When you don’t have sufficient working capital to do that, and your margins are compressed and the business is slow, it leads you to a situation where you may need to be acquired. That is really how we see the acquisition path over the next 4, 5 months. And we have also made the decision to lower some of our used inventory levels knowing that there may be an opportunity to pick up some of that inventory from dealers who unfortunately and not to our happiness may not make the cut and may end up putting product back in the marketplace, which we will have the cash, the available floor life and the opportunity to absorb but at the right value.
Sean Wagner: Okay. Thank you for that color. And just, I guess, another quick one. You’ve talked about sort of your full year calendar year wholesale and retail expectations for the industry. I guess, what sort of cadence are you expecting for the year? Is there a point where you expect each to inflect positively? And is that demand driven – demand improving gradually? Or is that just maybe comps get easier at one point in time?
Matthew Wagner: Yes, Sean, that’s a tough question. I mean, because you’re talking about two separate subsets of information and the cube of wholesale is, of course, going to have some sort of impact based upon retail activity. But ultimately, I think the manufacturers are going to have to weigh in on that based upon their production schedules heading into next year where it seems to me that many of them are building pretty healthy backlogs based upon what we’re receiving from them as of this moment. What they’re planning out beyond that, really time will only tell. From a retail perspective, I can see new perhaps for the industry, starting to continue to slow down through the end of Q1, probably even bleeding a little bit into Q2 before it starts to take off again in the back half of next year.
Marcus Lemonis: But the gaps are still better. They’re still on a year-over-year basis, they’re still better. It’s slowing down in the sense that it’s a seasonal piece. But when we look at the gaps, right, the same-store performance on new, for example, in the month of September or the month of October.
Matthew Wagner: In September, we were nearly – well, we showed the best improvement we have in September as we have in 16 months actually. So it’s the best same-store new comp that we’ve seen in 16 months. Where I feel good about our trend line, I can’t necessarily speak to the broader industry.
Marcus Lemonis: We know that’s largely being driven by our identification of where the pricing needs to be to generate that activity. That’s what – that’s ultimately what’s given us the confidence as we went into Q3, almost looking at it in the petri dish and said, if we stratify pricing and move certain segments down, can we actually generate more leads and generate more conversion. That’s what’s given us the confidence as a management team to be as aggressive as we were in the back half of Q3 and in the full quarter of Q4 and in the early part of Q1 to bring in that 24 inventory that’s lower, knowing that we’re going to beat everybody else to the punch. That’s the key for us.
Sean Wagner: Okay. Thanks a lot, guys.
Operator: The next question we have is from Bret Jordan of Jefferies. Please go ahead.
Patrick Buckley: This is Patrick Buckley on for Brett. Thanks for taking our questions. On the F&I side, how are you guys thinking about new normal GPUs heading into ’24? Is that just structurally higher compared to pre-COVID or should we expect lower ASPs and a tougher consumer backdrop to start to weigh [ph] more on things there?
Matthew Wagner: We typically don’t look at F&I as a company on a GPU basis. We really try to look at it as a percentage of our new and used revenue. And so over time, I think you’ve seen that kind of historical average hovering around the 12% mark.
Marcus Lemonis: 11% to 12%…
Matthew Wagner: 11% to 12%. And I think that’s a good target that we always try to hit looking forward.
Marcus Lemonis: Yes. I mean one of the things that’s for sure, putting a little pressure on that is the current rate environment. And it isn’t – we have not had a hard time creating the interest and the demand for the product. But if you listen to our thousands of salespeople and sales managers, the folks that actually are on the front lines, they’ll say to you, it’s a lot harder to convert somebody from. I’m super excited to RV to please sign this piece of paper. And interest rates have definitely caused people to maybe take a little bit more time to make that decision. What hasn’t really been affected terribly by that is our ability for our finance team in the field through our Good Sam business centers to actually convert and to sell other products and services.
Our penetration of our Good Sam warranty, roadside hasn’t really been affected much. We’ve made a little less on the finance reserve portion of our business because obviously, the rates are a little bit higher. But even as early as yesterday, we started to see some banks even lower their rates for consumers. And I’m sure they’re looking ahead at the yield curve, and they’re trying to be ahead of what’s actually happening in the market. We had some banks issue us a quarter to a 0.5 [ph] point rate reduction yesterday. I do want to address one other thing on this topic. We have not seen any modification at this point in the availability of credit. We have not seen that at all. We have seen consumers pause a little bit more when they look at the rate, particularly on a more expensive asset.
As we’ve lowered the prices and as we brought in new lower ASPs, that has relieved itself a little, but we’re not naive to the challenge that’s out there of a consumer looking at a much higher rate than they did 3 years ago. Maybe they’re accepting it a little bit more, but we’re not taking it lightly and having to work a little harder to be in that 11% to 12% range. From my perspective, I would expect that over the next 6 to 8 months, we’ll probably be closer to 11% to 11.5% than we will 12%. We’ve made a lot of that up with some of the SG&A reductions, and we expect that to return to some level of normalcy as the rates come back down, hopefully at the middle of next year, but we’re planning on it being a little longer than that.
