Beazer Homes USA, Inc. (BZH) Q3 2025 Earnings Call Transcript
Average Community Count Grew 15% to 167 communities year-over-year. This growth was achieved by successfully activating 19 new communities.
Book Value Per Share Increased to over $41, supported by $12.5 million in stock repurchases. This reflects a focus on shareholder returns.
Adjusted Homebuilding Gross Margin Achieved 18.4%, slightly up from Q2. This improvement was due to margins on newer homes overcoming higher incentives and an elevated spec mix.
Sales Pace in Texas Dropped to 1.3 sales per community per month, significantly below the historical range of 1.9 to 3.1. This was attributed to a buildup of new home inventories during the spring.
Land Sales Generated $45 million in revenue over the past 12 months, with $8 million in gross profit. This was part of a strategy to sell non-core land assets to improve returns.
Impairments Two communities were impaired during the quarter: one in Maricopa, Phoenix, due to price sensitivity, and another in Orlando, Florida, due to rising insurance and HOA costs.
Land Spending Spent $154 million on land acquisition and development in Q3, with a full-year expectation of $700-$750 million. This reflects a deliberate slowdown in land spending to allocate capital more efficiently.
Share Repurchases Repurchased $33 million worth of shares year-to-date at an average price of just over $22, with $87 million remaining on the authorization. This is part of a strategy to enhance shareholder value.
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Beazer Homes Reports Significant Q1 Earnings Miss
- Significant Earnings Miss: Beazer Homes reported a Q1 fiscal 2026 loss of $1.13 per share, significantly worse than the expected $0.50 loss, with sales at $363.5 million falling short of the $423.2 million forecast, indicating severe market demand challenges.
- Declining Sales Volume: The company experienced a 23% drop in home sales for the quarter, resulting in a 22% revenue decline; however, the revenue drop was less severe than unit sales, suggesting Beazer did not significantly lower prices but struggled to move inventory amid competitive pressures.
- Management's Response Strategy: CEO Allan Merrill emphasized that despite ongoing demand challenges and elevated market incentives, management aims to achieve sequential margin improvements through fiscal 2026 by holding prices steady and cutting costs.
- Cautious Future Outlook: Although new orders fell by 18% in Q1, the decline was less severe than the drop in home closings; management did not provide full-year earnings guidance, and Wall Street analysts forecast a 25% decrease in earnings to $1.43 per share, indicating potential further deterioration in the near term.
PennyMac Financial Shares Plunge After Earnings Miss
- Earnings Disappointment: PennyMac Financial Services reported quarterly earnings of $1.96 per share, significantly missing the analyst consensus estimate of $3.24, indicating a notable decline in profitability that could undermine investor confidence.
- Sales Miss: The company's quarterly sales totaled $538.005 million, falling short of the analyst consensus estimate of $642.528 million, reflecting weak market demand that may pressure future performance.
- Stock Price Volatility: Following the earnings report, PennyMac's shares plummeted 21.8% to $117.00 in pre-market trading, highlighting investor concerns over financial health that could trigger broader market reactions.
- Market Sentiment Impact: Despite a 0.1% gain in Dow futures, PennyMac's negative earnings report may influence other financial stocks, affecting investor risk appetite amid overall market instability.
Beazer Homes Q1 2026 Earnings Call Insights
- Sales Performance Review: Beazer Homes sold 763 homes in Q1 2026, achieving a pace of 1.5 sales per community per month, and while this was below expectations, management remains optimistic about future sales growth.
- Financial Overview: The company reported homebuilding revenue of $359.7 million in Q1, with an average selling price of $514,000; gross margin fell to 14% due to a $6.4 million litigation-related charge, but excluding this, gross margin would have been 15.8%.
- Share Repurchase Plan: Beazer executed $15 million in share buybacks in Q1, with $72 million remaining on its authorization, and management believes that selling land above book value to repurchase shares below book value will be highly accretive for shareholders.
- Future Outlook: Management expects to sell approximately 1,100 homes and close about 800 in Q2, with anticipated adjusted gross margins remaining flat; despite market uncertainties, they are committed to achieving full-year EBITDA growth.
