Champion Homes, Inc. (NYSE: SKY) Q4 2025 Earnings Call | 05/27/2025

7 days ago

41:05

Inside Ticker

Earnings Calls

AI Summary

summary of the Champion Homes Q4 and Full Year 2025 Earnings Call:

Overall Performance:

Champion Homes reported strong fiscal year 2025 results, delivering over 26,000 homes, a 19% increase year-over-year.
Revenue grew by 23% to $2.5 billion.
Q4 2025 net sales increased 11% to $594 million, with a 6% increase in homes sold (6,171 units).
Backlog at the end of the year was $343 million, up 9% from the previous year and 10% sequentially.
The average backlog lead time was eight weeks.

Sales Channels:

Sales increased in both independent retail and captive retail channels.
The company announced an agreement to acquire Eisman Homes to expand its retail presence in the Plains region.
The community channel saw increased sales, representing 28% of overall units.
The builder-developer pipeline remains strong, though projects are paced by market uncertainty.

Financial Highlights (Q4 2025):

Gross profit increased 55% to $152 million.
Gross margin expanded to 25.6%, up from 18.3% in the prior year, primarily due to a product liability reserve in the prior year and higher average selling prices. However, gross margin declined sequentially due to higher material input costs and lower capacity utilization.
SG&A increased to $110 million, driven by higher sales volumes through company-owned retail stores, increased marketing spend, and investments in technology.
Net income attributable to Champion Homes increased to $36 million, or $0.63 per diluted share.
Adjusted EBITDA was $53 million, with a margin of 8.9%.
Cash and cash equivalents totaled $610 million, with long-term borrowings of $25 million.
$20 million was returned to shareholders through share repurchases.

Outlook:

Q1 2026 revenue is expected to be up low single digits compared to the same period last year.
Demand has been less predictable in early fiscal 2026, with a shift towards smaller floor plans and fewer features.
The company is actively managing the dynamic tariff environment and is taking steps to control fixed costs.
Near-term gross margin is expected in the 25-26% range.
Long-term, the company remains focused on strategic growth priorities and believes the need for affordable housing will drive future demand.

Strategic Priorities:

Winning as a customer-centric, high-performance, agile team.
Innovating and differentiating with products and services.
Expanding and elevating go-to-market channels.
Increasing brand awareness, demand, and advocacy.
Leveraging costs, capacity, and investments in people and technology.

Acquisition:

A definitive agreement was signed to acquire Eisman Homes, which operates 10 retail sales centers in the Plains region, with annualized revenues of approximately $40 million. The transaction is expected to close by the end of Q1 2026.

About this video

Champion Homes, Inc. (NYSE: SKY) reported its Q4 2025 results on May 27, 2025, delivering a strong finish to the fiscal year with net sales rising 10.7% year-over-year to $593.9 million, driven by a 5.1% increase in U.S. homes sold and a 5.0% rise in average selling price to $94,300. Canadian factory-built home sales also grew, reaching 230 units, up from 189 in the prior year. Gross profit for the quarter surged 55% to $152.5 million, with gross margin expanding sharply to 25.7%—a 740 basis point increase—primarily due to the absence of a $34.5 million product liability reserve recorded in the prior year. Net income jumped by $33.6 million to $36.3 million, and diluted EPS rose to $0.63 from $0.05 a year earlier. Adjusted EBITDA for the quarter was $52.6 million, with an adjusted EBITDA margin of 8.9%, reflecting higher SG&A investments in new products, marketing, and technology to support future growth. The company ended the quarter with $610.3 million in cash and cash equivalents and repurchased $20 million of its own shares as part of its buyback program, with the board authorizing up to $100 million in future repurchases. For the full fiscal year 2025, Champion Homes posted net sales of $2.5 billion, up 22.7% from the prior year, and a gross profit margin of 26.7%, up 270 basis points. Net income for the year increased by $51.7 million to $198.4 million, and diluted EPS climbed 35.2% to $3.42. Adjusted EBITDA rose 16.2% to $285.1 million, though the adjusted EBITDA margin contracted slightly to 11.5%. Net cash from operating activities increased to $240.9 million. Management highlighted robust demand, successful execution of strategic initiatives, and investments in new products and retail capabilities, including the acquisition of Iseman Homes, as key drivers of growth. Despite missing analyst EPS and revenue forecasts for Q4, and a subsequent 14% drop in the stock price, Champion Homes remains financially strong, with more cash than debt and a healthy current ratio, positioning it well to navigate market volatility and pursue further growth. Outlook: Management expects near-term gross margins in the 25–26% range, balancing inflation, shifting consumer preferences, and ongoing investments. Continued focus on strategic growth, operational efficiency, and expanding retail and product offerings. Share repurchase program expanded, with $100 million authorized for future buybacks. About Inside Ticker: For more expert analysis and real-time updates on Champion Homes, Inc. (NYSE: SKY) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #ChampionHomes #SKY #EarningsCall #Q42025 #ModularHomes #RevenueGrowth #FinancialResults #StockMarket #InsideTicker

Important Note: The stock market is inherently unpredictable, and forecasts are subject to change based on various factors, including economic conditions and company performance. Always consult multiple sources and consider professional advice before making investment decisions.

AI-Powered Financial Analysis This analysis uses real-time market data. While we strive for accuracy, always verify important financial information and consult with qualified financial professionals before making investment decisions. Past performance does not guarantee future results.