Camping World Holdings (CWH) Q2 2026 earnings call transcript

I will turn the call over to Ms. Kristin to get us started, ma'am, please go ahead. Thank you, and good morning, everyone. A press release covering the company's second quarter ended June 30, 2026 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 Litiation Reform Act of 1995.

These remarks may include statements regarding our business plans and goals, macroeconomic and industry trends, customer trends, inventory strategy, future growth of our operations, capital allocation, future financial results and positions, future SG&A savings and operating efficiencies. Actual results may differ materially from those indicated by these statements, as the results of various important factors, including those discussed in the risk factors section in our Form 10K, on our Form 10Q, and other reports on file with the FCC. 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-gapped financial measures on today's call, such as EBITDA, adjusted EBITDA, and adjusted earnings per share deluded, which we believe may be important to investors to assess our operating performance.

Reconciliations of these non-gapped financial measures to the most directly comparable gapped financial statements are included in our earnings release and in our website. All comparisons of our 2026-second quarter results are made against the 2025-second quarter results, unless otherwise noted. I'll now turn the call over to Matt.

Thank you, Lindsey. Good morning, everyone, and thank you for joining our second quarter 2026 earnings call. Let me start with what this team delivered. In the weakest new RD retail environment in over 15 years, we executed on the priorities we set for this year, growing new and new unit share, accelerating good time, and driving SG&A efficiency. We gained new unit share through May on top of last year's record, grew same store use units over 5%, improved F&I productivity, expanded goods and services and plans margins, generated significant operating cash flow, materially reduced inventory and floor plan borrowings, and reduced our SG&A by over $26 million. Those are the building blocks of a stronger company, and I'm proud of the way our team is executing.

I'll be equally direct about the results. This was not the quarter we expected back in April. The new RV sales market weakened during the peak selling season, and we made the decision to move through aged and prior model year inventory rather than carry those assets into the back half of the year. That decision pressured vehicle gross profit in the quarter, but it was the right call. And we were beginning to see the pay off with margins improving sequentially July to day.

First, I want to turn to our youth business, because I believe our ability to grow this segment remains paramount to the long-term success of our organization. We believe use RVs give customers a more affordable path into the RV lifestyle, and use sales create opportunities across F&I, goods, SAM and service. Our same store use vehicle unit sales grew over 5% in the quarter, representing share gains through the May stat surveys reporting information. For the full year, we continue to expect the used RV market to track within the 715,000 to 750,000 unit range. On the new side, according to preliminary SSI data, new vehicle retail registrations declined 16% through May, and it is our expectation that these trend lines persisted into June and July, with July potentially seeing more acute pressure.

We recognize a correlation in the second quarter between geopolitical tensions in the Middle East and new unit sales. We believe as a conflict result, this results in the stabilization of new sales trends. But I do not want these headlines to round the new industry to obscure the work our team accomplished. We gained new unit market share through May, no worthy, because May of last year marked the highest unit share in our company's history, and we see the 29% share of all new RVs sold in the U. S. We did this while growing our new vehicle average sales price by 13% in the quarter, driven by targeted share gains in the fifth wheel and motorized segments.

Given what we are seeing in the market, we now expect the industry to track in the 290,000 to 310,000 unit range for the full year as geopolitical tensions, gas prices, affordability, consumer confidence, and higher rates remain in real constraints on new demand. This compares to our previous range of 325,000 to 350,000 units. We believe our current inventory levels are appropriate for the current pace of demand, but we expect competitor dealers to remain focused on cleansing age inventory for the next several months. We believe we are now in our best current model year new inventory position since 2020. Our prior model year exposure of new RVs is nearing 1% down from over 6% a year ago, and our cohort of new vehicles aged over 365 days has been cut by over 60% compared to the same time last year.

At quarter end, the total number of new vehicles on our loss is down roughly 17% year over year, while dollars are down about 5%, reflecting the richer mix of inventory we are carrying as the industry continues to struggle with the travel trailer demand.

