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Camping World Holdings, Inc. (NYSE:CWH)
Q1 2019 Earnings Call
May. 8, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to Camping World Holdings Conference Call to discuss Financial Results for the First Quarter of 2019. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. 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. Participating in the call today is Marcus Lemonis, Chairman and Chief Executive Officer; Brent Moody, President and Mel Flanigan, Chief Financial Officer.

I will turn the call over to Mr. Moody to get us started.

Brent L. Moody -- President

Thank you, and good afternoon, everyone. Press release covering the Company's first quarter 2019 financial results was issued this 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 goals, plans, abilities and opportunities, industry and customer trends, growth and diversification of our customer base, an increase in market share. RV and outdoor retail location openings, acquisitions and related expenses ,increases in our borrowings 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 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 adjusted EBITDA and adjusted EBITDA earnings per share, 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 measures are included in our earnings release and on our website. All comparisons of our 2019's first quarter results are made against the 2018 first quarter results unless otherwise noted.

I'll now turn the call over to Marcus.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Thanks and good afternoon everyone. We appreciate your time and more importantly your interest in Camping World. We are very excited about the progress we have made in our business over the last several months. Our financial results for the quarter and the directional trends for the business are effectively in line with our full year guidance expectations. Consistent with our forecast and despite, the industry shipment data we have seen an improvement in sales trends beginning in mid-March and it has continued into April and early May.

To reiterate, we are reaffirming our full year sales and adjusted EBITDA outlook of $4.9 billion to $5.1 billion, and $320 million to $340 million respectively for the 2019 calendar year. We are the number one RV retailer in America. We believe that the combination of all of our assets and resources, both tangible and human capital are what makes us unique and creates a massive moat around our business.

In looking at our business late last year, it became clear to us that managing our dealership and retail businesses independently was not the most efficient or effective way to manage the business. It also did not reflect how the customers shopped and how the associates served our customer. One brand, one voice, one location. We manage our field operations of over 200 locations by looking at the overall profitability, Organic growth and the return on capital one location at a time. We are brand agnostic and profitability focused. The directive from me and Brent and Mel is to maximize profitability at each of our locations by utilizing the entire array of products and services in our vaults to meet market demand for that specific location by having the right product at the right price at the right time.

Since, the beginning of the year, we have taken steps to realign the operating and reporting structure of the Company, which has allowed us to eliminate redundancies, flatten the organization and increase efficiency. All of which we believe will ultimately reduce SG&A and increase sales. With this realignment, we have consolidated our field operations under three divisional Presidents, Josh Erickson, TJ Smith and Scott Jensen, who have responsibility over all locations in their respective geographical areas.

This management team averages over 20 years of experience in the RV business. I've also elevated Matt Wagner to Executive Vice President, overseeing the areas of Inventory Management, Digital Development, Digital Marketing, Media Services and RV e-commerce. These categories must work in concert with each other to maximize both sales and inventory turns. Matt has been with the Company for over 12 years and has been instrumental in developing management tools and systems that have improved our business. We have successfully recruited Russell Gentry as our new Executive Vice President of Consumer Data and Strategy. Russell is responsible for the acquisition and management of all consumer data across our entire business. Russell brings years of experience in scientifically targeted approaches that improve growth rates, while reducing associated SG&A. Either way this is a huge win for our company. We have also added one of the strongest team members in recent history with the addition of Peter Jelinek, our new Senior Vice President of Strategy, Merchandising and Product Development. But, simply stated it is our expectation that Peter will improve our inventory assortment, while enhancing margins, vendor relationships and most importantly ensuring that we have the right products at the right price at the right time. Peter spent the last 13 years with West Marine in senior positions and is a spectacular addition to our team. In the areas of e-commerce, we have charged Chris Currier (ph) as our new Vice President of E-commerce has been with our company for years with overseeing and developing our e-commerce business. Chris was instrumental in and has driven the launch of our new website. Additionally, Chris drove the newly established relationship with Amazon that holistically introduces our company's entire retail product offering to Amazon's entire marketplace. We see this as an entirely new untapped channel of business and we could not be more excited about teaming up with Amazon.

To oversee our supply chain, which includes our distribution centers, we are fortunate to have added Mike Cox to our team. Mike brings over 40 years of experience and his task with improving the efficiency and effectiveness of our supply chain, increasing throughput, reducing costs and effectively integrating with Amazon's platforms and most importantly their standards. We believe these and other changes will allow us to drive profitability and revenue. Both in our field operations and our fast growing e-commerce business.

I'm going to let Mel review our first quarter results and then I'll come back with some closing commentary.

Melvin Flanigan -- Chief Financial Officer and Secretary

Thanks, Marcus, and good afternoon, everyone. As Marcus noted, we're pleased with how the first quarter played out which overall was in line with our expectations. Consolidated total revenue was $1.1 billion, up slightly from last year's first quarter and a new record first quarter for the company. Consolidated gross profit was $298 million, down 1% from $302 million last year. On a percentage basis, gross margin came in at 28% compared to 28.5% last year. The decrease in gross margin is largely attributable to a change in the product mix and the impact of certain inventory optimization programs. Adjusted EBITDA was $21 million, down from $68 million a year ago.

As a reminder, adjusted EBITDA last year included the add back of the pre-opening expenses, which were $20 million in the first quarter and $43 million for the full year. An 8.8% increase in SG&A, resulting from a 23% increase in RV and outdoor retail locations, coupled with margin compression were the primary factors impacting profitability in Q1.

