Camping World Shares Drive Up After Earnings Beat Estimates

Camping World rose after the top U.S. retailer of recreational vehicles and related products posted stronger-than-expected earnings and revenue.
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Camping World  (CWH) - Get Report shares rose Monday after the country’s largest retailer of recreational vehicles and related products reported stronger-than-expected third quarter earnings and revenue.

The company has benefited from strong demand for isolated travel and camping during the coronavirus pandemic.

Shares of the Lincolnshire, Ill., company recently traded at $30.18, up 14%. They had surged 79% year to date through Friday.

In the third quarter, Camping World earned $154.8 million, or $1.44 a share, swinging from a net loss of $65.3 billion, or 82 cents, in the year-earlier quarter.

Revenue moved up 21% to $1.68 billion from $1.39 billion.

A survey of analysts by FactSet produced consensus estimates for the quarter of $1.16 a share, or an adjusted $1.10, on revenue of $1.52 billion.

“Coming off of an extremely positive second quarter, demand remained strong,” Chief Executive Marcus Lemonis said in a statement.

“Our ability to focus on fundamentals including maximizing gross margins and maintaining expense controls was key" to the results.

Adjusted earnings before interest, taxes, depreciation and amortization of $217 million more than tripled from a year earlier. The adjusted Ebitda margin was 12.9% for the third quarter.

Camping World’s total leverage ratio under its senior secured credit facilities was 2.3 times at Sept. 30, and it expects a total leverage ratio of less than 2 times at Dec. 31.

Last month, J.P. Morgan analyst Ryan Brinkman upgraded Camping World to overweight from neutral, saying it should continue to benefit as consumers look for a safer form of travel during the pandemic.

He raised his price target to $40 from $30. "With over 100 dealership locations, Camping World is by far the largest player in the fragmented market for new and used RV sales and supplies," Brinkman said.