Turning to our used inventory, the story is very similar. Compared to where we ended 2025, used inventory units are down 18%, but the more substantial progress has been made on aging. In July, the average age of our used inventory is down over 30% compared to the end of the first quarter, and the percent of used inventory that is aged over 180 days, which is a core internal KPI for us, is down almost 50%. We head into the back half of this year with a leaner, fresher used book. Total RV and outdoor resale inventory dollars were down nearly 10% year over year, and floor plan notes were down approximately $280 million from year end. We are starting to see this progress on inventory optimization pay off.

July to date margins have improved sequentially from the second quarter, despite the softer industry demand we are seeing. Lastly, as it relates to our S&A, we have identified initiatives that we expect will deliver approximately $100 million of incremental 20 specific initiatives. We are retiring legacy software, replacing third party systems with purpose-built technology, renegotiating agreements, and simplifying back office processes. Last quarter, we have spoken about the in-house CRM we developed for the Good Sam Extended Service business.

Over the last four months, we developed and deployed another larger in-house enterprise grade RV sale CRM. We currently have an introduction in five locations, and the early results indicate improvements in sales volumes, closing ratios, employee experience, and customer satisfaction. Once we fully roll out this product, we're anticipating eliminating in excess of $20 million of annualized cost. Our objective in all these initiatives is to create a simpler, faster, and more scalable operating model with better tools for our team and a more consistent experience for our customers.

When we last spoke in April, we had early indications that new RV industry sales had the potential to track toward the low end of the 325,000 unit range. At the time, we were seeing improvement in total new and used RV sales through April, and we had sufficient visibility on near-term cost actions to reiterate our guidance range. However, the new RV market weakened during May and June, and industry volume trends have remained soft July, months to date, as the re-escalation of the conflict overseas began to weigh on demand. We are resetting our adjusted EBITDA outlook to $230 million to $270 million. Reflective of the trends we see today and what has proven to be an exceptionally volatile market.

We are focusing on the variables we have more control over, lean our inventory, structural cost actions, use growth, and stronger good salmon service execution. We are not waiting on affordability or consumer confidence to stabilize. We are focusing on building a better business with better operating leverage at the end of the cycle.

Now, we'll turn the call over to Tom. Thanks Matt. For the second quarter, we recorded total revenue of $1.9 billion down 2.1 percent year over year. New vehicle revenue was $869 million down 5 percent on new unit sales down 16.4 percent. Used vehicle revenue was $580 million up 1.4 percent on 5 percent higher unit sales. As Matt described, we deliberately moved through aged and prior model year inventory in the quarter, and that shows up in our reported vehicle margins. New vehicle growth margin was 10.9 percent compared to 13.8 percent a year ago.

Used vehicle growth margin was 16.5 percent compared to 20.5 percent a year ago. We expect these margins to look better sequentially in the second half of the year, supported by the early signs of margin progression we've seen thus far in July.

Within Good Sam, we completed our ERP overall in the second quarter on the timeline we laid out last quarter, enabling the team to chase B2B opportunities with our extensive platform. Good Sam services and plans gross margins expanded to 61.8 percent from 59.5 percent a year ago, and we remain confident in the ability of Good Sam to be a long-term growth driver for the company with additional top line opportunities ahead. We reduced total SG&A by 26.6 million or 6.1 percent year over year, continuing the cost discipline we discussed on our last call. SG&A is a percentage of gross profit with approximately 76.3 million up from 73.9 million a year ago, with the increase almost entirely a function of growth margin compression.

Let me take a moment on the incremental $100 million of expected structural SG&A and operating efficiencies. Three points in the timing of these savings. First, $50 million of that run rate savings are expected to be executed by the end of 2026 with the balance by early 2028.