Turning to our segments, we affected a number of organizational realignments in Q1, which necessitated a change in our reporting segments. Beginning in Q1, we're reporting under two operating segments, goods and services and plans and the RV and outdoor retail segment. The new segments represent the following activities. The goods and services and plan segment primarily derives revenue from the sale of emergency roadside assistance, property and casualty insurance programs, travel assist programs, extended vehicle service contracts, vehicle financing and refinancing, shows and events and publications and directories.

The RV and outdoor retail segment ,primarily drives revenue from the sale of new RVs, the sale of RV and outdoor products and services, commissions on the finance and insurance contracts associated with RV sales, goods and club memberships and co-branded credit cards. The Good Sam Club and co-branded credit card lines of business were made to this segment effective January 1st to drive greater synergies between those two programs in the RV and outdoor retail locations that are primarily responsible for selling and servicing them and to reflect how we're managing that business.

The goods and services and plan segment continues to deliver a strong top and bottom line results, posting revenues after elimination of inter segment transactions at $47 million in the first quarter of 2019, up 4.8% from $45 million last year. Gross profit was $26 million or 55.9% of revenues, up from $24 million and 54.4% last year. Our RV and outdoor retail segment revenue after elimination of inter-segment transactions was $1.02 billion, up slightly from $1.01 billion last year. RV and outdoor retail gross profit was $272 million or 26.7% of revenues, down 2% from $278 million and 27.4% of revenues last year.

The decrease in profitability was attributable to a combination of changes in product mix and the impact to certain inventory optimization programs. During the first quarter, we worked hard to address certain slower moving or overstocked products in order to both reduce inventory levels leading into the normal seasonal growth cycle and to free up additional cash to effect that build. In the end, total Inventory increased about 4% in this year's first quarter, compared to an 11% increase in the same quarter last year. So, while we always need to build inventory seasonally in Q1, the increase this year was far more modest than the previous year and we believe we're entering into the busy season with a meaningful improved product selection across the board. Consolidated operating expenses increased 9.8% to $281 million for the quarter including the increase in SG&A, I mentioned earlier. The increase in operating expenses was primarily driven by incremental wages, selling and associated overhead expenses related to the year-over-year increase in RV and outdoor retail locations, and a $4 million increase in depreciation and amortization.

In addition, we incurred approximately $4.5 million in un-budgeted and or non-recurring charges related to store and distribution center closings, and professional fees, termination costs as we streamline and realign the organization and storm damage at one of our stores in Oklahoma. Overall, we believe that our aggressive expense management will yield significant benefits as the year progresses. Other expense totaled $21 million in the first quarter of 2019, compared to $25 million last year. The $6 million increase in combined floor plan and other interest expense, due to both increased borrowing rates and higher average borrowings was more than offset by an $8 million benefit related to an adjustment to our tax receivable agreement or TRA liability, associated with the transfer of the Good Sam Club and credit card assets to the RV and outdoor retail business.

This trend -- the transfer impact of this quarter's P&L both above the line and other income and in our tax provision. It resulted in a reduction of future expected tax amortization of goodwill related to the previous 743(b) step-ups that originated from earlier exchanges of units at the partnership level. The transfer has the effect of converting previously amortized at both goodwill to unamortizable subsidiary stock as a result of the move from our GSS Enterprises subsidiary, in LLC to our CWI Inc. subsidiary at Seaport.

This resulted in a reduction in the future tax benefits available for payout to TRA members and thus, reduced the TRA liability by $7 million. This $7 million combined with an additional $1 million reduction in the TRA liability for a change in state income tax rates applicable to CWH. Make up the bulk of the $8 million included in other income in Q1. A tax provision was also impacted as I just mentioned. The $23 million tax expense reported in Q1 is driven primarily by three factors. First, $15 million pertains to changes in certain deferred tax assets and associated changes in the valuation allowance related to the inter-company transfer of Good Sam Club and credit card assets from GSS Enterprises to CWI Inc. Second, $6 million related to the fact -- is related to the fact that ongoing taxable losses generated by CWI are subject to a full valuation allowance and that's not available to offset group level taxes at least not until such time as the entity turns the quarter to profitability. And third, the Company has recorded $1 million of income tax expense, related to the reevaluation of certain deferred tax assets resulting from a change in it's estimated state income tax rate. Net loss was $27 million and loss per share was $0.52 for the quarter ended March 31, 2019.

Turning to our balance sheet. We ended the quarter with cash and cash equivalents of $70 million and net working capital of $505 million. Total inventory is $1.6 million, up 4% from year-end and up 3% from a year ago. The increase versus a year ago was due to an increase in used vehicles, driven by our initiative to grow our use business this year and an increase in product parts and accessories driven by our new stores. New RV inventory declined 6% in total and 20% on a per dealership basis year-to-year.

At March 31, 2019, we had $1.2 billion of term loans outstanding under the senior secured credit facility, $882 million of floor plan notes payable under the floor plan facility, $43 million of borrowings under the floor plan facilities revolving line of credit and $9 million outstanding under our real estate facility. Looking ahead, we feel that we're weathering the challenges facing the industry well and are optimistic as we look ahead to the all important summer season. With our performance in Q1 being essentially in line with our expectations, we're reiterating our previous outlook for 2019 as Marcus mentioned earlier.

