Good morning and welcome to the Camping World Holdings conference call to discuss financial results for the third quarter ended September 30th, 2026. At this time, all participants are in a 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. Joining on the call today are Matthew Wagner, Chief Executive Officer and President, Tom Kern, Chief Financial Officer, and Brett Andress, Senior Vice President, Investor Relations. I will turn the call over to Mr. Andress to get us started.

Good morning and thank you everyone. A press release covering the company's third quarter ended September 30, 2026. Financial results was issued yesterday afternoon and a copy of that press release can be found on the investor relations section of 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 plans and goals, macroeconomic and industry trends, customer trends, inventory strategy, future growth of our operations, capital allocation, future financial results and position, future SG&A savings and operating efficiencies, potential refinancing of our senior secured credit facilities, and 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 of our Form 10-K, our Form 10-Qs 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 note that we will be referring to certain non-GAAP financial measures on today's call, such as EBITDA, adjusted EBITDA and 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 statements are included in our earnings release and on our website. All comparisons of our 2026 third quarter results are made against the 2026-2025 third quarter results unless otherwise noted. I'll now turn the call over to Matt.

Thanks, Brett. Good morning, everyone, and thank you for joining our third quarter 2026 earnings call. We will walk through the quarter's results, the timing of our cost reductions, and our priorities as we prepare for 2027. When we spoke in July, we expected vehicle margins to improve as we moved beyond the inventory actions taken in the first half of the year. Both used margins and GPU improved, but new margins declined further as demand weakened and promotional pressure intensified across the industry. In the third quarter, We reduced SG&A by another $24 million year over year, but those savings did not offset the decline in gross profit. That said, I am tremendously proud of our team and the measurable progress made against key priorities this quarter. We grew our new vehicle average selling price by nearly 12%, driven by share gains in fifth wheels and motorized. We improved used vehicle gross margin 150 basis points sequentially to 18%, on leaner, fresher used inventory. We expanded Good Sam's services and plans gross margin to over 62%. We reduced our SG&A roughly $80 million year to date. And through the first nine months, we generated $488 million of operating cash flow and reduced floor plan borrowing by $349 million, ending the quarter with over $260 million of cash. We entered the fourth quarter with a largely rebuilt call space and a healthy inventory position. These are the building blocks of a stronger company, and I am proud of the way this team continues to execute. For the quarter, our reported adjusted EBITDA was $36 million, and I'll note this also includes the unfavorable impact of $12.7 million of an F&I chargeback reserve adjustment, which, excluding this charge, would have been $49 million of earnings. The new vehicle market became increasingly promotional as the third quarter progressed, as competing dealerships who had not de-risked their inventory in the first half worked to aggressively move aged and prior model year units in the back half of the selling season. We made the decision not to chase that pricing, and it cost us some unit volume and some new unit market share in the quarter against last year's record. But we would make that trade again at these margins if we had to. New gross margin came in at 10.2%, and this was a significant driver of the results in the quarter. Turning to used, same story units were down about 9% in the quarter as the broader used RV market softened starting in August, but we held our pricing discipline. The result was an 18% used gross margin up from 16.5% in the second quarter on reduced used inventory levels that are turning faster. I want to put a finer point on the current health of our inventory position. Our mix of prior model year new RVs in the ground is the lowest it's been in five years. And we reduced the position of our used units aged over 180 days by the largest amount in the last six years. Our aged used inventory is now down roughly 25% on a cost basis from a year ago. Turning to SG&A efficiency, in July we laid out $100 million of annualized savings across 20 initiatives, and when new margins came under greater pressure than we anticipated, we moved. Between August and September, we reduced our headcount by nearly 15%. We expect those actions to generate at least $50 million of incremental annualized savings reflected in our run rate beginning in the fourth quarter. We closed four dealerships, two of which we intend to reopen when the market supports it. And we accelerated the July savings program on top of that. The in-house RV sale CRM we built in four months was in five stores when we spoke in July. By the end of September, it was live in all of our locations. The third-party systems it replaced are retired along with their license fees, and the service CRM is following on a similar path. Our new CRM is already helping us deliver a better customer experience with faster response times and more consistent follow-up. In early post-rollout observations, We saw initial outreach within five minutes increase by over 150%, and the time gap between lead and first interaction declined 70%. We are also seeing notable increases in appointments per lead and show rates. In short, we are seeing less friction for our customers and more productivity out of our sales professionals. We expect fourth quarter SG&A dollars to be more than $50 million lower than last year. These actions are intended to improve operating leverage, support margins, and strengthen cash flow. There is more work to do, but the operating model and cost structure entering the fourth quarter are meaningfully different from a year ago. Switching over to Good Sam, the services and plans segment gross margin expanded over 550 basis points to 62.3%, and the segment held adjusted EBITDA flat at $21.4 million on lower revenue. With the system's overhaul complete, the team is now able to sell our extended service, roadside, and insurance products to other dealers and partners at scale for the first time. Good Sam is recurring, it is capital light, it runs north of 60% gross margin, and it is tied to the 6 million RVs on the road. It remains a cornerstone of our long-term growth, and we believe it is a strong demonstration of why our model holds up better than unit sales suggest. More than 60% of our gross profit now comes from F&I, service and parts, and Good Sam. Before I hand it off to Tom, I want to spend a minute on some of our initial thoughts on the RV industry and our business entering 2027. Through August of this year, total combined new and used retail registrations in the U.S. tracked down 4.5% year to date, consisting of new down 16% and used up 1%. And if you look at our business on that same basis, This is similar to how our new and used business trended over this period as well. At this point, we expect that a lot of the underlying macro trends weighing on consumer sentiment today, like energy prices and general inflation, are likely to remain in place into early next year. And if these conditions hold, we would expect industry-wide new retail to be roughly flat to down mid-single digits, and for used retail to be roughly flat. For the fourth quarter, we are expecting total new and used unit volumes to decline at a similar pace to what we experienced in the third quarter on a year-over-year basis. I'll now turn the call over to Tom.