Second, our revised 2026 guidance includes roughly $15 million of benefit in the year, mostly in the fourth quarter. Third, that means we expect about 35 million of those savings to carry into 2027. That carryover is one of two identifiable tailwinds into 2027 that we expect a total roughly $70 million. The second is the lapping of the roughly $35 million of inventory clearing impact from the first half of this year.

Turning to the balance sheet, we ended the quarter with $224 million of cash, $185 million of unencumbered real estate, and total outstanding long-term debt of $1.4 billion. Even against significant gross margin pressure this quarter, our capital deployment framework continues to prioritize strengthening the balance sheet while retaining working capital within this business and reducing our net debt leverage.

With that, I will turn it back to Matt.

Thanks, Tom. I'll close with this. It was a challenging quarter, but this team grew shared to record levels, expanded good Sam, and took $26.6 million of cost out with the goal of 100 million more coming. We're building a better business and I'm optimistic for what this team will accomplish in the quarters ahead. We'll now turn the call over to Q&A.

Beyond the lower industry out unit outlook, what are kind of the key puts and takes from a new and used ASPs and margins perspective?

Really from starting with your last topic first, from an ASP perspective, ASP is actually held in relatively well. Our used average sale price came in a little bit lower than our expectations, maybe to the tune of about $1,500 give or take. New average sale price though actually rebounded quite well year over year and rebounded even compared to consensus, I believe even built into your model, Sean. But when we take a step back and look at the MIPS, I mean, this is really just a new unit volume MIPS and new margin MIPS and used margin MIPS. They came in a little bit under expectations. Largely speaking, we realized the pain of those realizations of those misses in May and June.

We ended April in a position where we felt pretty good about the current progress we were making. In April, used same-store sales were up, high-single digits, new same-store sales were down, mid-single digits. We had started to see a stabilization of our margin profile. But as we balanced through May and into June, we started to realize that there was a lot of pressure on new RV sales demand. And we knew that we wanted to continue to work through some of our prior model year new inventory as well as our age use inventory.

So with that goal of mine, and also when confronted with pricing and promotional pressure from our competitors, that put a little bit more strain and pressure on our margin profile and our average sale price hung in there. But ultimately, this is a new volume, new margin, and used margin impact.

Yeah, I'll give a few from an annualized basis. Given that in Q2, we oftentimes are going to generate in excess of 50% of our annualized earnings for the entirety of a year, and that's just based upon just historical trends that we've seen. While we do believe in the back half of this year that we'll see some benefit by means of all these cost actions that we're taking, so perhaps that 50% could be a little bit less. But I say that in so much as Q2 is such a massive volume period for us, which is going to disproportionately impact the overall annualized EBITDA and margin percentages for the entire year. So when we think about 2026 right now, we're thinking that new margins could land anywhere in the range of 11 and a half, 12% for the entirety of 2026 and used margins could land anywhere in the range of 17 and a half to a little over 18% for the entirety of 2026.

We do believe that there'll be a sequential improvement in Q3, but really in Q4, it's always a matter of what's the promotional activity, what are we trying to do to prepare ourselves for next year? So historically speaking in Q4, you do see a little bit of a step down in margin, but even still, I look at this holistically or the course of all of 2026 to arrive at those conclusions. Okay, and just one more quick follow-up on the ASP part. To your point, new ASPs have been around sort of that just under 39,000, which I think was your maybe target for the year quarter or two ago. You were targeting 31 and a half for use.

Obviously, it's been a little below that, so should we be assuming used ASPs in the back half look similar to the first half, or is there any reason to believe they improve? I think that there is a high likelihood if we head into the fall and winter time periods, that you'll actually see use ASPs come up a little bit, and I'd say that in so much as historically, you'll see those consumers that have a willingness to buy fifth-wheeled and motorized units, which oftentimes are going to yield a higher ASP, they'd have a higher likelihood of starting to buy in Q3 and Q4. So for the entirety of 2026, I think used ASPs could land right around that $30,000 range, or maybe even a little bit higher, potentially.