With that I'll turn the call back over to Marcus. Marcus?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Thanks, Mel. This concludes our prepared remarks. We're now ready for the question-and-answer session.

Questions and Answers:

Operator

Thank you. (Operator Instructions) We'll go first to Rick Nelson with Stephens.

Rick Nelson -- Stephens -- Analyst

Thanks. Good afternoon. Marcus, can you talk about sales trends that you saw during the quarter and what you're seeing in April and May and a little color, I guess around the guidance, first quarter EBITDA was about a third of prior year levels, that would imply 20% plus growth in EBITDA over the remaining quarters, that drivers to that growth?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, sir. So, as we had previously discussed in our last call, we all knew that the industry was facing serious headwinds in the fourth quarter and it had leaped over into January and February and when we look at last January and February, we knew that those were the two biggest months -- two biggest Januaries and Februaries that our company had ever seen and we had disclosed in our forecast that it was going to be a tough first quarter comp. The results that we saw about mid-March and in April and in early May, clearly show us that that trend is reversing and that well, while there may not be a ton of tailwinds pushing us, we don't experience the headwinds that we were experiencing in January and February.

Our web traffic is up dramatically. Our foot traffic is up and in April and in May, we feel like we're returning to a more normalized, stabilized cadence of sales that we had experienced previous to the softness in the fourth quarter. As it relates to the earnings, the earnings were in line -- revenue, growth profit and earnings were in line with our full year forecasts. And as we talked about on the previous call, we knew that the first quarter was going to be tough. But, we also knew that the third and fourth quarter were unusually terrible for us last year. And whether that was headwinds that we experienced with margins or softness in sales or expenses in ramping up new locations, we knew that we had in a much easier hurdle as we get deeper into the year and we feel very confident, very confident that our $320 million to $340 million range of guidance is very achievable. Obviously, we're working hard to exceed that number but we feel good about where we are as we sit here today, because we met our expectations.

Rick Nelson -- Stephens -- Analyst

Thanks. Just to be clear, what you're seeing in April and early May are declines moderating or you in fact seeing growth over this period?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Well, I mean, much like the industry, I think we have two funnels of data to work from. We have the manufacturers shipment data that quite frankly has been -- I'm sure alarming to some but not to us down 30, down 40, down 30, 45, whatever these big numbers are. And then, we have what I would call the un-audited, unauthenticated numbers that stat surveys provide which is more of a guide because it doesn't include all states and there's timing issues. But, we definitely predicted that we would be down for the year. I think our projection was around 3% to 4% down for the year. We knew that that number would get significantly easier. To answer it in the most distinct way, January and February were down more severely. And then, as we climbed into March and to April that really started to to normalize. In April, I think our total comp stores in April were down about 4% just right around 4% and what's interesting about it is that while our new continues to be soft, not as large as what you're hearing from stat surveys and from the manufacturers, our used is up about 10%, which was really part of the strategy. We anticipate that the new business on a comparable basis, could continue to be softer but not as severe, over the next several months and then mitigate itself and hopefully turn positive in the back half of the year at some point, assuming that all macro factors stay constant but we mitigated a lot of it quite frankly with this strategy that we're employing on use side.

Rick Nelson -- Stephens -- Analyst

Got it. Finally, if I can ask him about again Gander RV which are early learnings are there and how that is performing relative to your initial expectations?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

To be candid, I'm pleasantly surprised as we have pivoted more severely away from thinking about Gander as a retail business and more as an RV company assisted to Camping World. We have taken historical underperforming Camping road locations and rebranded them and reassorted them. And the early signs are positive. It also has allowed us to take outlier locations, stand-alone locations that didn't necessarily warrant the Camping World brand because the facility or the market, but they offered a full RV assortment and service in collision and we are now have branded and are continuing to brand those Gander RV. I think the marketplace can expect that as we think about our 200 plus locations going forward, we wake up every day and we know that we have a edict to make every one of those locations profitable, regardless of what they're called, regardless of what their assortment is. Let me be very clear about one thing, when we wake up and we look at those locations regardless of the brand name, regardless of their assortment. We are not in the business of operating locations that do not positively contribute to our company. Now, when we're doing that analysis, we need to understand where they are in their lifecycle. Are they 10 years old, 5 years old or 5 months old? And we want to be cognizant to make sure that we've done everything responsible to make those vocations work. But, we don't have a pride of authorship that would require us to keep things open that don't work. In the fourth quarter as you know we closed locations, some were stand-alone Camping World stores, some were stand alone Camping World RV dealerships and some were Gander locations. We will not hesitate at any time to close any locations that we believe does not work in the long-term. And we're monitoring it on a daily basis. And I think, we even closed a RV location called Camping World in the first quarter, because we want to make it clear, we will not operate locations. Our field organization is three distinct divisions, that are responsible for those locations regardless of what their assortment is. Obviously, we're an RV company first. And we will never forget that.

Rick Nelson -- Stephens -- Analyst

Thanks a lot. And good luck.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Thank you.

Operator

And we'll go next to Craig Kennison with Baird.