Thanks, Matt. As we recently communicated, we expect full year 2026 adjusted EBITDA to be below the low end of our previous guidance range. We expect fourth quarter SG&A to improve by more than $50 million year-over-year. While total unit sales trends have shown periods of stabilization from August through September and into October, front-end margins remain under pressure. The fourth quarter is typically our seasonally lightest period, and changes in unit volume and margins can have a significant positive or negative effect on earnings. Given that variability, we are not providing a full-year 2026 outlook at this time. Now I want to provide some modeling clarity to help reconcile two separate cost program numbers we've spoken to. Last quarter, we outlined approximately $100 million of structural SG&A savings. In October, we added at least $50 million more through additional headcount and footprint actions, bringing the total of our annualized cost program to over $150 million. To keep all of these cost savings simple, We expect to end 2026 with our SG&A roughly $130 million lower than 2025. This would represent the largest annual year-over-year SG&A decline since our company has been public, both in dollars and percentages. For 2027, we expect to realize an incremental $75 million of savings for the year, and we also expect gross margins to normalize slightly over the course of the year. These two dynamics, combined with some ordinary cost inflation, are expected to yield roughly $60 to $70 million of additional earnings benefit next year. We ended the quarter with $263 million of cash and $444 million of working capital, driven primarily by the working capital benefit from lower inventory. The book value of our real estate without an associated mortgage at the end of the quarter was just over $200 million. year-to-date we've spent roughly 92 million dollars in gross capital expenditures before sale leasebacks for 2027 we expect gross capital expenditures to be below 80 million dollars in the quarter we also amended our mortgage facility with M&T Bank extending its maturity to August 2031 as a reminder the term loan is scheduled to mature in June 2028 and we continue to evaluate refinancing options for the senior secured credit facilities to increase financial flexibility. Finally, as a frame of reference, based on the cost measures we've taken and our restraints on capital expenditures, we currently expect the business to generate positive free cash flow in 2027, including after giving effect to a potential refinancing of our senior secured credit facilities. With that, I'll turn it back over to Matt.