Beazer Homes Q1 Earnings Miss Expectations
- Earnings Miss: Beazer Homes reported a Q1 non-GAAP EPS of -$0.90, missing expectations by $0.41, indicating significant challenges in profitability amid a tough market environment.
- Revenue Decline: The company generated $363.49 million in revenue for the first quarter, a 22.5% year-over-year decrease that fell short of the $423.23 million forecast, reflecting weak sales and diminished market demand.
- Backlog Value Drop: As of December 31, 2025, the dollar value of homes in backlog was $573.3 million, down 29.5% from $816.0 million a year earlier, highlighting pressure on orders and sales.
- New Orders Down: Net new orders fell to 763 in Q1, an 18.1% decline from 932 in the prior year, with a sales pace decrease to 1.5 orders per community per month, indicating intensified market competition and weakened consumer confidence.
Beazer Homes to Announce Q1 Earnings on January 29
- Earnings Announcement Schedule: Beazer Homes (BZH) is set to release its Q1 2023 earnings report on January 29 after market close, with consensus EPS estimate at -$0.49 and revenue estimate at $423.23 million, reflecting a 9.7% year-over-year decline.
- Historical Performance Review: Over the past year, BZH has exceeded EPS estimates 100% of the time, while only 25% of revenue estimates were surpassed, indicating stability in profitability but volatility in revenue.
- Expectation Revision Dynamics: In the last three months, there have been no upward revisions to EPS estimates, with two downward adjustments, and similarly, revenue estimates saw no upward revisions but three downward, suggesting market caution regarding the company's future performance.
- Market Opportunity Analysis: Despite facing revenue decline challenges, Beazer Homes aims to target over 200 communities by 2027, indicating the company's commitment to margin improvement efforts and long-term growth potential.
Coherent and Beazer Homes Featured as Zacks' Bull and Bear of the Day
Coherent's Growth and Innovations: Coherent Corp. is experiencing significant growth, with projected revenues doubling to $6.7 billion by June 2026, driven by demand for optical solutions in AI and data centers. The company has also expanded its partnership with Apple to supply technology for Face ID features in iPhones.
Beazer Homes' Struggles: Beazer Homes is facing challenges, reporting a decline in revenue and a 19% reduction in EPS estimates for FY'26. Despite a slight revenue surprise, the company is under pressure as key performance metrics show mixed results.
Visa's Cross-Border Business Performance: Visa Inc. is benefiting from a strong cross-border business, with significant growth in international travel and e-commerce. The company is focusing on enhancing its cross-border payment capabilities, including integrating stablecoin functionality.
Competitors' Performance: Mastercard and PayPal are also seeing growth in their cross-border businesses, with Mastercard reporting a 15% increase in volumes and PayPal achieving an 8% rise in total payment volume year-over-year.
Beazer Homes Reports Significant Q1 Earnings Miss
- Significant Earnings Miss: Beazer Homes reported a Q1 fiscal 2026 loss of $1.13 per share, significantly worse than the expected $0.50 loss, with sales at $363.5 million falling short of the $423.2 million forecast, indicating severe market demand challenges.
- Declining Sales Volume: The company experienced a 23% drop in home sales for the quarter, resulting in a 22% revenue decline; however, the revenue drop was less severe than unit sales, suggesting Beazer did not significantly lower prices but struggled to move inventory amid competitive pressures.
- Management's Response Strategy: CEO Allan Merrill emphasized that despite ongoing demand challenges and elevated market incentives, management aims to achieve sequential margin improvements through fiscal 2026 by holding prices steady and cutting costs.
- Cautious Future Outlook: Although new orders fell by 18% in Q1, the decline was less severe than the drop in home closings; management did not provide full-year earnings guidance, and Wall Street analysts forecast a 25% decrease in earnings to $1.43 per share, indicating potential further deterioration in the near term.
PennyMac Financial Shares Plunge After Earnings Miss
- Earnings Disappointment: PennyMac Financial Services reported quarterly earnings of $1.96 per share, significantly missing the analyst consensus estimate of $3.24, indicating a notable decline in profitability that could undermine investor confidence.