Craig Kennison -- Baird -- Analyst

Hey, thanks for taking my questions as well. So, just getting back to the first quarter adjusted EBITDA metric, I mean, if I do the math right. EBITDA margin was close to 2%, clearly that's not your expectation embedded in guidance. Was there's something unique to the first quarter that impacted that metric so severely?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

No. Quite frankly, Craig, it was in line with our forecast and as you know, we had a softer January and February on the new side than we would have hoped for. But, it is what we forecasted. And as we continue to become a larger company, and have more locations either through acquisitions or whatever it may be, we all know that January and February is not our bellwether month. And so we expect those locations to contribute to us more positively as the year goes on. But, as we sit here three, four or five years from now, if we have 100 more dealerships that are all profitable on an annual basis, there will continue to be pressure on January and February, because it's not part of our normal business. We also had $4.5 million of unexpected expenses in the first quarter, almost $2 million of that directly attributable to the extension of our filing as it related to the tax -- taxes for the K. We also had expenses associated with the closing of certain locations that historically the Company may have added back that are in our P&L and in some of the other ones that Mel mentioned that weren't budgeted. But, even though we had those $4.5 million, we are not adjusting our full year guidance.

Craig Kennison -- Baird -- Analyst

Okay. Thank you. And then I think, Marcus, you had mentioned the partnership with Amazon. Could you clarify, are you selling all products including RV's via that channel?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

So the relationship that we have with Amazon is a new one. It's one of the more important relationships both for Amazon and our Company, as they wanted to get further into the outdoor and RV space. Camping World as a Company have never participated in that. At this time, we can't speak to the things that are going to be added to the relationship in the future but, we can tell you that our full offering of what's in our vault, both in our own distribution center and soon to be in their distribution centers will put every product that's in our Company vault in the Amazon channel, which we think will be huge. It's the start of the relationship. I can't speak to what will happen in the future but, at this time it's only the commodities retail products that will be sold on Amazon and the book and it will all be branded, Gander outdoor and RV. So, as the consumer across the enterprise, across Amazon's platform receives that product or sees it, as they're searching for it. We were able to in discussions with Amazon, select the brand that we felt could best attract consumers and obviously with prices as well, we expect that to happen. So, a huge win for us. I mean, I can't -- I'm trying to underplay it so that we don't make it a bigger deal but we took us about seven months to get it done. And we were not permitted to talk about it until the thing actually launched, not the idea was born.

Craig Kennison -- Baird -- Analyst

And a lot of people, when we talked about Amazon realized what a powerful company it is but, also comes with some challenges with respect to pricing and margin. Can you speak to that dynamic and then again, it wasn't clear are you selling RVs through that channel or just the commoditized products that you mention?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

At this time, we are not selling RVs, but we cannot discuss what could happen in the future. And so as it leads to margins, we believe that our entire assortment is properly priced today because we launched a new web platform for Overton's, for Gander and for Camping World. And so we expect to be properly priced at all times and we use technology to support that. In our discussions with Amazon, we all knew that we needed to be appropriately price to be competitive in the marketplace. And ultimately, we're not in this business to have extreme margin compression but, we are in this business to expose consumers to our brand, to our products and to open up and expand our moat in the RV and outdoor space. And this is a new funnel of revenue that we did put in our forecast but did not discuss previously because, we weren't permitted to. We don't expect any extreme margin compression.

Craig Kennison -- Baird -- Analyst

And lastly with respect to Q2 adjusted EBITDA --

Marcus A. Lemonis -- Chairman and Chief Executive Officer

And Craig, let me add one more thing, I apologize. Part of the reason that the Amazon relationship was so important to them and to us, is because we have a wide array of private label products in all of our categories that allow us to be the price leader and product innovator without a bunch of noise around it. And so that was a big part of the decision as well. Sorry about that.

Craig Kennison -- Baird -- Analyst

No, that's helpful, thank you. And then finally with respect to second quarter adjusted EBITDA, just so, we set the right bogie, what is your internal budget for revenue and adjusted EBITDA as you forecast for the second quarter?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, so we aren't providing quarter-by-quarter guidance. Our guidance of $4.9 billion to $5.1 billion and $320 million to $340 million is what we're reaffirming and we achieved our objective in line with that forecast in Q1. What I will tell you is that, Q2 was still a decent quarter to comp in comparison to last year, not as high of a hurdle, and as we get into third and fourth quarter, it becomes easier. We believe that because we were not able to or we chose not to provide detailed guidance around the quarter-by-quarter, that it looked to me that the miscommunication around quarter-by-quarter breakdown was really vaulted into the SG&A, not in top line and not in gross profit. And so, we think that the marketplace and just really understand that our full year guidance is strong and we can't really provide more guidance in that.

Craig Kennison -- Baird -- Analyst

Okay. Thank you.

Operator

And we'll go next to Brett Andress with KeyBanc Capital Markets.

Brett Andress -- KeyBanc Capital Markets -- Analyst

Good afternoon. Just to kind of be clear here, are you keeping it down 3% to 4% new vehicle sales outlook intact? And then also when you said April is down 4%, were you referring to new and used combined or was that just new vehicles?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

The down 3% to 4% for the year, we are keeping intact which is in total. And when I referred to 4% down in April, that is also in total. But, we are keeping that number intact for our forecast for the year.

Brett Andress -- KeyBanc Capital Markets -- Analyst

Okay. And then, so RV inventories ending up at the end of the first quarter, I'm not sure if you were planning for that or not. But, can you may be elaborate on some of the I guess better quality of that inventory may be what you've done over the last few months to optimize that mix?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes. I'm sorry the new RV inventory actually declined 6% and on a store -- same store sales basis, our RV inventory is down 20%. I'm sorry, I don't know if we miscommunicated that it was up but our new RV inventory is down 6%, even with the addition of all the locations and on a same store basis is actually down 20%.