This quarter, we've implemented additional cost actions reduced our exposure to older inventory and improved our cash position and continued to expand margins and good sales. Our priorities are clear. Remain focused on SG&A efficiency, maintain inventory and capital discipline, and execute consistently against the demand in front of us. We will now turn the call over to Q&A.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from James Hardiman at Citi.

Hey, good morning. Thanks for taking my questions. So, I was hoping you could sort of walk us, well, I guess take us back to the second quarter call and sort of walk us through what you saw from an industry perspective and within your business. You gave us some breadcrumbs and prepared remarks, but just wondering how things trended over the course of the quarter and into the fourth quarter, but a particular focus on sort of that September-October period where Morning, James.

And just to take us back from the second quarter call to where we are today, we ended July, and we suggest in the Q2 call that we were facing acute sales pressure on new RV sales in particular. And we ended July with new same-store sales being down high 20s. And then we transitioned into August, and we saw that our trend line had slightly improved, but we were still down low 20s. Transition into September, we were now down high teens, and then as we ended October just a couple days ago, we actually ended down low teens. So we've seen sequentially on the new side of the business that our year-over-year trend has improved sequentially. Bear in mind, though, in July and August, we were quite stunned by the promotional activity of our competition out there, and we also recognized that in order for us to offset that general gain in sales, we at that time would have had to reduce our margins to uncomfortable levels. where we would have barely covered our cost of capital, never mind the fixed cost that exists within our business as well. We were able to get a little bit more creative in terms of sourcing inventory over that time period to actually improve our general margin profile from what was a pretty reduced amount in July once we consolidated the entire elimination. And we realized that we could then very gracefully start to glide into this period on the new side of the business where not only could we at least bottom out our margins and not go below that 10% threshold. And rather, as we forecast out for the balance of this year, we believe that our new margins will continue to slightly improve, where we think we can get another 50 to maybe 100 basis points of improvement from Q3 into Q4. But just as well, we realized that we couldn't necessarily continue down that trajectory of reducing margins and feeling that pain on the volume side just as well. On the used side, that's where it was a little bit different trend line, where in July we were roughly flat down, single digits. That persisted throughout August. But then in September, there was a little bit more pressure on the used side. And what we realized at that point in time was that we had been so conservative in replenishing our used inventory portfolio, and we still believe that was the right approach in so much as there's a lot of things that could happen in Q4, never mind as you're preparing for Q1 on the used side of the business. and as we stated previously, James, new invoice prices and new pricing can have a disproportionate effect on the used marketplace in particular. So if you take in combination with our competition reducing their prices being very promotional on the new side of the business in the summer months, that gave us a little bit of pause to consistently replenish on the used side of the business. Now that we're getting into further in the fourth quarter, we're starting to prep for next year, We're starting to see a cleaner line of sight of where new invoice prices are settling down and also how we need to start to play the new side of the business, but also really providing greater clarity on the used side and where we can start to get a little bit more aggressive in our pursuit of certain used cohorts and vintages heading into next year.

James, the only thing I'd add from an industry standpoint, if you're thinking about the progression from on new RV sales from August to September to October. Based on what we can tell from our internal data, from a number of different data sources that we use, I would say that September probably got a couple points marginally, I think worse from a headline basis on the new domestic RV side. And based on what we're seeing in October, the industry probably was maybe a point or two worse than that. So I think just a little bit of degradation on the headline. But again, our trends are bucking that, as Matt alluded to in his comments.

Got it. That's really helpful. And then as we think about 2027, obviously too early to give hard guidance, but we're starting to see the framework of a bridge, right? If the industry is flat-ish in terms of both new and maybe down a little bit in terms of new, but flat-ish, let's call it, overall, based on what you laid out. And then we've got, you know, $75 million of SG&A, another, I think you said 60 to 70, maybe on the gross margin side. You know, starting with this year's EBITDA, you know, it sounds like we should, you know, as we're bridging, we can add those cost saves. But I'm sure it's not that easy and that there are sort of offsets to some of those cost savings that we should be factoring in, whether it's the conversation around pricing. I'm not sure if that's going to be a positive or negative. And then we really haven't talked a lot about inflation, which is, unfortunately, yet again, a big topic across, you know, power sports and really across the broader market. So help us think through what other pieces that we should be, you know, adding or subtracting to the math that we've already got beginning to come together.

