Champion Homes, Inc. (SKY) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance, with increased revenue, EBITDA, and operating cash flows. The acquisition of Eisman Homes and community channel growth signal strategic expansion. Despite some market uncertainties and cautious consumer sentiment, the company maintains a robust backlog and has a balanced capital allocation strategy. The Q&A highlighted strong community business and improved pricing, although some growth moderation is expected. Overall, the positive earnings, strategic acquisitions, and share repurchase plan suggest a positive stock price reaction over the next two weeks.
Key Financial Performance
Net Sales Net sales increased 12% year-over-year to $701 million. The increase was driven by higher sales across channels and effective cost management.
Homes Sold The number of homes sold increased 8% year-over-year to 7,215 homes. This was supported by healthy demand across various channels.
Manufacturing Backlog Manufacturing backlog at the end of June totaled $302 million, down 12% sequentially. This reflects adjustments to production rates based on local market trends.
U.S. Factory-Built Housing Revenue Revenue increased 10% year-over-year. This was supported by healthy demand in the community channel and an increase in builder developer sales.
Average Selling Price (U.S.) The average selling price per U.S. home sold increased 4% year-over-year to $95,000. This was due to a shift in mix to more multi-section units and increased pricing at company-owned retail sales centers.
Canadian Revenue Revenue increased to $30 million, representing a 50% increase in the number of homes sold year-over-year. However, the average home selling price in Canada decreased 3% to $120,500 due to a shift in product mix.
Gross Profit Gross profit increased 16% year-over-year to $190 million. Gross margin expanded by 90 basis points to 27.1%, driven by higher ASPs on new homes and lower material input costs.
SG&A Expenses SG&A expenses increased by $2 million year-over-year to $111 million. The increase was due to higher variable compensation and costs associated with plant closures and acquisitions.
Net Income Net income increased by $19 million year-over-year to $65 million, or $1.13 per diluted share. The increase was driven by improved operating income.
Adjusted EBITDA Adjusted EBITDA increased 26% year-over-year to $94 million. The adjusted EBITDA margin improved to 13.4%, up from 11.9% in the prior year, mainly due to higher gross margins.
Operating Cash Flows Operating cash flows for the quarter were $75 million. This reflects strong cash generation and effective operational management.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New Product Strategy: Investments in new home styles and floor plans at competitive price points. National recognition for newly launched HUD Code and modular homes. Featured on Designing Spaces on Lifetime Television to highlight quality, speed, and affordability.
Market Expansion: Sales to independent retail channels increased, with expanded digital and marketing support for dealers and additional distribution points. Canadian revenue increased by 50%, driven by demand in Alberta and a shift to single-section homes.
Operational Execution: First quarter net sales increased 12% to $701 million, with homes sold rising 8% to 7,215 units. Manufacturing backlog at $302 million, down 12% sequentially, with lead times within the target range of 4-12 weeks. Gross margin expanded to 27.1% due to effective cost management and favorable product mix.
Financial Performance: Net income rose to $65 million, up from $46 million in the prior year. Adjusted EBITDA increased 26% to $94 million, with a margin of 13.4%. Operating cash flows of $75 million and $50 million returned to shareholders through share repurchases.
Strategic Shifts: Addition of two executives: Mary Fedewa to the Board of Directors and Alan Robertson as Chief Human Resources Officer. Focus on attracting first-time homebuyers and addressing affordable housing needs in the U.S. and Canada. Continued advocacy for the ROAD to Housing Act to support off-site built homes.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Consumer Uncertainty and Housing Market Factors: The company anticipates flat to low single-digit revenue growth in Q2 2026 due to slower order pace compared to the prior year, reflecting cautious consumer sentiment and softer demand in certain markets.
Manufacturing Backlog Decline: The manufacturing backlog decreased by 12% sequentially, with lead times now at 7 weeks, which could indicate potential challenges in maintaining consistent production levels.
Community Channel Moderation: The company expects some moderation in the community channel, which may impact near-term order rates and sales performance.