But I think where we landed for the entire quarter, we were in Q2 at about $29,000. That's going to be indicative of the fact that there's a lot of consumers who are buying towables and more inexpensively priced assets, and generally seeing Q3, Q4, you see a bit of a recovery there.

First question on the new ASPs, you mentioned Matt, they were up almost 14% in a quarter. Was that all mixed?

Good morning, Joe. In large part, that was mixed. As we spoke about in the prepared remarks, we're seeing a lot of pressure on the travel trailer segment at large, but juxtaposed that against the success that we're realizing in the fifth wheel and class C segments, where we're seeing material market share gains within those specific segments in particular. And we believe that's a consumer that's probably a higher net worth individual that has a willingness to buy in this current marketplace, where that travel trailer consumer, you could argue, just doesn't have a willingness to engage in a bigger ticket purchase right now, where they're going to have a monthly payment that they're anchoring to for a longer term.

So we were very expected that replenishing and calling the shot on the class C and fifth wheel segments. In fact, there was a number of periods where we were up in excess of 15% in each of those respective categories throughout the balance this year so far. We believe we still have more opportunities to the balance of the year, which would then support the case that new ASPs are probably in the range where they'll end up for the year if not going up a little bit.

What's driving it? Is that your cleaner inventory? Is it less discounting, maybe a combination of the two? Definitely a combination of the two. I'd actually weigh a little bit more heavily on the former variable and so much as we were very disciplined about cleansing aged assets, especially on the youth side in May and June in particular, when we realized that the man had slowed down a little bit more than we had anticipated, we wanted to ensure that we were positioning ourselves as well as possible for the second half of the year equally as importantly though heading into next year. So yes, we did have that goal in mind, but there was the additional pressure of promotional activity because many other dealers recognized the same.

I would argue based upon our research that we're in a way healthier position than the broader industry and we believe that we've taken a lot of pain in the first half of the year to set ourselves up. I can't necessarily say that the broader industry is taking that same approach.

As of this moment, Joe, we use our own in-house index where we call it our R. D. price index, modeled very similarly as the producer price index where we take a basket of goods that we've looked at every single quarter and we go back 15 years and we try to assess it on a life-for-life basis. That's a long-winded way to say based upon that research, we're seeing right now to end this last quarter that model year 27 compared to 26 is we're up about 1.7%. I have heard certain rumblings that over the next couple of months manufacturers might be put in a position where they have to raise prices slightly again. I would anticipate maximum be another one and a half to 2% maybe and that could be okay.

I say that in so much as we're obviously confronted with general inflation and as long as these price increases consistently are below inflation, I believe that continues to answer that question of can we create a more affordable asset for these consumers to engage in this lifestyle.

Well, I think in some respects we were very aggressive in our pursuit to cleanse ourselves of aged assets. So we were very promotional to ensure that we were removing ourselves or getting rid of aged model year units, model year 25. And just as well, we picked up actually most of our share when you look at an individualized segment basis within the fifth wheel class D segment. We had introduced over the course of this last year a number of new products and floor plans within each of those respective categories and I can tell you that our campsite reserve fifth wheel for example has quickly amassed market share where that brand now sits at the seventh most popular brand in North America and that brand didn't even exist up until a year and a half ago.

This last year we debuted a whole new fifth wheel line that's complete with six different floor plans and we've been up materially with that one brand in particular. If we turn to our class C segment we've worked very effectively with Thor Industries to reimagine a number of different products within our class D segment and we're really just satisfying that consumer with a very affordable asset but that is complete with a number of features to entice them to actually engage with our business. Okay but I mean just kind of trying to read the lines there world where you guys are maybe a little bit more promotional than some of your peers so you maybe pulled forward a little demand or might have ridden too much into us.