So I think you actually just hit home on the principal inputs and variables where you are right. There's a $75 million of cost savings. We do believe that there's going to be some gross margin normalization, where I would anticipate an improvement of 100 to 150 basis point improvement on the new side in particular, and on the used side, probably another 100 basis points, give or take. But then also you hit home on the final variable, general cost inflation, which we know inflation generally is in that 2% to 3% range, and that'll just flow through the entire P&L in terms of general wages and general freight costs and a variety of other factors. But in terms of the general bridge, you almost need to start with where do you think this year ends, which we believe, as we said in the prepared remarks, that our fourth quarter is going to have units down, you know, combined, new and used, down mid-teens. New might be down in that same range, used a little bit less. And then in terms of margins, we think it'll be slightly better compared to 3Q. And SG&A will be down, though, $50 million year over year. So if you start from that bridge and then you build to that 2027 bridge, you're in that range.

Got it. That's helpful. And just to clarify, the 2% to 3% normal inflation is pretty consistent with what you would anticipate for 2027?

Yes.

Got it. Very helpful.

Thanks, guys.

Our next question goes from John Healy at North Coast Research.

Thanks for taking the question, guys. I was hoping, Matt, you could talk a little bit more about gross margins on the new side, not necessarily next quarter or even next year, but where do you think those are long term? Because to me, outside of SG&A, that's the biggest variable to get to some sort of estimate of a real earnings power of the company. So just your thoughts on, you know, is this still a low to mid-teen business? on the new side? And how do you see us potentially going from here on a multi-year, a three-year outlook or something like that? Thanks.

Thanks, John. And I think you have to break this out into two separate categories, short-term versus long-term. I would anticipate, just given the general pricing pressures that exist in just about every industry right now and where consumer sentiment currently is sitting, that and never mind how interest rates rose pretty considerably over the last year. I think for the American public, it just takes a moment to absorb an interest rate increase like that and then just perpetual inflationary costs. So short term, I would suggest that we could see a little bit of an improvement over the next six months to a year, as we suggest maybe another 100 basis point improvement compared to where we'll end this year. Long term, I'd anticipate as household income continues to grow and general wealth continues to grow and then that initial blunt object of just interest rates going up, I think once that's absorbed by the American public, then this business should get back into that 13% to 14% new gross margin range. And on the used side, we've shown that we're a bit more resilient in terms of maintaining that margin profile with about an 18% margin profile. That could go up a little bit, though. That really comes down to more of a sourcing and also which vintages that we're zeroing in on. We have already played out this concept, though, that those consumers that bought between 2020 and 2022 found themselves in a higher negative equity position. So we've realized it's taking them longer to self-heal their balance sheet and just get back to that manageable equity position. So in those specific cohorts, we're not quite seeing that margin improvement yet, but we are seeing those customers with a greater willingness to actually trade in their assets. So, John, we're really more interested in kind of this recurring game of taking a customer in that we previously sold to, trading in that asset, and then so goes the cycle over and over again. I'd be less concerned long-term of the general margin profile as long as we can get these customers back into the cycle of trading in their assets every three to four years, which we know that was more of the norm historically. We've seen, though, customers sitting on the sideline for a little bit longer than we'd like. where our average age of a trade-in right now is about seven and a half years. We'd like to see that be more like four and a half years, in which case the annual lifetime value of these customers continues to expand, nevermind long-term as margins recover.

That's helpful. And then one question for Tom. On the financing side, any color you can give us about progress so far on that side of things or any sort of early takeaways on maybe just how cost of capital is Evolving and Changing for you guys. Thanks.

Obviously, we released the 8K and I mentioned it in prepared remarks, but we're exploring refinancing to increase financial flexibility. We've got time on the maturity wall and we're considering a range of alternatives, but more to come and we'll update the market as it progresses.

We also know, John, last time we refinanced was in 2021 and our rate is very favorable right now. So we would anticipate that rate going up to what order of magnitude, don't quite know, but we think it'd be manageable, as we said in our prepared remarks as well.

Thank you, guys.

