Rush Enterprises, Inc. (NASDAQ:RUSHA) Q3 2023 Earnings Call Transcript

We have a goal to get to the last one. Could be asked me a year ago we were 500 and something were 650. Now, we’ve got a goal to get to a 1,000, okay. And those kind of demand — the demand for that type of thing is out there. Plus — it’s just providing an array of services on a consistent basis on a larger map. That doesn’t mean our competition is great. I’m sure we’re all listening right now. But at the same time, they’ll listen to the replay and that’s good. But we try to differentiate by having a larger map and being able to tie it all together, regardless of brand. There’s still a lot of non-proprietary. It’s not all vertical, right? It’s not all proprietary. So, and we’re able to take care of folks. So that’s really the best definition I can give you.

We got a lot of runway left in there. Whether the market goes up or the market goes down, we think we can grow it consistently on a year-over-year quarterly basis. We don’t look for that to change either, okay, as we go forward.

Justin Long: Got it. That’s helpful and you mentioned earlier the ACT numbers for next year have continued to trend lower and now they’re expecting a 22% decline in Class A truck sales. If that plays out, if reality is pretty close to that, how should we think about your ability to grow parts and service? Do you feel like you can still grow it? And if so, any thoughts on the order of magnitude?

Rusty Rush: Sure. You know, I think — our year-over-year comps will start to get a little better because when we get into Q2 and Q3, because it’s flattened out some this year, right? Remember, when I was speaking earlier, that shift in the small guy who’s got more margin in him towards that national account? Yeah. That made it a little tougher. You can see it — you can see it in the numbers and parts of service profit. We expected that we do expect it to be a little better next quarter. We think Q3 was like a trough, we hope. But I would tell you it would have some effect. There’s no question, but we think we can overcome that or at least maintain. We’re not going to have like, first quarter of this year we had 17% growth rate.

We’re not going to do that next year. We were 3.5 in Q3 and we’re probably going to bobble around that in Q4. And I would expect that probably to continue in Q1 with the same dynamics that we’re dealing right now. Q3 will probably have the same type of dynamics. I do not see, I’m hoping I do not have my brain, I’m not — I can’t guarantee the future because it’s a pretty volatile at times out there, but I don’t see as any big huge market decline based on what I’m watching right now. We think we can overcome what obstacles are out there with a less truck sales, get a little less internal work got it. But we really believe in our growth strategy around our service arena and around our dedication to the larger – larger customers. Will it have an effect?

Yes, we think we could keep where we’ve got it by picking up in other areas that are available to us I think. So I mean is it somewhat of a headwind? Of course it is. I can’t say [indiscernible] not, it’s great, we’re going to sell less trucks, because we do a lot of internal work to – on trucks getting it ready. But we believe that probably I think in Q3 was indicative outside of truck sales, but I’m thinking that parts and service side we’ll keep pounding it out even if we’re having a shift in a little – some up, some down puts and takes. But giving – remember, our diversification is not just the over-the-road I talk about. Remember, we’re so embedded in so many other market segments that we’re committed to and that’s – if we were just – I’d be getting crushed like a lot of my customers are if I was just in the over-the-road business.

And we were just tied to that. We’d look just like this when it comes to comps year-over-year from 2022 to 2023 but we’re not and our numbers speak for themselves. We are diversified into so many other market segments.