It's possible obviously our new margin profile wasn't exactly where we wanted this to be. We ended Q2 with about just shy of an 11% consolidated margin on the new side but just as well we do a lot of research to ensure that we're at least market competitors on prices so I don't know that we were that much more promotional compared to our competitors. I think it's just a by-product of the nature of what consumers can afford and ensuring that we're hitting our sales goals and at the same time retaining as much margin in our business as we can.

We have not provided any commentary on 2027 and we're not in a position to start to wait on 2027 yet we sell a lot of this year to go but I can tell you that our focus right now in the short term is still on affordability creating more innovative and interesting products to consider having more consumers come into this lifestyle and ensure that we're continuing to grow the general term that exists within this industry. We haven't seen as much growth as we'd like to see and we've seen new RD sales in the general environment continue to decline that going on almost six years now once we last 2026 um so for us this is just what can we do to grow this industry?

I don't in Q4 historically we have seen some decline in margin. I think last year we did have some significant promotional activity in Q4 um you saw those margins this pretty pretty aggressively particularly on the used side. I don't know that we're projecting like that level or that that level of this Q3 to Q4. I would expect it to be a little bit more even Q3 to Q4 this year given what we've done in Q2 on the inventory side.

Those are really the areas. It is a combination like Mac gave the example of a sale CRM that's the second CRM that we've launched this year so until continue to see us make enhancements on the technology side and that not only saves on the actual staff piece but also on the consulting fees and some of the other in the licensing fees and some of the ongoing cost and friction that that creates within within the business and it also enables us to centralize more processes. So it does create opportunities for more labor efficiency down the road.

The third bucket is that that that procurement and supply chain piece where we're continuing to dive into certain agreements as they come up for renewal or frankly as we get through some of these technology initiatives where it opens up more opportunities for us to look at third party contracts and third party arrangements in a different light and look at different alternatives. So I think the teams across the board are being very creative in how they're thinking about the future of this business and where they want to remove friction with the employee base as well as with the customer and all of our processes.

Matt, I thought I heard you say that June, July were equally as rough as the quarter but it sounds like July. I think you talked about that a little bit. It sounds like I got a little bit worse in July and what do you attribute to just the general macro environment?

Good morning, Scott. And you are correct. We did say that in our prepared remarks and we did see a slight step down from June to July. It's still in the range but we can't help but recognize as we conducted our own internal research and external research that there's this bit of core alert that exists between the geopolitical tensions overseas and certain key moments like for example earlier this month in July that is when there was a re-escalation based upon that survey information as well as our own internal information we started to see a disc almost overnight in sales. And that's where we started the month with a lot of hope because it seems as though there is going to be some resolution perhaps on the horizon but immediately upon that specific instance you can see them weekly SAT survey data that we procure as well as I'm sure many do on the call.

You can see the overnight sales dips and unfortunately that landed itself to the possibility that there was going to be a little bit lower comp year rear compared to June but it's basically the same. So our hope is that as we're approaching resolutions for all these different tensions that you'll start to see the stabilization the new RV marketplace and that's really where we'll start to yield the operating leverage that we're creating in the business.