Our next question comes from Joseph Altabello at Raymond James.

Thanks. Hey, guys. Good morning. Your first question for you, Matt, you mentioned you were surprised at the level of promotion intensity from some of your competitors, given given their inventory situations. I'm guessing there's some seasonal aspect to this, but have you seen any easing of that promotional intensity or do you think that continues potentially into next spring?

I think it's eased up a little bit from what we saw in July and August in particular. I don't know this for a fact, but I believe that a lot of our competitors got beyond peak selling period in May and June, which oftentimes are going to be the greatest yield in terms of overall volume, and realized that they had way too much inventory still sitting on their lots. Prices were reduced pretty extensively throughout July and August, where we were seeing a lot of competition advertise 37% to 40% discounts off MSRP. which Joe, as you know, typically in our industry, it's like a discount of maybe 27 to 30% and that's kind of a norm. But that was rampant across the industry for a period there. And while we had reduced our inventory levels and taken the pain of reduced margins prior to that time period, we also will fall victim to just competition, reducing prices, ultimately you have to sell something. And we just took that maximum pain threshold that we could tolerate Before just saying, you know what, our inventory levels have, in a relatively good position, as we said on the call, we've reduced our age inventory substantially. We have a healthy complexion of multi-year 27s compared to 26s. And even on the used side, we've reduced our used inventory pretty substantially. So we're sitting in the advantageous position. I've done a lot of work, really, for this ultimate moment, heading into Q4, which we've said very clearly to the public markets that we were going to do a lot of work, and we expect to yield some material results by Q4 of this year in terms of changing our cost structure, rectifying our inventory position, and really being able to take advantage of the opportunity in Q4 and beyond. So we believe that we've been able to separate ourselves from the competition. As we sit here today, about 61% of our new assets are model year 27s. whereas we believe just about every other larger multi-dealer network out there has no more than like 40 to 45% of their new assets being model year 27s. So we're well ahead of the curve. We've been able to work with the manufacturers to put ourselves in a very healthy position to at least start to normalize and improve our margin profile.

Yeah, but I guess what I'm asking is like if the industry hasn't gotten materially better from an inventory standpoint, are we in the same spot next year?

I don't think so because you've seen a heavy reduction of general wholesale shipments compared to retail activity, so there hasn't necessarily been this aggressive approach to replenishment of assets. So you have to assume at such point as the competition starts to sell out of these assets, they're not replenishing at that same aggressive rate, then you start to see a general normalization of margin.

Okay. And just shifting gears over to the balance sheet, obviously leverage kicked up here. Is there any thought to monetizing some of your assets? I know you've You've talked about Good Sam in the past. Could that be on the table, or is the plan to kind of grow out of that?

We have no plans at the moment to sell any assets. We have, of course, looked at some of our dealerships that we've recently closed, and we'll look at selling some of that real estate. But devoid of that, we feel very confident with our long-term game plan, as we stated very clearly to the public markets, Good Sam is a cornerstone of our business, and we know that we can accelerate the growth there in very unique and interesting ways for the future. The dealership business right now is in a trough marketplace. And when we think about the upside, as you know, Joe, when this thing turns very quickly in the market, and never mind how we've reset our cost structure, the free cash flow that will throw off can be quite considerable throughout the dealership business.

The leverage improvement is really going to be driven by the SG&A cost programs that we've announced, the $100 million, the $50 million, and the restraint that we're showing on CapEx and expect to continue to show heading into next year on that side.

Got it. Okay, thank you, guys.

Our next question comes from Tristan Thomas Martin at BMO Capital Markets.

Hey, good morning. Morning. Just out of curiosity, what kind of gets us to flat retail next year versus down to single digits?

