 or 18, it always needs to be smart, profitable and accretive.

Got it. I may have missed this, but how does OEM promotional support in the quarter? And then how has that been trending so far in 2Q?

We didn't really have that much promotional support in Q1, like we did in Q4 of last year because we had taken the bulk of our bath back then but manufacturers have always been helpful, particularly THOR, Forest River and Winnebago have always been helpful in addressing it. We want to always find the balance so. And the balance is, I'm not going to take money if I need to buy more inventory in exchange for it. We don't want to get hooked on that drug or you have to buy something to get something. We want you to help us with the product we bought and it needs -- the period needs to be at the end of that sentence. And then we want to make good inventory purchasing decisions that are separated from that assistance. So we did not have much in the quarter at all, Tom?

No, no, not much at all.

And just as well, we like the manufacturers in a healthy position and continue to maintain and innovate their products just as well. So never do we want to take needlessly, just any sort of promotional support knowing that just as well, we can both be profitable together as we pursue certain price point segments, which we worked very well with especially the 3 entities that Marcus has named already THOR, Forest River, Winnebago, to continue to target those segments.

Yes, one more thing to just point out on top of that, and I think Matt alluded to it. We've also invested and so have they in launching some exclusive locations. And we have, I think how many we have now, total? We just launched 5 within this segment or within the spirits, I think we're up to 8 now yes. So the exclusive locations that we've launched, whether that's Grand Design of Green Bay or Keystone of Northern Michigan or whatever it may be, are performing really nicely. And I think we're learning that the future growth of this business, in addition to Camping World stores, may have cracked the code on a way to have incremental store growth and incremental acquisitions with a lower cost of capital deployed to do those not building out big retail stores. They're not on 20 acres. They don't take on big rent factors. So the true road on those is pretty good. I mean, the return on investment has been pretty spectacular in those areas. And I would expect us to continue to double down on those. The manufacturers are spending some money on that. So when you talk about assistance, assistance from manufacturers can come in the form of training, which they've all been amazing. -- investing in parts and service systems, which they've all been doing, investing in aging processes, which they've all been doing, and investing in this exclusive store concept. We couldn't be happier with the partnerships and the participation that the 3 core manufacturers have provided not only our company, but we believe the other dealers as well.

Our next question is from the line of Alice Wycklendt with Baird.

On for Craig this morning. I think just 1 question. I wanted to dig in on the new margin side. I mean, I think the gross profit dollars came in around 5,400 per unit gross margin percentage just under 14%. It sounds like there maybe weren't any significant transitory factors from OEM support in the quarter. But how should we think about that number through the balance of the year?

I think that this is largely indicative of what we normally see in the first quarter of most years. If you look at pre-pandemic margin levels, so I would suggest then that for the next 2 quarters, probably could bump up around that 15% range, if not a little bit higher, depending upon what that general mix is of inventory. And then generally, the fourth quarter kind of settles in, once again, a little bit lower, but perhaps like 14.5%, give or take.

So to your point, Alice, there was no manufacturer assistance putting that number at 14%. That was true performance. I'm hoping, and I think Matt and I are definitely on the same page about this. As we work through the last [ 3,800 23s ] and sort of shrink that down, that is really what could prop it up to 15%. I think 15% is probably a good number for Q2 and Q3. We obviously still want to take care of the customer. we still want to actually grow market share. And then as you get back into the fourth quarter, it's going to fall back down again because we want to clean inventory going into the end of the year, things are a little quieter. You have to incentivize the customer a little bit more, but we're feeling good about where our new margins are. We always want to have more. One of the downsides of driving ASPs down is even though you open up the dam and you find more people, the total gross profit dollars on the front end when you lower ASPs, even when margins are good, they're a little lower. So hopefully, over time, as interest rates come back down and affordability becomes a little easier those ASPs could start to rise 1,000 here, 1,000 there and get us back to where we think it really should be, which is right around that $39,000 to $40,000 range.

Ladies and gentlemen, this concludes our question-and-answer session. I would now hand the conference over to Marcus Lemonis for his closing comments.

Great. Thank you so much for joining the call. As we continue to deal with the headwind, we want the market to understand that we are very disciplined about our balance sheet. We're very focused on delivering on the results, and we thank you for your support. So we'll see you on the next call. Take care.

Thank you. The conference of Camping World Holdings Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.

So we'll see you on the next call. Take care.