I'll start with the last I believe that we have plenty of opportunity to utilize our base more efficiently and effectively and we have a number of bays that aren't occupied with technicians right now so we know that is one of the most difficult things within any service industry right now to find the right talent retain that talent and make sure and constantly train that talent we put in incredible emphasis on ensuring that we're keeping that pipeline full and retaining technicians in this space. When we think about the utilization levels though and that's a base between internal external yes it is true that internal still does take up a little over half of actually all of our available hours within the bays and it is true that our external work has tremendous upside in opportunity we have seen the improvement in external work compared to the trend lines that we were seeing last year and this year really though we're seeing that because we made a strategic call about a month and a half ago now where we changed our labor rate structure for consumers and this is a recognition of consumers having to affordably service their assets so we debuted a rate structure we offer installation of any one of our components or products for $99 an hour maintenance for $120 an hour and for more complicated jobs especially collision it's $199 an hour previously our posted labor rate was $199 an hour across the board what we have seen is that our revenue is actually improved but because we did drop some of these labor rates our gross profit has remained flat so while revenue is going up gross profits flat where that serves the benefit though is if you look at our retail and parts business we're actually seeing a nice improvement there which tells us these consumers do want to service their assets they do want to add these upgrades and features we just need to make sure that we could affordably enable them to do this by means of the service where it's actually being reduced for the major labor rate and Scott I would add too that's that's something that we changed into a quarter so we've seen it come through the numbers in the back part of the quarter but but it definitely did not come through obviously in the consolidated results for Q2 God if I could just speak one last one in could you give us an update on how your Costco initiative is progressing as we shared last time we paused in April took a reset of the entire program what if you reimagine the entire lead process flow figure out a more affected marketing strategy we kicked it back up in May and we've had a number of different road shows we've noticed a correlation when we have a road show in a specific Costco that region actually sees an uptick in general sales volume but this is still early days given that we had to go through that reset period so we're seeing nice progress but we're not going to hit the goals that we were originally intending to that's just the reality of it we originally were trying to goal seek at least 3,500 sales this year if not upwards of 5,000 through the Costco program I could tell you we're in the hundreds of units sold we're still seeing a number of leads that we're cultivating and there still are opportunities but now that we're beyond the peak selling season the reality is seasonally you start to see demand fall off in Q3, Q4 so this would really be more of yes I think we could pick up some incremental volume to advance through Costco through the balance of the year but this would really be a play for next year your next question comes from the line of Alice Wiecklin from mayor of the police go ahead yeah good morning gentlemen thanks for taking my question just want to touch on kind of the F&I business and maybe what expectations for that should be in this macro environment I think you had a good performance here in Q2 but I'm I guess I'm wondering is there any appreciable difference between the attachment rates depending on the type of customer that's coming through the door maybe that more premium one versus that travel trailer customer you know not a not a big difference hey Alice it's right even though our mix is has shifted a little bit I think if you think about the back half of the year I would think about F&I is a percent right that penetration rate pretty similar to what we saw in the front half I think as you see used you know continue to grow and you see new have some of that relative pressure that does kind of you know shake out to some of the trends that we saw in the first half of the year so that business continues to remain you know obviously very strong for us will continue to be driven largely by volume and attach but there's really not not too much of a different we're seeing across the cohort within the attach I'll just say the percentage what you do have historically when you do sell more travel trailers you see a higher percent but when you start to sell some of these you know fifth wheels and larger items that percent kind of comes down but I can make sense and then on the balance sheet I apologize if I missed it but did you share kind of where you expect leverage to end the year and you know maybe any thoughts on how that might play out you know early into 2027 yeah so leverage for the year I mean based off of the guidance change we we want to get as deep into the fives as we can this year our long-term goal though still remains to get below three and a half times or below three times over the course of the coming years and that's really going to be driven by a lot of these cost initiatives and efficiency initiatives we want to control our destiny on the leverage side and improve the operating leverage of this business so that we can have you know a lower floor and have a steadier long-term leverage target for the enterprise.