We believe that the first quarter of last year was negatively impacted by weather. Never mind, by Q2, that's when we started to feel the full effects of geopolitical tensions and general consumer sentiment being negatively impacted to a degree or the likes of which we had not previously seen. So when we think about the opportunity for next year, it's really just comping against pretty manageable comps. Severe weather impacts in Q1, and by Q2, that initial blunt force of just a war kicking off. And consumers settling into a reality that gas prices were going up pretty considerably, and general inflation with just generally necessities of goods, never mind discretionary pricing, was going up pretty materially. So as things just level off across just the American public, that's where we've shown as an industry, as long as consumer sentiment starts to rebound, which, by the way, we saw consumer confidence readings improve a couple weeks ago. We're waiting to see what this next consumer sentiment reading will be out of University of Michigan. We believe that customers are kind of settling into this, and today's kind of a big day. There's a few things happening. We're coming off of today. I think that there's going to be an opportunity for a rebound here just for the consumer public to be more confident, stepping into a lifestyle that they love. We have over 6 million RVers out there in America, and they'll continue to engage in this lifestyle. As we've shown, that number has been quite resilient and actually has grown, where we went up to 6.1 million with the most recently reported RVs in operation. So that's really what we're applying for, just very logically. This is an industry and a lifestyle that's alive and well.

And I would just say to put a little bit finer numbers on that, if you were to just freeze consumer sentiment and a lot of the other variables where they're at today, Roll that forward. As Matt said, we do have, you know, if you look at the comps, there's kind of a pre-war comp and a post-war comp. If you look at, you know, 2027 and how that could play out, freezing everything today would get you closer to that down mid-singles. I would say, you know, should we get some easing of any of those variables, whether it be confidence, whether it be inflation, or any of those are sentiment metrics, that would kind of tilt you higher up into that, you know, flattish type range.

Okay. And then how are we kind of, maybe it's a tight end question. Also, Matt, I feel like a lot of things happen every day. How are we thinking about affordability kind of moving in 27 and 28? And then how does the potential LCI Patrick merger factor into that thinking?

Well, what we've seen so far is that new invoice prices did have a nominal increase of like 2% to 3% across the board. which that's roughly in line, actually slightly below inflation in broader industries. So we feel okay with how we are currently positioned. We've also had to get creative in terms of just changing the general inventory mix that we had rolling into this year and rolling into next year we'd anticipate that there's going to be certain price points we'll be able to take advantage of. I'm not thinking that our average sale price will necessarily go down materially because we do believe there's opportunities on both sides of the bell curve More inexpensively priced assets as well as more expensively priced assets where we've seen in certain segments that we've actually lost the market share. And then when we think about it in the context of a Patrick and Lippert potential merger, I mean, my opinion is it would still take quite a bit of time. I do believe that they said very publicly that their goal seek would be to reduce general cost and pricing. We work very effectively with them through a variety of different lenses, especially in the aftermarket. So it would be our hope that we can continue to work collectively to drive down the overall price of these assets to ensure that we're continuing to propel demand for consumers. Because no matter what, we'll look through the lens of every potential merger acquisition of, is it good for the industry, is it good for us, and ultimately, is it good for consumers?

Great. Thank you.

Our next question comes from Noah Zaskin at Kibon Capital Markets.

Hi, thanks for taking my questions. I guess first, could you maybe speak to the complexion of the incremental cost saves that you've identified for next year and the degree of visibility there, and then any color around kind of timing and realizing that? Thanks.

Sure. Thanks for the question on that, Noah. I think we've previously talked about the $50 million really coming from a lot of headcount rationalization efforts as well as a couple of store closures that we announced. We announced four store closures in the quarter. And then for the $100 million program, about half of that was going to come from really some efficiency programs within the personnel and cost base there, and then with the balance of it really being driven by a lot of AI-enabled initiatives to reduce our software costs and increase operational efficiency. Of the $100 million, we had expected about $50 million of that to be completed by the end of the year and in the run rate, and we feel good about where all of those initiatives are stacking up. As Matt had previously alluded to, We had over 20 programs or initiatives as part of that $100 million program, and we're on track to execute on that plan as we sit here today. And the $50 million that we announced separately is done at this point.

Got it. That's helpful. And I think you maybe touched on this a bit, but in an environment where RV retail comes in worse than maybe down mid-single digits, could you speak to The levers that you have there may be outside of the planned cost saves.

