The following is a report from Seeking Alpha.
While the leisure vehicle sector waits for the Federal Reserve to lower interest rates and jump-start demand for interest-rate sensitive merchandise, RV dealers are taking matters into their own hands and clearing out bloated inventory with deep discounts.
Faced with dealerships drowning in inventory and consumers reigning in spending on highly discretionary items, Lazydays Holdings is offering huge discounts of 2024 models, some being sold at nearly half the original sticker price.
After reaching an all-time high of 513,000 units in 2021 when COVID restrictions smothered the travel industry and fueled demand for RVs, shipments have subsequently declined by 37% as of June 2024. This was attributed to higher interest rates, which have an inverse relationship on the demand for RVs, 80% of which are financed.
According to ZeroHedge, the markdowns are blamed on an “apocalyptic” downturn in the RV market as the 2021 boom “turned into a bust as the affordability of these homes on wheels collapsed” in tandem with Fed rate hikes.
At the same time, Lazydays profits fell 42% on a corresponding 19% drop in revenue.
Lazydays expects a rebound in the RV market in 2025, but until that time, the company will “continue to focus on the things we can control, maintaining a healthy vehicle inventory,” CEO John North said on the most recent earnings call.
To that end, Lazydays is offering discounts of more than 40% on new gas-powered RVs from the manufacturer suggested retail price, and 30%-plus discounts on diesel-powered RVs.
Shares of Lazydays are up 3%.
Read the full report from Seeking Alpha here.
