Shares of Camping World Holdings (NYSE:CWH) popped on Monday morning after the company announced encouraging business results and a $100 million stock repurchase plan. As of 11:20 a.m. EST, the stock was up 13%, and it has now more than doubled year to date.
For the third quarter of 2020, Camping World's revenue grew 21% year over year to $1.7 billion. That was an acceleration from the 9% growth the company reported in the second quarter. The strong demand for recreational vehicles (RVs) resulted in diluted earnings per share (EPS) of $1.44. This was a night-and-day improvement from the $0.82 loss per share it reported in the same quarter last year, crushing analyst expectations.
Camping World management will discuss Q3 results in a conference call this afternoon, but it's clear that it's upbeat about the quarter. In the Q3 press release, CEO Marcus Lemonis said, "Coming off of an extremely positive second quarter, demand remained strong and we were able to achieve record breaking third quarter results."
Camping World management is authorized to buy back $100 million in stock between now and Oct. 31, 2022. This could modestly help grow EPS over the next two years. Considering the company's market cap is currently $2.65 billion, the authorization is for about 4% of shares.
In September, Camping World outlined some new long-term growth initiatives, which will be more instrumental to growing the bottom line. The company will launch some technology products in the RV space like a valuation product and a peer-to-peer rental marketplace. Furthermore, the company is preparing an RV-maintenance marketplace in which independent repair shops will pay Camping World a subscription fee to be included.