Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Camping World (NYSE:CWH) and its peers.
Buying a vehicle is a big decision and usually the second-largest purchase behind a home for many people, so retailers that sell new and used cars try to offer selection, convenience, and customer service to shoppers. While there is online competition, especially for research and discovery, the vehicle sales market is still very fragmented and localized given the magnitude of the purchase and the logistical costs associated with moving cars over long distances. At the end of the day, a large swath of the population relies on cars to get from point A to point B, and vehicle sellers are acutely aware of this need.
The 4 vehicle retailer stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.1%.
Thankfully, share prices of the companies have been resilient as they are up 8.7% on average since the latest earnings results.
Camping World (NYSE:CWH)
Founded in 1966 as a single recreational vehicle (RV) dealership, Camping World (NYSE:CWH) still sells RVs along with boats and general merchandise for outdoor activities.
Camping World reported revenues of $1.41 billion, up 3.6% year on year. This print fell short of analysts’ expectations by 1%, but it was still a very strong quarter for the company with a solid beat of analysts’ EBITDA and EPS estimates.
Marcus Lemonis, Chairman and Chief Executive Officer of CWH stated, “We made the commitment at the beginning of the year to sell more units and make more money. Our results reflect a material year-over-year improvement in adjusted EBITDA, increasing nearly 4x vs. the prior year, with another period of record new and used combined unit market share. We have not seen any discernable impacts on consumer behavior from tariffs, with our April-to-date same store unit sales tracking up mid-teens on used and up high-singles on new. Through recent actions to lower headcount and optimize our footprint, we expect SG&A reductions to further improve profitability in the months ahead.”
The stock is up 27% since reporting and currently trades at $17.90.
Is now the time to buy Camping World? Access our full analysis of the earnings results here, it’s free.
Best Q1: America's Car-Mart (NASDAQ:CRMT)
With a strong presence in the Southern and Central US, America’s Car-Mart (NASDAQ:CRMT) sells used cars to budget-conscious consumers.
America's Car-Mart reported revenues of $370.2 million, up 1.9% year on year, outperforming analysts’ expectations by 7.8%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
America's Car-Mart scored the biggest analyst estimates beat among its peers. The market seems unhappy with the results as the stock is down 11% since reporting. It currently trades at $51.41.
Is now the time to buy America's Car-Mart? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Lithia (NYSE:LAD)
With a strong presence in the Western US, Lithia Motors (NYSE:LAD) sells a wide range of vehicles, including new and used cars, trucks, SUVs, and luxury vehicles from various manufacturers.
Lithia reported revenues of $9.18 billion, up 7.2% year on year, falling short of analysts’ expectations by 2.1%. Still, it was a satisfactory quarter as it posted a solid beat of analysts’ EBITDA estimates.
Lithia delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 12% since the results and currently trades at $332.19.
Read our full analysis of Lithia’s results here.
CarMax (NYSE:KMX)
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.
CarMax reported revenues of $7.55 billion, up 6.1% year on year. This number was in line with analysts’ expectations. It was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA and gross margin estimates.
The stock is up 6.9% since reporting and currently trades at $68.75.
Read our full, actionable report on CarMax here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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