Brett Andress -- KeyBanc Capital Markets -- Analyst

Got it. That's probably a byproduct of getting the press release a minute before. But, anyways the next question I had is, -- I guess since, we're still trying to digest the press release, can you may be this more of a housekeeping but update us on the leverage profile the business at the end of the first quarter, just remind us, are there any outstanding covenant levels out there or just where that stands in relation to your leverage?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Mel?

Melvin Flanigan -- Chief Financial Officer and Secretary

Well, overall is about correct. I think in terms of covenants, we're in compliance with everything at the end of March that -- that's out there. There's really only one minor, not really a covenant it's more of a test and it's on a revolver facility that we have -- that it was -- we were so good on that at the end of Q1. So, I'm not going to say it's not -- we're cautious of course, we always are. But I think we're doing fine for now, from a --

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes. The way that we think about it is --

Melvin Flanigan -- Chief Financial Officer and Secretary

Yes.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

The way that we think about it is, we prefer that our leverage to be significantly less than that. And as we think about the balance of the year, we know that, that number through the end of 2019, we'll come back down but as we think about our available capital for the year because, we are going to dramatically continue to reduce our retail inventory and bring that cash back into the vault. As we think about how we've tightened up on CapEx because we're not opening up a bulk of new things. We want to build a ton of cash through the balance of that 2019 calendar year and as a Board, we want to make prudent decisions. And one of the things that I would be in favor of which I'm sure other people would be in favor of, is using some of that excess cash to delever the company as opposed to doing other things. Now, we have historically always been a Company that focuses on buying RV dealership acquisitions and we're always going to keep our minds open to that idea particularly, when things are a little softer because, we know that the multiples drop. But, in terms of our priority, improving the health of our balance sheet and improving our leverage, even when our earnings come back is still at the forefront of the Company's objectives in its 2019 plan.

Brett Andress -- KeyBanc Capital Markets -- Analyst

Got it. And just one quick last one. How many Gander outdoor locations did you have open at the end of the quarter and how many Gander RV locations did you have open at the end of the quarter selling RVs?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

So, we have -- I don't have that number and I don't want to misquote it. But we also don't think about it that way but we have less Gander RV locations opened up. We have less Gander outdoors locations opened up -- opened at the end of the first quarter than we did at the end of the fourth quarter and we continue to think about Gander RV differently because, we actually have rebranded some underperforming locations and some stand-alone non-Camping World branded locations. And so, I'm not trying to skirt the issue but, what I will say is we have over 200 locations and if we have locations that are not profitable, we may -- we will not allow those to exist as we move forward. We are not in the business of operating any kind of location regardless of what it sells that doesn't contribute to the Company.

Brett Andress -- KeyBanc Capital Markets -- Analyst

Understood. Thank you.

Operator

And we'll go next to Fred Wightman with Citi.

Fred Wightman -- Citi -- Analyst

Great. Thanks. I'm wondering, Marcus could you just talk a bit more about what you're seeing in the used business, I know that that was something you were planning to emphasize entering the year. But, can you talk about what you're seeing from a customer perspective, inventory availability within used specifically and just how that's playing out versus plan?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, I am -- so we were up pretty nicely on a year-over-year basis in April, I don't have the exact figure but pretty nicely in use. I will tell you that the demand for used in the marketplace is very, very strong. Obviously, meaning that the supply is tight. If you go to the auctions today, prices are bringing above book value, which is a very, very strong sign, which is something we did not see in 2008, '09 where the used values are very strong. The customer still has a high expectation of what their unit is worth, if they're selling it to us outright, if they're consigning it or if they are trading it? And I have directed the team through a very formulaic process to be more aggressive on trades because, we know the market is so strong on the remarketing side -- on the auction side. We have launched aggressive consignment campaigns and we have deployed a significant amount of capital as Mel pointed out into investing, into our used inventory. As we continue to reduce our retail inventory, even if I have to take some margin compression to do it, we will redeploy some of that capital into securing more used inventory. Nobody can compete with us on the used inventory side, because every particular item is unique. And quite frankly, I still feel like we're $30 million under inventory in used today, especially when we're experiencing 5x, 6x, and 7x turns on that inventory. Until we know that there is strong demand for it, we proved it out in the first quarter. And if the new market continues to be soft, we have a counterbalance to that, which showed up in our back half of March and in our April numbers.

Fred Wightman -- Citi -- Analyst

Okay. Thanks. And then, the industry is still facing some tough wholesale comparisons over the next couple months, just based on where you guys sit in the marketplace and some of the improved retail momentum you've discussed, how would you sort of expect wholesale production cadence to shake out over the next few months?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

So we have, we can't predict what's going to happen to the rest of the market but here's what we can tell you about not ourselves. We are a a big customer of Thor, a big customer of Winnebago, a big customer of Forest River and there is a considerable amount of planning that's going on and I know that we have our orders planned out 90 and 120 days in advance, the orders that we are placing today are robust and are healthy but they are not overly aggressive. We don't see the manufacturers are opinion only. We don't see the manufacturers continuing for the entire year to have their drop in shipment numbers continue. The thing that's confusing to me and I'm sure a head scratcher for you is that we have seen manufacturer shipment data for almost six months now, that has pretty extreme drops in numbers. 20%, 30%, 40% drops. But, we have an organization, a for profit organization in stat surveys. That is an un-audited organization that is trying to convince the marketplace in my opinion that the retails were not that bad. The math is very simple for me. If wholesale shipments were down 20%, 30%, 40% month after month after month after month, and retail registrations were just perfectly fine. Then, what we would see at the manufacturers is a very swollen backlog because the dealers weren't that over inventory. The reason that I know is because, we -- as we entered the fourth quarter and more importantly entered the first quarter of 2019, our inventory was actually right on par. And in some cases in some segments ,you could argue that we were slightly under inventory and we're OK with that. And so we believe as we look at our own orders, as a giant part of this industry, that we believe that the drop in what you're seeing in shipment data will start to subside at a pretty nice pace. And I'm hoping that it gets to zero or positive, as we get into the back half of the year.

