July 17, 2023
Camping and outdoor experiences continue to be hot this summer. The wave that began in the pre-pandemic years with visitorship steadily increasing at National Parks has continued to grow.
Getting outdoors has always been popular, but grew enormously during the pandemic as many headed outside to escape lockdowns and connect with nature. A new, younger generation of outdoor enthusiasts is developing, with 38% of the buying market belonging to Millennials.
According to a study done by GORVing, RV ownership has grown by roughly 62% in the last 20 years, with a record 11.2 million households in the US currently owning an RV. The division of ownership is evenly split, between those over 55 and those under. During the pandemic, RV sales and outdoor experiences blossomed from the collective need to get out of the house. The study also found that RV ownership has experienced a large growth in racial diversity, with Black ownership up 13% in the last year and, Latino, and Asian ownership up 6%.
Individual shareholders interested in camping stock need not look far, with major retailers like Walmart (Tii:WMT) and Amazon (Tii:AMZN), locking up a substantial part of the camping equipment sales. A solid customer base allows these mega entities to dominate sales, but for the retail shareholder interested in honing the focus to more specialized outdoor companies, there are many good options. Companies like Camping World (Tii:CWH), in business since 1966, straddles both sides of the market offering both recreational vehicles and camping equipment.
Retailers like Dick’s Sporting Goods (Tii:DKS) offer an expansive selection of outdoor apparel and equipment for a range of outdoor activities. The company invested early on its digital operations and it has worked well for the company. Its large store base doubles as fulfillment centers with many offering same-day in store order pickup.
Many consumers are looking for fashionable, on-trend outdoor accessories to enhance their experience, and Deckers Outdoor (Tii:DECK) can supply a range of choices from sandal brands like Sanuk and Teva and the notably glamorous, UGG and trail running brand, Hoka. Deckers has benefited from influencers and the gorpcore aesthetic that continues to be chic.
YETI (Tii:YETI) has built an impressive brand after its successful IPO in late 2018. Consumers lean into YETI, identifying with the quality and ruggedness. Part of YETI's strength comes from their business model. Because more than half of the company’s revenue results from direct sales through its website, these direct-to-consumer channels give the company an impressive operating profit margin.
Apparel sales suffered through the pandemic, when new clothes purchases seemed unnecessary and irrelevant. Columbia Sportswear (Tii:COLM) was not immune to this hit. Columbia has regained its footing and is approaching its 2019 record sales high. Focusing its marketing to those that want comfortable clothing tailored for adventure, they have been highly successful. Subsidiary brands Mountain Hardwear, SOREL, and prAna meet the demand for campers and vacationers hitting the road, the hiking path, yoga mat, or the water.
Individual investors looking to invest in a recreation equipment company, Johnson Outdoors (Tii:JOUT) is a good place to start. For outdoor enthusiasts, having the right gear can make or break an experience, and many of these buyers are looking to reviews and influencer recommendations to guide their purchases. Johnson Outdoors specializes in four areas: fishing, diving, camping, and watercraft. Brands such as Eureka!, Jetboil, Scubapro, Humminbird, and Ocean Kayak are under the Johnson umbrella.
West Coast based sporting goods entity, Big 5 (Tii:BGFV), is a smaller company, and initially struggled to gain traction in an e-commerce dominated market in the years pre pandemic. The company hit its stride during the outdoor experience/camping surge in recent years. Individual investors looking to support the underdog, or look to smaller companies might want to check out Big 5.
A potentially lucrative niche for individual investors, investing in camping and outdoor living stocks is an opportunity that continues to grow and is projected to expand by billions of new dollars in the coming years.
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