Why Shares of Camping World Traded Higher Today

What happened

Shares of Camping World Holdings (NYSE: CWH) traded up more than 8% on Friday after the RV retailer reported third-quarter results. The quarter was choppy, and Camping World shares traded as high as 14% up and as low as 11% down on the day as investors tried to sort through the mess, but overall the market was pleased with the company’s plans to restructure its operations.

So what

After markets closed on Thursday, Camping World reported adjusted earnings of $0.14 per share in the quarter, well short of the $0.36 per-share consensus, despite revenue of $1.39 billion that was up 6% year over year and ahead of expectations. The company has been battling decreased demand for RVs and shareholder litigation over its initial public offering, with Camping World shares down more than 60% for the year heading into Thursday’s earnings report.

Image source: Getty Images.

The results were uninspiring, but Camping World detailed its plan to get out from under the malaise. The company in September announced plans to abandon its three dozen stores that do not sell or service RVs, its so-called outdoor lifestyle locations, to focus on its core markets. As part of its results. Camping World  said it expects the restructuring to cost $27.7 million in total, including termination costs and inventory charges.

The volatile post-earnings stock movement suggests that some investors had been expecting much worse results from Camping World, and that the price move was at least somewhat influenced by short covering.

Now what

Camping World remains a mess, but the company if nothing else has a concrete plan to deal with that mess by focusing on its core business and investing in profitable business lines. There is still a lot of risk for investors. Camping World needs demand for RVs to rebound, which is out of the company’s control and could be further delayed if the U.S. falls into a recession.

But if the RV market really is on the rebound, Camping World might be able to sustain this bounce off the bottom.

10 stocks we like better than Camping World Holdings
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Camping World Holdings wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of June 1, 2019

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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.