Tariff Dynamics: The purchasing team is navigating ever-changing tariff dynamics, which could impact material costs and supply chain stability.
Plant Closures and Acquisition Costs: The company incurred $3.9 million in costs associated with plant closures and the acquisition of Iseman Homes, which could strain operational budgets.
Consumer Financing Environment: The company is leveraging joint ventures and diversified financing options to address challenges in the consumer financing environment, which remains critical for maintaining sales.
Economic and Legislative Uncertainty: While the ROAD to Housing Act shows promise, it is still early in the legislative process, and its outcome could impact the regulatory environment for off-site built homes.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Expectations: The company anticipates second quarter revenue for fiscal 2026 to be flat to up low single digits compared to the prior year period.
Gross Margin Projections: Near-term gross margin is expected to be in the 25% to 26% range, balancing cautious consumer sentiment and softer demand in certain markets.
Market Trends and Consumer Behavior: The company is navigating consumer uncertainty and factors impacting the overall housing market. Backlogs remain within a normal range of 4 to 12 weeks, and the company is taking measured actions to manage fixed costs.
Affordable Housing Demand: The company continues to attract first-time homebuyers and first-time buyers of manufactured homes, reinforcing the demand for affordable housing in the U.S. and Canada.
Strategic Growth and Investments: The company plans to reinvest in the business to support strategic growth and return cash to shareholders, leveraging its favorable liquidity position.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase Program: In the quarter, we leveraged our strong cash position and returned capital to our shareholders through $50 million in share repurchases. Additionally, our Board recently refreshed our $150 million share repurchase authority, reflecting confidence in our continued strong cash generation.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What has changed geographically and in terms of order rates since late May?
A:The company experienced stronger community business in Q1, with steady business from community customers despite some consumer dynamics. Plant backlogs in regions like the West contributed to production, while the South remained soft. Leading indicators and consumer dynamics are affecting the Q2 outlook. The company has grown share in HUD and single-family markets over the last 6 months.
Q:What happened in June that led to outperformance in revenue and gross margin compared to late May expectations?
A:The community business significantly impacted Q1 results. Improved pricing in captive retail and lower material costs contributed to strong earnings. However, these dynamics are not expected to continue into Q2.
Q:How many homes were delayed from the March quarter to the first quarter, and what was the revenue impact?
A:The company did not quantify the number of homes or the revenue impact but noted that the majority of delayed shipments hit in the first quarter, contributing to the difference between late May expectations and actual results.
Q:What is the outlook for the community channel and geographic dispersion?
A:The company saw robust community orders in Q1 but does not anticipate the same rate of growth in Q2. The moderation is due to community operators balancing projects and demand across multiple geographies. The community business remains strong compared to a few years ago, but growth rates are expected to moderate.
Q:What is the expectation for backlogs in Q2?
A:The company anticipates being in its normal backlog range for Q2, with plant-by-plant adjustments based on market conditions.
Q:What drove the turnaround in Canada, and how sustainable is it?
A:The Alberta region showed strength, contributing to 4% of total revenue. While the market is dynamic and faces consumer challenges, the company is balanced in its outlook for Canada.
Q:What did Iseman Homes contribute to revenue and backlog in Q1?
A:Iseman Homes contributed one month of revenue in Q1 after closing on May 30. It had no impact on manufacturing backlog numbers.
Q:What factors are driving the sequential decline in gross margin from Q1 to Q2?
A:The decline is due to cautious consumer sentiment, softer demand in certain markets, and fluctuations in product mix, including single-wide versus multi-section homes and captive retail versus independent channels. Gross margins are expected to remain in the 25%-26% range in the near term.
Q:What is the outlook for SG&A leverage for the year?
A:The company will balance SG&A based on demand, with no specific guidance provided.
Q:What are the pricing dynamics in captive retail and manufacturing?
A:Wholesale prices in manufacturing remained flat, while retail pricing increased in certain geographies. The company did not disclose the magnitude of the price increase but noted it had been a while since captive retail locations raised prices.
Q:What is the company doing to improve visibility and refine near-term guidance?