Morning Noah so when we think about the low end and the high end we obviously have a number of inputs that are designed between that low and high end the principal ones though being how does the industry behave and we believe on that 230 million dollar range that would suggest then that the industry new retail activity dipped to about 290,000 new RV sales for the total of 2026 and on the high side we're anchoring to that 310,000 new unit range when we think of the used marketplace that's where I'd also anchor that to on the low side 715,000 used unit sales for the entire of the year and on the high side to 750,000 so embedded within that is market share implications where we believe that will end up in North America at about 22 and a half to 23 percent total market share in North America which would also be higher if you just look at the US and then on the use side we believe that our used market share for the entirety of 2026 will be about 8.8 to 9 percent so if you're to take those anchors and then we've obviously provided previously our new average sale price we think is going to be right around you know $39,000 to $40,000 for the entire of the year use that for sales price hanging in that range about $30,000 and we previously provided on this call the gross margin range that really becomes your input then to suggest where the potential range of outcomes are and we believe that the industry should settle into that $290,000 to $310,000 range yeah and no it's just to put maybe a little bit more context around that as well if you think about the lower end of that industry assumption right that $290,000 you're looking more towards you know a trend line or a trend rate that would reflect more of what we're seeing in the industry and in our business in July and really flowing that completely forward while the higher end would you know have not a you know a sharper a meaningful recovery just a little bit of improvement as industry compares easily slightly you're up against things like the government shutdown last year that would kind of reflect more the industry outlook contextually into the higher end thanks and then maybe just kind of any thoughts around inventory positioning and how you're kind of planning the back half there you know not not the prior kind of next to your strategy but just any thoughts on the back half from an inventory perspective thanks no we went through a lot of pain to ensure that we rid ourselves of age model year units as well as age use units so we're taking a very conservative approach to replenishment here heading into the balance of the year if we look at channel inventory across the board we believe that the broader industry still has a little bit too much inventory basic upon current demand trends and that's even if we end up on new RV sales of 310,000 units in the entire industry so we think the industry is a little bit more work to go to cleanse itself and channel clear it but for us we're being very thoughtful about replenishment of those products that we know we're doing well with and we want to ensure that we maintain the market share that we've worked very hard to gain over the last few years thank you your next question comes from the line of jim charter from an ass craspian heart and company please go ahead good morning thanks take my question you know man talk about the importance of the use business going forward you know how has the pullback in use inventory how's that impacting your expectation for use for a fishier and then what's a reasonable expectation that we can think about how the use business can grow for the next few years thanks we still believe that the youth sales for this year should be positive uh year over year from 25 to 26 but we were very conservative in terms of replenishment of certain use categories we are down on our use inventory quite a bit year over year we also have leaned a little bit more heavily into consignment business which is ensuring that we're at least replenishing certain components of our business and it doesn't show up in our balance sheet so we are setting ourselves up to yield that opportunity but we have gotten a lot more thoughtful and better in terms of the AI enablement that we have to identify certain market demands and this has just been a recent revelation over the last couple of months to understand what our market data supply are by price point by segment down to model down to different vintage model years so that's helping to inform exactly where we should perhaps maybe either either raise the value to procure an asset or start to decrease the value to ensure that we don't procure too many of that specific asset but the youth business is obviously very difficult in terms of procuring and setting up all the processes to cultivate that relationship with the customer and then transact so we believe that we're well positioned just as well you are hitting home on something we discussed internally as we want to make sure that we're not out of the right floor plans and the right products and all these markets nationwide okay and then as far as kind of future you know the next two or three years you know how are you thinking about the potential for youth unit growth you know we're not looking out that far but sufficient to say we believe that the youth market is very stable impervious to any sort of the issues that we're seeing on the new side of the business in terms of affordability and this is a long-term strategy for us we believe we can continue to compound these gains that we've seen as stated earlier we're sitting at about a just shy of 9% market share of the youth business that number over the next few years should grow to 12% plus so in consolidation we still maintain that new and used market share combined we have 15% as our short-term target and over a longer term over the next five years we believe 20% is still a very reasonable goal that we had previously stated that's helpful thank you and best of luck thank you your next question comes from the line of brand and roll from loop capital please go ahead good morning thank you for taking my questions given the strength and used rvs could you talk about the use versus new pricing spread you saw during the quarter and how that could