RV, Marcus Onus, Marcus Lamarcus discussed on MarketFoolery
I do think international growth is probably going to be the powerhouse for growing the number of users, but I think there's still a huge opportunity to make more money per user. And I think that opportunity domestically, it's still fairly untapped. Second quarter profits for Camping World came in lower than expected, sort of the revenue. And when you look at the stock David, it's close to a fifty two week low. How much how much of a world of hurt is Camping World and right now. Well, that's the thing when you actually look at the progress that company is making, they're actually on a pretty good track. They sold a record number of RV's this quarter there on pace for a record year of RV sold in two thousand eighteen. They're continuing to see strong growth with their tool bowl units, which were up fourteen percent. They're saying a lot of young. Her buyers who aren't waiting until retirement to hit the road, but rather starting with some of these less expensive units that you can just, you know, trail. Hook up with a trailer on your existing vehicle. But I think the issue here is that they continue to make some acquisitions to grow their their store base, and that's causing operating expenses to grow at a faster pace than revenue, sir, seeing continued pressure on margins. And I think at this point it's really almost jockey play the CEO Marcus lamarcus. He's kind of a TV star. If you will, on CNBC has a show the prophet where he works with small businesses. I really personally like his approach to to retail and working with people kind of a conscious capitalist type of person. And I think he has a proven track record in the category. But at this point, the company is relying on on debt to make acquisitions by stores in in the short term that does hurt margins because you're hiring more people, you're buying more inventory. But if you're someone who believes in the vision of Marcus onus and his track record, then I would think. This might be a compelling opportunity for investors today. It might be another six to twelve months of some subpar quarters when it comes to profitability. But me revenue is up thirteen percent this quarter. They actually raised revenue guidance for the rest of the year. And if you're a shareholder perspective shareholder, you really just betting that the strategy that Marcus Simona says, outlined make sense. But if you don't really believe in LA Mona's or his strategy of acquiring mom and pop RV retailers or just other retailers out there in lumping them into the Camping World brand, then he'd probably want to stay away from the stock to me, it seems mostly like short termism in the sense that they did miss revenue an EPS estimates this quarter, even though results were strong, they did lower their adjusted EBA outlook for the next year or so. But that's as a result of them reinvesting in what should very clearly produce more prophets later. But it still. Is a bit of a head scratcher to me just over the past couple of years in two thousand seventeen. The stock was on a tear. There was a lot of optimism and then this past year, it's been the exact opposite of that. But if you look at the results is just been steady performance. I dunno data, like, what am I missing like is, is there like like, are there other reasons out there besides just RV sales that people are worried about? I think the issue is last year. The company acquired the gander outdoors brand or formerly gander mountain brand, and they kept about sixty locations of gander, outdoors open. And I think the market and investors were trying to figure out the rationale there. And obviously that led to a huge uptick in inventory and then pre-opening expenses as you're renovating the stores and hiring people to to fill those stores and support customers there. But Luna's has basically said that that was a way for the company to accelerate its. Pension into states where RV sales are huge. So those are states like Wisconsin, Minnesota, Texas, and six others where they represent some of the top RV states in terms of sales. So it's a way for them to accelerate that bring people into their good Sam club membership, which is kind of like AAA for RV. So you get RV support services, maintenance, insurance, things like that. So it's a way for them to build the file and eventually sell more RV's, but up to this point, let like Erin mentioned, you're still in that that investment mode..