Fred Wightman -- Citi -- Analyst

Perfect. Thank you.

Operator

And we'll go next to John Lovallo with Bank of America.

John Lovallo -- Bank of America -- Analyst

Hey guys, thank you for taking my questions. I don't want to be the dead horse here, but I certainly appreciate the optimism Marcus but, we're having a really hard time reconciling how your full year EBITDA outlook can be unchanged? And I think the challenge is going to be kind of convincing the market that it's achievable and if we look, kind of at historical cadence, the first quarter has been about 20% of EBITDA, second quarter about 40%, third quarter about 30%, fourth quarter about 10%. And if we keep the guidance and change the first quarter would represent about 6% this year. So, you kind of help us kind of put milestones or goalposts on how you think your cadence is going to play out for the rest of the year?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, it's a good question. I mean, I would hope that you're not using 2018 as your allocation, correct?

John Lovallo -- Bank of America -- Analyst

Correct.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Okay. And so as we think about the balance of the year, we expect that second and particularly, the third and the fourth to be materially better than it was in 2019. And I can say that to you because we have a forecast that we provided to the market of $4.9 million to $5.1 million and $320 million to $340 million. And our first quarter performance was in line with our expectations as it relates to that forecast. So, something on a macro level would have to really fall apart for that to be challenged. And we will be the first to come back to the market ,if something changes on a macro level. But, as I look at April and I look at the back half of the year, I still feel confident that $320 million to $340 million, which is a wide range, because I can't control the macro economics is achievable and I can't today speak to whether it will be $324 million or $339 million, which is why we provided that range. We think that -- if you look at the first quarter and you match up against what the analysts provided in terms of their assessment and what our results were, there was just a disconnect on the SG&A side. And I don't want to debate who was right or who was wrong? But, I know that ours was in line with our full year forecast. And so, it could be that there could be a shift in SG&A and there could be a shift in some other things. But, top line was there and gross profit was there. And so, I don't see any reason why that's a problem. And our business is a different business today, than it used to be. And so, I don't know what historical year you're looking at? I'm assuming it's 2016 and '17 and not '18?

John Lovallo -- Bank of America -- Analyst

Correct.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes. It's our business, it's just a different business today.

John Lovallo -- Bank of America -- Analyst

Okay. And then may be moving on here. I think last quarter you made a comment about being more opportunistic and strategic about what you're buying on the new RV side. And I think you kind of alluded to a similar thought process today. Does this mean, I mean just can you help us understand, Does this mean carrying -- you're structurally carrying, less inventory than you have in the past or is it -- is it go further than that?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

So we definitely want to carry about 20% less inventory on the retail side, and I'm motivated to bring that inventory down for all the obvious reasons. But more importantly to put some cash on the balance sheet to delever the company. So that's number one. On the RV side, I was very happy at the revenue that we were able to achieve, after being down 20% on a same store sales basis for inventory. I think, when we look at location-by-location, we want to not taking any broad strokes across the entire inventory and we want to look at inventory by location. I'll give you a good example. We had a location that we were rebranding and relaunching in the first quarter. And I felt like there wasn't enough inventory there. And Matt Wagner, who oversees our Inventory said, you want more inventory? Great. You're going to close this other location that for seven years, we've made, made a little bit, lost a little bit, made a little bit, lost a little bit and it's tying up my inventory and I'm not getting a return on that inventory. Two days later, we closed that location and we reallocated those dollars. So we know that we have to be more prudent on a location-by-location basis to redeploy inventory to get the most out of it. Overall, we believe that we can do it with less inventory than we historically had. If and only if, the manufacturers get back to a regular cadence of production and not a swelling of their yards, which we think they're doing. I believe that 2018, we carry too much inventory -- period inventory.

John Lovallo -- Bank of America -- Analyst

Okay, that's helpful. And then last question from a high level, are you guys seeing any demographic trends between a new and used RV buyer and what I'm thinking about millennials and are you seeing any signs that they're just more apt to buy a used RV versus a new RV?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

We are not seeing any demarcation of demographics as it relates to new or used. The new or used decision typically is made based on payment thresholds or appetites for the type of unit they want to have for their family's needs versus what they can afford. So, that's it's just people around. We have most definitely and most emphatically continue to see a drop in the average age of our buyers, and we are seeing millennials and we strongly believe that the expanded product offering in our vault is helping that attract -- helping attract new consumers. But, we are seeing younger buyers buy smaller, less expensive tollables and we're seeing younger buyers buy big motor homes. We think the whole RV market, the mouth of the market has just widened, much like it's not your father's ultimate will anymore, RV isn't for retirees anymore, It's for people that love the outdoors and we think that market continues to get wider every single day we're here, which is why we will always make acquisitions, which is why we are a consolidator, which is why our product offering has to be wide, which is why we have to be online to track to, to attract people to our to our funnel.

