In times of social distancing, recreational vehicles hold key to vacations

The sale of RVs has gained strength over the past few weeks, giving hope to auto manufacturers at a time of global slowdown due to coronavirus crisis.
By : Bloomberg
| Updated on: 09 May 2020, 06:02 PM
A man sits on a bench in front of recreational vehicles (RVs) during a camping trip at a RV park on the outskirts of Beijing. (File photo) (REUTERS)
A man sits on a bench in front of recreational vehicles (RVs) during a camping trip at a RV park on the outskirts of Beijing. (File photo) (REUTERS)
A man sits on a bench in front of recreational vehicles (RVs) during a camping trip at a RV park on the outskirts of Beijing. (File photo) (REUTERS)
A man sits on a bench in front of recreational vehicles (RVs) during a camping trip at a RV park on the outskirts of Beijing. (File photo)

Camping World Holdings Inc. jumped as much as 35% on Friday after reporting first-quarter results that beat analysts’ projections, driven by stronger-than-expected sales of recreational vehicles.

Analysts universally applauded the results and were surprised by the recent strength in RV sales, which they attributed to consumers’ desire to vacation while maintaining social distance. Camping World management noted that new customers appeared to be entering the market as well with trade-in rates dropping to 20% from the normal 30%-35%.

(Photo feature: From weddings to Starbucks and more, how cars are the new social hub)

Camping World benefited from a pivot to online sales, JPMorgan analyst Ryan Brinkman wrote in a note, saying the strategy was “unprecedented" and led to sales beginning to track positively year-over-year, capped by the strongest weekend ever in early May.

Trending Cars

Find More Cars

Baird analyst Craig Kennison, who more than doubled his price target to $14 from $6 while maintaining his neutral rating, said that outdoor activities can capture mind share as consumers shun crowded spaces.

KeyBanc analyst Brett Andres wrote that management’s tone was ‘very encouraging’ around both the retail stabilization displayed in the past few weeks, along with initial evidence it is seeing an emerging “staycation" benefit to retail sales.

Recreational vehicles and other outdoor leisure-related stocks gained in sympathy, including Winnebago Industries Inc, Thor Industries Inc., LCI Industries, and Patrick Industries Inc., as well as Polaris Inc., Johnson Outdoors Inc. and Brunswick Corp.

First Published Date: 09 May 2020, 12:21 PM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city