- Sales Miss: The company's quarterly sales totaled $538.005 million, falling short of the analyst consensus estimate of $642.528 million, reflecting weak market demand that may pressure future performance.
- Stock Price Volatility: Following the earnings report, PennyMac's shares plummeted 21.8% to $117.00 in pre-market trading, highlighting investor concerns over financial health that could trigger broader market reactions.
- Market Sentiment Impact: Despite a 0.1% gain in Dow futures, PennyMac's negative earnings report may influence other financial stocks, affecting investor risk appetite amid overall market instability.
Beazer Homes Q1 2026 Earnings Call Insights
- Sales Performance Review: Beazer Homes sold 763 homes in Q1 2026, achieving a pace of 1.5 sales per community per month, and while this was below expectations, management remains optimistic about future sales growth.
- Financial Overview: The company reported homebuilding revenue of $359.7 million in Q1, with an average selling price of $514,000; gross margin fell to 14% due to a $6.4 million litigation-related charge, but excluding this, gross margin would have been 15.8%.
- Share Repurchase Plan: Beazer executed $15 million in share buybacks in Q1, with $72 million remaining on its authorization, and management believes that selling land above book value to repurchase shares below book value will be highly accretive for shareholders.
- Future Outlook: Management expects to sell approximately 1,100 homes and close about 800 in Q2, with anticipated adjusted gross margins remaining flat; despite market uncertainties, they are committed to achieving full-year EBITDA growth.
Beazer Homes Q1 Earnings Miss Expectations
- Earnings Miss: Beazer Homes reported a Q1 non-GAAP EPS of -$0.90, missing expectations by $0.41, indicating significant challenges in profitability amid a tough market environment.
- Revenue Decline: The company generated $363.49 million in revenue for the first quarter, a 22.5% year-over-year decrease that fell short of the $423.23 million forecast, reflecting weak sales and diminished market demand.
- Backlog Value Drop: As of December 31, 2025, the dollar value of homes in backlog was $573.3 million, down 29.5% from $816.0 million a year earlier, highlighting pressure on orders and sales.
- New Orders Down: Net new orders fell to 763 in Q1, an 18.1% decline from 932 in the prior year, with a sales pace decrease to 1.5 orders per community per month, indicating intensified market competition and weakened consumer confidence.
Beazer Homes to Announce Q1 Earnings on January 29
- Earnings Announcement Schedule: Beazer Homes (BZH) is set to release its Q1 2023 earnings report on January 29 after market close, with consensus EPS estimate at -$0.49 and revenue estimate at $423.23 million, reflecting a 9.7% year-over-year decline.
- Historical Performance Review: Over the past year, BZH has exceeded EPS estimates 100% of the time, while only 25% of revenue estimates were surpassed, indicating stability in profitability but volatility in revenue.
- Expectation Revision Dynamics: In the last three months, there have been no upward revisions to EPS estimates, with two downward adjustments, and similarly, revenue estimates saw no upward revisions but three downward, suggesting market caution regarding the company's future performance.
- Market Opportunity Analysis: Despite facing revenue decline challenges, Beazer Homes aims to target over 200 communities by 2027, indicating the company's commitment to margin improvement efforts and long-term growth potential.
Coherent and Beazer Homes Featured as Zacks' Bull and Bear of the Day
Coherent's Growth and Innovations: Coherent Corp. is experiencing significant growth, with projected revenues doubling to $6.7 billion by June 2026, driven by demand for optical solutions in AI and data centers. The company has also expanded its partnership with Apple to supply technology for Face ID features in iPhones.
Beazer Homes' Struggles: Beazer Homes is facing challenges, reporting a decline in revenue and a 19% reduction in EPS estimates for FY'26. Despite a slight revenue surprise, the company is under pressure as key performance metrics show mixed results.
Visa's Cross-Border Business Performance: Visa Inc. is benefiting from a strong cross-border business, with significant growth in international travel and e-commerce. The company is focusing on enhancing its cross-border payment capabilities, including integrating stablecoin functionality.
Competitors' Performance: Mastercard and PayPal are also seeing growth in their cross-border businesses, with Mastercard reporting a 15% increase in volumes and PayPal achieving an 8% rise in total payment volume year-over-year.