John Lovallo -- Bank of America -- Analyst

Okay. Thank you.

Operator

(Operator Instructions) And we'll go next to Brett Jordan with Jefferies.

Brett Jordan -- Jefferies -- Analyst

Good afternoon. Quick question on used. I guess as you look at the used environment you talked about inventories being tight and your comp was down, I guess 5%, were you inventory constrained or does that performance largely stock up in line with what used did industry wide in the quarter?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

You're referring to our used being down, sir?

Brett Jordan -- Jefferies -- Analyst

Yes, as used vehicle same store sales decreased 5.2% to 7,615.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, on a same store basis which performs materially better than our new inventory. I think at the end of it -- I think it's the end of the day, there's a couple of issues, right? One is the access to the inventory and our willingness to step up for it. And there's always a fine balance between overpaying and getting stuck with it and putting the right inventory on the ground. There is no glut of inventory and as we went through the 2008 and 2009 downturn, the inventory was plentiful because the foreclosures had ramped up and there were manufacturers and floor plan lenders foreclosing on dealers. And that created a glut and a suppression of the used values. Today, because the overall RV market is so much bigger, the number of buyers in the marketplace is so much bigger. The demand for inventory has gotten so much bigger and the supply is not what we would like it to be unless you want to step-up and overpay -- way overpay over the book. So, we're trying to find that balance. The challenge that we have in that model is that you don't want to and this is an important note, you don't want to step up and buy or trade for late model use units that could be compromised by heavy discounting, by distressed dealers or distressed manufacturers with new models that may be '18 to '19. So we see people trading for 18's and 19's all day long. It's an oddity that exists, until we're having to be careful that we don't step on ourselves because we still have certain dealers in certain markets that are in real trouble that are having to liquidate their new 18's or their new 19 had values because of curtailments that are that are putting pressure on that. Where we're stepping up as on 2014 -- 2013, '14, '15 and '16. And that's really what our targeted sweet spot is. That's the kind of inventory we're looking for.

Brett Jordan -- Jefferies -- Analyst

Okay. Great. And then one follow up on Amazon. Is this product that you're selling to them for fulfillment or are you doing P3, where you're listing your product online and doing your own fulfillment?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

A combination of both. We don't have that mass distribution that they have. So, we have agreed to both turn our Greenville distribution center, which is now done into an Amazon compliant facility and those standards were very high as you would imagine. And then we are also going to be shipping product to other Amazon fulfillment centers as well. So, we're looking for how do we ultimately maximize the channel revenue. We know that we can't -- we have to play on both sides of the sandbox.

Brett Jordan -- Jefferies -- Analyst

Okay. Great. Thank you.

Operator

And now we'll go next to Gerrick Johnson with BMO Capital Markets.

Gerrick Johnson -- BMO Capital Markets -- Analyst

Good afternoon. First, just to clarify the new RV inventory down 6%, is that a year-over-year figure?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, it is.

Gerrick Johnson -- BMO Capital Markets -- Analyst

Okay. Great. And then can you talk about -- well first of all, the same store product service and other decreased 10%. Can you talk about the performance of the outdoor lifestyle product AK, the legacy Gander product, is there any way to quantify that performance on a same-store basis?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Unfortunately, those stores were not we're not even open the bulk of them, I think only one or two of them are open for the full first quarter. So, we don't have that data yet. In certain cases that legacy product in some markets is performing very nicely. In a small handful of markets, it's either flat or slightly down and we're keeping an eye on those locations as we pointed out. We did see some pressure in January and February largely attributable to some unfortunate disaster weather that we had where we had traditional Camping World parts and accessories stores closed in markets like New York, Michigan Pennsylvania, Colorado for several days. And so, we did take it on the chin a little bit in the early part of the quarter in some of those markets. And we also have noticed that there's been a slight shift where some of the more consumable products, the non-installed products have shifted online. And so we're watching that closely to ensure that that location profitability isn't impacted. But, we did see some softness based on weather in the early part of the quarter.

Gerrick Johnson -- BMO Capital Markets -- Analyst

Okay. Great. Thank you Marcus.

Operator

And we'll go next to Tim Conder with Wells Fargo Securities.

Tim Conder -- Wells Fargo Securities -- Analyst

Thank you for taking my question. Just wanted to be clear, the down 3% to 4% Marcus, that was your comp store unit sales expectations for 2019 or is that dollar expectations?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Same store dollars for 2019.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Okay. On RVs. Okay. And then your industry expectations for retail, you want to prognosticate there or is that still down in that similar area?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

I don't have an opinion on the industry, in our opinion, we're a great bellwether for the industry but we don't want to speculate. What we do know Tim and I know you're a scientist of the numbers. We expected as we told everybody that the first quarter would be more difficult because the industry as a whole, as you saw with store Winnebago, there were some big golf numbers. I mean I think we've seen some some big numbers coming out of the manufacturers. We knew that we had a big hurdle in the first quarter. And as we accelerate into the year, particularly into the third and fourth quarter, we expect those comp numbers to be easier to hurdle. We do not by any stretch of the imagination think 2019 is some bellwether year. And we all know that there is some softness what we have to do is realign our management team. We dramatically cut SG&A in the first quarter which will have its effects in the back half of the year. And we know that the RV sales numbers should stabilize as we get deeper into the year. April is a good example. It wasn't positive comp, but it was a heck of a lot better than what we saw in the fourth quarter. And candidly even in January and a good chunk of February.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Helpful there. And the used strategy --