A:The company uses financial forecasting tools but faces challenges due to factors like weather, consumer financing, and end-of-month or quarter transaction closings. Efforts are ongoing to improve internal processes.
Q:What are the order trends and inventory levels across different channels?
A:The builder-developer channel has new projects, while the independent channel shows good quoting activity but weaker conversion compared to last year. Captive retail is working through inventory, and overall inventory levels are balanced.
Q:What is the impact of tariffs on material costs and pricing?
A:Tariffs are estimated to impact approximately 1% of material costs. The company plans to mitigate this through alternative sourcing and price adjustments where demand allows. The impact is already factored into the 25%-26% gross margin guidance.
Q:What is the demographic profile of new homebuyers?
A:The company is attracting first-time homebuyers and those transitioning from site-built homes to manufactured housing. Efforts to bring in new buyers include marketing and new product offerings.
Q:Review of Unclear Management Responses
A:Management avoided directly quantifying the number of delayed homes and their revenue impact, as well as the magnitude of like-for-like price increases in captive retail. Additionally, they did not provide specific details on SG&A leverage or the exact demographic profile of new homebuyers.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ASPs home
ASPs product
Act bill
Act result
Adrien Bouley
Alberta province
America Congress
Associates LLC
Bank PLC
Banking Committee
Barclays Bank
Blair Investor
Blair Yesterday
Bouley Barclays
CEO Director
CFO Timothy
CHRO
Champion Homes
Directors
Hough Executive
Housing
Iseman
LLC Research
President CEO
Research Division
Robertson
SGA
channel period
community channel
consumer environment
credit
estate
factory housing
increase margin
liquidity
member
period product
sale home
style
SKY Transcript
Champion Homes, Inc. (SKY) Q3 2026 Earnings Call Transcript
Unknown2-4
The earnings call summary reveals mixed signals: flat revenue and stable gross margins suggest no strong growth drivers, while cautious consumer sentiment and legislative uncertainties add risks. Positive aspects include balanced inventory management and alignment with affordable housing goals. Q&A insights reveal optimism but lack specificity, especially regarding legislation and spring sales indicators. Overall, the sentiment is neutral, as positive elements like strong demand and strategic alignment are offset by flat revenue expectations and unclear management responses.
Champion Homes, Inc. (SKY) Q2 2026 Earnings Call Transcript
Unknown11-5
The earnings call presents a mixed outlook. Financial performance is stable with slight increases in net income and EBITDA, but SG&A expenses rose. Market strategy shows promise with growth in builder channels, yet community markets softened. Expenses are managed but tariffs pose a risk. The Q&A reveals uncertainties in market performance and the impact of the ROAD to Housing Act. Despite positive guidance on ASP stability and gross margins, the cautious consumer sentiment and lack of detailed responses temper expectations, leading to a neutral prediction.
Champion Homes, Inc. (SKY) Q1 2026 Earnings Call Transcript
Positive8-6
The earnings call summary indicates strong financial performance, with increased revenue, EBITDA, and operating cash flows. The acquisition of Eisman Homes and community channel growth signal strategic expansion. Despite some market uncertainties and cautious consumer sentiment, the company maintains a robust backlog and has a balanced capital allocation strategy. The Q&A highlighted strong community business and improved pricing, although some growth moderation is expected. Overall, the positive earnings, strategic acquisitions, and share repurchase plan suggest a positive stock price reaction over the next two weeks.
Skyline Champion Corporation (NYSE:SKY) Q4 2025 Earnings Call Transcript
Positive5-28
Champion Homes' earnings call reflects a positive sentiment, with strong financial performance including a 23% revenue increase and a significant rise in net income and EPS. The company has a robust cash position and continues its share repurchase program, indicating confidence in cash generation. While there are some concerns about SG&A expenses and mixed market conditions, the overall outlook remains optimistic with a focus on product innovation and strategic initiatives. The positive guidance and strong financial metrics outweigh the minor uncertainties, suggesting a positive stock price movement.
SKY Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
