RumbleOn's Q4 2024: Contradictions in Inventory Strategies, Consumer Confidence, and Interest Rates

These are the key contradictions discussed in RumbleOn's latest 2024Q4 earnings call, specifically including: Inventory Levels and Strategies, Consumer Confidence Impact, Impact of Interest Rates, and Inventory Management:



Inventory Reduction and Market Alignment:
- RumbleOn successfully reduced new inventories by over $80 million from 2023 to 2024.
- This reduction was aimed at aligning inventory levels with the market environment, ensuring appropriate levels heading into 2025.

Operational Efficiency and Cost Management:
- The company reduced adjusted SG&A expenses by 22.9%, achieving $62.3 million or 92.3% of gross profit in Q4 2024.
- Improvements in cost structure and system standardization are key reasons behind the efficiency gains.

Wholesale Express Segment Performance:
- Revenue for Wholesale Express increased by 3.1% year-over-year in Q4 2024, but gross profit decreased by 2.9%.
- The increase in revenue was due to higher vehicle transportation volumes, while a change in leadership and broker team turnover impacted gross profit.

Tariff Concerns and Market Impact:
- RumbleOn's top three OEMs (Polaris, BRP, and Harley-Davidson) contribute about 60% to 65% of their sales.
- Tariffs could negatively impact product affordability, potentially hampering customer demand, although the exact impact remains uncertain.

Leadership and Strategic Focus:
- Mike Quartieri, the new CEO, emphasized a focus on profitability and shareholder value, replacing the Vision 2026 plan with operational excellence.
- This shift in strategy aims to create a high-performance culture and improve overall company performance.