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Just to give you a little more color. April, this is a very important note. April -- the month of April was the biggest April in top line in the Company's history.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay, but again the down 4% was a comp basis, right?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yes, sir.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay, on the -- on your used strategy. So your used units were down a third of the rate of new on a comp store basis but ASPs increased. So the pivoting there looks bearing fruit there given the backdrop. Can you give us the color maybe on how those margins are trending year-over-year versus used versus new?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

The used historically has always performed slightly better. We still saw some margin compression as you would have imagined in the first quarter on new, with you know manufacturers still trying to get out of the few things. Dealers Still trying to get out of a few things. And of course, we're wanting to compete. We don't feel the need to liquidate inventory because we're over inventory. We feel the need to sell inventory to remain competitive but not unprofitable. The used margins performed better, by I think and I don't have it in front of me. I think it's about 4% to 5% on a percentage basis. We think there still is room for opportunity. We made the decision to be more aggressive in liquidating some aged inventory that was from September, October, November, December. As we do in the first quarter every winter, right? You look at the stores in the north that that unit sat in snow for a while. We want to get that stuff started and going. And we tightened up our aging policy on use pretty significantly. We changed -- we lowered the standard of acceptability by 90 days. And so we did gas a little bit of inventory in the first quarter that we don't anticipate having to continue to do. But it's still in spite of all that still performs materially better in my opinion than new.

Tim Conder -- Wells Fargo Securities -- Analyst

So just to be clear, your gross margins on used in Q1 were about 400 basis points to 500 basis points higher than the new margins?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Yesm sir.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay, OK. And I think long-term historically, it's been in that 5% to 6% and a couple of years got up close to a 1,000 basis points, but just kind of want to get an indication of where those are. And then may be one for Mel --

Marcus A. Lemonis -- Chairman and Chief Executive Officer

And Tim, I'm being uber conservative when I give you those numbers, I want to just put that extra color on there. I'm being uber conservative, when I say that it's the gap is probably wider than that and I don't have it in front of me. And so I don't -- because I've learned my lesson. I'm being uber conservative in that number.

Tim Conder -- Wells Fargo Securities -- Analyst

That's make sense that to if you were as you said liquidating some little bit more aged inventory that that would compress --

Marcus A. Lemonis -- Chairman and Chief Executive Officer

No, no, but what I'm saying is I know it's better than the 4%. I'm being uber conservative.

Melvin Flanigan -- Chief Financial Officer and Secretary

Yeah, Marcus it's exactly 7% or 8%.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. So 7% to 8%. Okay. And then Mel, with the change in the lease accounting did -- everybody knows there's going to be grossing up at the balance sheet as a result of that new pronouncement but is there any impact to your P&L from implementing the new lease accounting reporting rules?

Melvin Flanigan -- Chief Financial Officer and Secretary

No, not really -- no.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Okay. And then lastly, if I may, any stats that you can give in terms of your repeat RV purchaser within the Camping World network and then, how that's gone over the last say three to five year trend? And then whether you want to pull in the Gander locations and all that too but I know that truly shouldn't matter here at this point but just anything you can give, any color you can give on that perspective?

Marcus A. Lemonis -- Chairman and Chief Executive Officer

I don't have that data available. And with the addition of people like Russell Gentry, we're going to be providing at least internally those types of dashboards. So that we understand how to better manage our database. You'll have a giant relationship with Salesforce. We need to get more out of that machine. We need to be more efficient with understanding, who our customer is and what they have. And one of the challenges historically and quite frankly, even today is that Good Sam, the retail business and the dealership business for a multitude of reasons, operate on disparate systems because of the type of DMS that those businesses need to have. And so we're continuing to work on how to consolidate that, that customer data so we understand what Joe Smith has and doesn't have with us. And then we build our marketing, either through digital marketing, email marketing or print marketing, based on their behavior. We don't have the data like we should Tim, but we're getting better fast.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Thank you, gentlemen, for the color.

Operator

At this time, I would like to hand the call back over to Marcus Lemonis for closing remarks.

Marcus A. Lemonis -- Chairman and Chief Executive Officer

We couldn't be more excited about where our Company is going. We feel very confident about the management additions that we've made, very confident about the SG&A, reductions that we've made. And we have put a stake in the ground as the number one RV retailer in America. So we expect to continue to perform and look forward to reporting the next quarter. Thank you so much.

Operator

That does conclude today's conference. We thank you for your participation.

Duration: 66 minutes

Call participants:

Brent L. Moody -- President

Marcus A. Lemonis -- Chairman and Chief Executive Officer

Melvin Flanigan -- Chief Financial Officer and Secretary

Rick Nelson -- Stephens -- Analyst

Craig Kennison -- Baird -- Analyst

Brett Andress -- KeyBanc Capital Markets -- Analyst

Fred Wightman -- Citi -- Analyst

John Lovallo -- Bank of America -- Analyst

Brett Jordan -- Jefferies -- Analyst

Gerrick Johnson -- BMO Capital Markets -- Analyst

Tim Conder -- Wells Fargo Securities -- Analyst

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