potentially evolve throughout the back half of the year given prices for new rvs could potentially be increasing you are zeroing in on a factor that is normally indicative of the health of the balance and spread between new and used and what is going to result in the actual outcomes so this becomes like a causation factor so when you have a healthy spread between new and used through inventory costs or actual cost value in excess of 20 to 30 percent that's generally a healthy balance for both portfolios so when we're anchoring to our average sale price for the balance of this year settling into about $40,000 on new assets and about $30,000 on used assets this speaks to the historical norm that exists of a near 30 plus percent split between new and used average sale price there was a time this time last year we saw our new average sale price this considerably and that spread between used and new started to be negatively impacted that's where we didn't actually see that healthy gain opportunity on both sides we liked this spread it sits today obviously there's different dynamics that exist of like are there certain price points or segments we're selling more of on used versus new where you could see these numbers flexed up and down a little bit but this is a really nice environment we look back to over the course of history okay great and is that impacting your promotional activity on the new side at all to maintain that healthy pricing spread no no that was a goal seek that we had over a longer term but that's where you look at different segments Brandon you've been around the industry for a while there's so much noise when you look at travel shows the fifth wheels to motorize and how you need right side certain segments within the class b segment is where you just need to make sure that you are getting rid of those assets that could represent risk in the future and we know on the new side anything that over a year old you can expect that you're going to feel a lot of margin pressure and on the use side any assets is over 180 days you're going to expect to give up that margin that you would embed it when you had procured that asset so we're just being thoughtful about looking at every single asset on an individualized journey basis where every single asset has an individualized story remarketing plan great thank you wait as a gentleman as a reminder if you would like to ask a question please press tar followed by the number one on your touch tone phone and if you're using a speaker phone please make sure to lift your handset before pressing any case your next question comes from the line of Brett Jordan from Zephries please go ahead hey good morning guys this is Patrick Buckley on for Brad thanks for taking our recently you know i think about margins moving forward there uh where does the math end up between the new lowered rates you guys had mentioned um that you're charging in in the any labor inflation that you're seeing so actually our effective labor rate remarkably is settling into the exact averages that we were seeing previously uh so we're settling into that effective labor rate and that range of about 165 dollars an hour uh which the reason why our posted labor rate previously was 199 bucks an hour we've now introduced this tiered labor rate structure but the assumption in the former example the 199 labor uh rate across the board we would discount of course to ensure that we were just looking at a job holistically and whatever we could yield in terms of that labor compensation we would but ultimately consumers can only afford so much so we've recognized with this tiered labor rate structure we're seeing revenue go up gross profit flat effective labor rate is flat and we are seeing more customers come through the door and actually attach more retail parts and accessories to to install their assets got it that's helpful and then as you look at recent trends across the the new RV market uh how are metrics like foot and web traffic holding up are there signs of a more healthy underlying demand there but conversion ends up being the issue and they see where the monthly uh payments end up we are seeing pretty consistent trends throughout the balance of this year that are really just a continuation of the end of last year where web traffic has been consistently slightly down pretty persistently throughout last year end of last year into this year uh as such lead volume slightly down as such even walk-ins and showroom visits are somewhat down however we are seeing improvement in showroom close rates so that suggests that customers come in the door they have a willingness if they're there to actually close on the deal really the question is how can we just ensure that the every man can actually engage in this lifestyle again this industry is built off that middle class american that wants to just buy something affordable wants to actually engage in the lifestyle and we're seeing that opportunity manifests itself within the use business where the use business in the industry is healthy it's been flat to up every period this entire year so we know that the consumer is healthy however they don't want to make those long-term commitments on a big ticket purchase and we're also seeing that in the housing industry we are however seeing those consumers that are higher income consumer have a willingness to actually engage in the lifestyle because they feel very comfortable and confident in their equity positions right now so we'll continue to people watch the lie on this we believe that there's different marketing levers that we could pull upon and we'll continue to get creative with manufacturers to drive down the cost of these assets and continue to maintain a focus on used assets great that's all from us thanks guys thank you there are no further questions at this time i would like to turn the call back to Matthew Wagner for closing comments sir please go ahead thank you everyone for the time this morning this was a challenging quarter but i'm very proud of how the team continues to execute and i look forward to speaking with all of you again in another three months ladies and gentlemen this concludes today's conference call thank you very much for your participation you may now disconnect