Thanks. I mean, as any large retailer, we always look at the efficiency of our store base. And we look at those stores that are maybe on the bubble and maybe underperforming. And that's something that you've seen us the last couple of years look at and rationalize and consolidate where it makes sense. At this point, we're trying to stay focused on this store base. because we do see the value in the origination source there for Good Sam and what that does for supporting the installed base of 6 million RVers through our PS&O business, through the finance products that we offer, etc. But that is something in a market that continues to, if it does inflect more negatives than that, that is a lever that we would absolutely have to look to pull on as any retailer would.

We feel good that we'd be able to make modifications as necessary. Thank you.

Our next question comes from Scott Stember at Roth Capital.

Good morning. Thanks for taking my questions as well.

Morning.

Just talking about the cost cuts, you did say that there were some dealerships that were closed, but you reserved the right to reopen them. So I'm just trying to get a sense of when you look at the entire $150 million worth of costs that you've identified, how much of it could potentially be Thank you for joining us.

But also just inherently, if we do start to see some volume trends improve and some other things improve in our business, we would reserve the right to rehire folks into those positions heading into the summer selling season. So we disclose that as more of a net number so that we could all get behind and feel very comfortable with heading into next year.

Got it. And then on the service side, The comp was up a little bit or flattish, but margins were down pretty significantly. Could you talk about what was behind that? I think you guys said that it sounds like it was lower margin, just less labor-intensive type of business. But could you talk about what happened with the margins there? And a follow-up to that would be, if you used remains under pressure like this, does that give you more capacity? to handle some of the pent-up customer pay work.

Scott, I know that you've been very focused on this line item in particular, and I can tell you this last quarter we used this as an opportunity to develop an entire win-back campaign for customers that we just no longer were engaging with through our service channel in particular. And as we've spoken about publicly, especially as a result of some of the questions you've asked us, Scott, We don't actually have that recurring revenue with customers as automotive dealerships oftentimes enjoy. So we used this quarter knowing that customers wanted to hold on to their assets for a little bit longer. They weren't necessarily trading in their assets to the extent we wanted them to, but we did know that they needed to have a service relationship with us. We were able to generate about the same revenue. However, we did face some margin degradation because we did focus on discounting certain products and services for these customers to reestablish a relationship with them. We're really playing for the long term here in service, where we do know once they have a great experience, they paid a fair price, that they will come back for more service work. But we also know that there is a high likelihood that they will trade in their asset with us so that we get the next RV sale. There's a heavy corollary between those customers that have had at least six service visits with us and those that trade in. However, if they've had three or less service visits with us, we oftentimes just never see them again. So really, this is a quarter where we had a goal seek of bringing more customers in through service so that we can, once this trade-in cycle takes hold, have the opportunity to sell them their next RV.

Got it. That's all I have. Thank you.

Our next question comes from Andrew DeDora at Bank of America.

Hey, good morning, everyone. Actually, question, Matt, in the finance and insurance business. Over time, revenue growth obviously typically outperforms that of kind of combined new used vehicle sales. I know this quarter you had the actuarial adjustment there that kind of masked kind of what we historically see. I guess on this line, one, are there any risks in this environment that there could be another adjustment in this business? And then second, just How do you think about the core growth of F&I relative to new used vehicle sales?

I think when you take a step back and look at F&I for the full year as a percentage of new and used sales, it's still up. And I think that speaks to a lot of credit to the Good Sam team in the products that they developed and to our finance team in how they're presenting the menu and presenting those products to our customers. Yes, we do take a look at the reserves that we have and what the cancellation trends are on these products. In this environment, we did just see a little bit of an uptick in customers wanting to take a little bit of a refund. And that's not exclusive to us. That's observed in other categories throughout either recreation or auto and a lot of dealer businesses. So it's not something that we're necessarily immune to, but we feel like the adjustment that we took was a prudent one for the quarter. And we believe that the full year results that we've shown are positive and really show the momentum of that business.

Got it understood. And then, Matt, in your prepared remarks, you spoke a little bit about the market share losses, kind of July, August, as you kind of didn't react to what your peers were doing. But I guess in the absence of much more promo out of your competitive set and with the 100 plus or so bips of gross margin expansion next year in mind, how do you think your market share performs in that type of environment? Thanks.

