Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Camping World Holdings Are Down Today

By Lou Whiteman - Mar 11, 2020 at 1:02PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Will consumers buy RVs in a recession?

What happened

Shares of Camping World Holdings (CWH 3.17%) traded down 13% on Wednesday and are now down 34% over the past five trading days, despite no company-specific news. In theory, the COVID-19 coronavirus-related travel plunge could be good for business, encouraging consumers to avoid planes and hotels and go camping instead. But investors appear worried that consumers are in no mood to buy.

So what

Camping World shares have struggled since the company's 2016 IPO, losing more than 64% of their value in the years since. The camping and recreational vehicle retailer has been plagued by an industrywide slowdown in RV sales, coupled with company-specific issues including its ill-fated decision to buy the Gander Outdoors brand.

An RV driving down a desert road.

Image source: Getty Images.

The company has been attempting to revamp its operations and unwind the Gander deal, but as part of that process, it has reported quarterly losses due to heavy discounting and liquidation of inventories.

Camping World has a long road ahead as it plots a recovery, and that challenge only gets more daunting if the U.S. economy falls into a recession and consumer spending is pinched.

Now what

Camping World did offer some reasons for optimism in the company's Feb. 27 earnings report. Active customers increased by 1.3%, and the number of members enrolled in its Good Sam roadside assistance program increased 1.4%.

It's too soon to say if coronavirus-related concerns will stem that momentum. But given Camping World's challenged recent history, investors can't be blamed for not wanting to hang around to find out.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends Camping World Holdings. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Camping World Holdings, Inc. Stock Quote
Camping World Holdings, Inc.
$30.95 (3.17%) $0.95

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.