I think we'll be able to seize back our market share, where historically there are periods that we'll go through in a year where maybe it'll be two, three months where we'll give up a little bit of share compared to the trajectory that we're on. But if you look at our North American market share on a trailing 12-month basis, we're still at 21%. We peaked in the middle of this year at like 21.4%. If you still look at the U.S., we're still looking at about a 24.5% U.S.-based market share. And on the U side of the business, we're still sitting at about, on a TTM base, about like 8.4% used market share, where we peaked at like 8.6%. So we think it's very attainable based upon a more creative inventory strategy. And once we start to source more used assets more aggressively, to be able to recapture that and still be able to maintain that market, that general margin improvement.

Got it. Thanks, everyone.

Thank you.

Our next question comes from Tristan Thomas Martin at BMO Capital Markets.

Thanks. One more for me. How much of your richer mix was tied to your contract manufactured products, and then how should we think about that penetration next year? Thanks.

How much was our inventory as a richer mix? Is that the question? Inventory or system?

Right. Yeah. So, like, think about the Coleman Reserve Fifth Wheel and, like, the Forest River Campsite Reserve, I'm sorry, and then some of the Thor Motor Coach, Motorize. How much of that shift and you guys kind of shifting your contract manufacturing price points higher drove the ASP mix? And then how do we think about your contract manufacturing penetration next year? Like, is it going to go up, down, flat?

So our exclusive brands did account for a slightly higher percent of our total new sales, where we peaked at about 47%, 48% over the course of Q3. I would not anticipate that percent of a total going up too materially. Our ASP mix actually improved more considerably just by means of just selling more motorized, where we've picked up commanding market share within the Class C segment. And yes, some of that was driven by our exclusive brands that we've developed with Thor Motor Coach, but also a variety of other OEM brands. And even within the fifth wheel space, yes, we were very effective with the Campsite Reserve fifth wheel. Our Campsite Reserve is now the number eight best-selling brand in North America. But we were very effective at some of these OEM products like Keystones, Cougar Montana, never mind Jayco's complete lineup of fifth wheels. So we've shown to actually have a healthy balance in those higher ASP segments, and we think that there's more room to grow, especially when we think of fifth wheels over $100,000. That is a segment that's been relatively resilient, and we've picked up market share this year, but we believe that there's a lot more to give next year.

Okay, thank you.

Our next question comes from Jim Chartier at Moniz, Crespi, and Hart.

Good morning. Thanks for taking my question. Good morning. I just wanted to follow up on the gross margin for product, service, and other. You know, was this a one-quarter initiative, and how should we think about that gross margin going forward?

I would view that, Jim, as a one-quarter initiative, and we expect it to normalize a little bit. We may be a little bit lower than we were the past couple of quarters because we did make some modifications in our rate structure for some of our posted labor rates for consumers that we intend to keep, but I would expect it to normalize a bit from here.

Okay. And then the press release mentioned $2.3 million of recurring profit sharing for Good Sam Club. Can you just talk about what that is and how we should think about that for the next few quarters?

Sure. We went through the process of renegotiating our contract with our credit card provider and working through how we could collectively grow that program. It's a little bit of a unique program. It's really unique to recreational spaces and to camping in general. So we're really excited to partner and grow over a long term with that partner. And in going through that exercise, we ultimately negotiated a profit share component of that. So historically, that was really just a royalty and bounty type of a program. where we'd earn a percentage on spend or something for card activations, but going forward we'll actually get some of the upside in the profit share associated with that portfolio. We disclosed that about $2-ish million in the press release. I would expect that, and that was for the quarter, I would kind of expect that on a quarterly basis from here, but more to come as we grow into that new program.

Okay, so on an annual basis, that's like an $8 million uptick from where you had been trending. And then for this quarter, you also had a non-recurring $5 million payment, which we should back out going forward.

That's the right way to think about it.

Okay, thank you.

I'm showing no further questions at this time. I would now like to turn it back to Matt for closing remarks.

Thank you, everyone, for your time this morning. As you can tell, we were quite focused on what we need to continue to accomplish between now and the end of the year, and we look forward to speaking with all of you in the next few months. Take care.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.