Q1 2025 Champion Homes Inc Earnings Call
Mina: Good morning and welcome to the Champion Homes first quarter fiscal 2026 earnings call. My name is Mina, and I will be coordinating your call today. I will now turn the call over to your host, Jason Blair, to begin. Jason, please go ahead.
Call today, I will now turn the call over to your host Jason Lair to begin station. Please go ahead.
Jason Blair: Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the first quarter ended June 28, 2025. Here to review our results are Tim Larson, Champion Homes President and Chief Executive Officer, and Laurie Hough, Executive Vice President, Chief Financial Officer and Treasurer. Yesterday, after the market closed, we issued our earnings release. As a reminder, the earnings release and statements made during today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These results are subject to risks and uncertainties that could cause extra results to differ materially from the company's expectations. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission.
Good morning. Thank you for taking the time to join us for today's conference call and review of our business results. For the first quarter ended June 28th 2025,
Here to review our results are Tim Larson Champion, Homes, president and chief executive officer and Lori, Hof Executive Vice President, Chief Financial Officer and treasurer.
Yesterday, after the market closed, we issued our earnings release. As a reminder, the earnings release and statements made during today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
these results are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations,
Jason Blair: Please note that today's remarks contain non-GAAP financial measures, which we believe can be useful in evaluating performance. Definitions and reconciliations of these measures can be found in the earnings release. I will now turn the call over to Champion Homes CEO, Tim Larson.
such risks and uncertainties include the factor set forth in the earnings release. And then the company's filings with the Securities and Exchange Commission. Please note that today's remarks contain non-gaap Financial measures which we believe can be useful in evaluating performance.
Tim Larson: Thank you, Jason, and good morning, everyone. Before we discuss our quarterly results, I want to share an update on the progress we are making on our strategic priorities. These priorities reflect how we are elevating the business for near and long-term performance. On our first strategy, winning as a customer-centric high-performance team, we have added two highly accomplished executives: one to our board of directors, Mary Fidoy, and Alan Robertson as Chief Human Resources Officer. Mary is an accomplished leader in the real estate industry with more than 30 years of experience in finance and capital markets. She co-founded Store Capital, one of the largest and fastest-growing real estate investment trusts in the U.S. Mary serves as its President and CEO and is a member of its board of directors. Alan Robertson joins our executive leadership team as CHRO.
Definitions and reconciliations of these measures can be found in the earnings release. I will now turn the call over to campy home CEO. Tim Larson.
Thank you, Jason, and good morning everyone. Before we discuss our quarterly results, I want to share an update on the progress. We are making on our strategic priorities. These priorities reflect how we are elevating the business for near and long-term performance.
On our first strategy Winnie is a customer Centric. High performance team, we've added 2, highly accomplished Executives 1 to our board of directors, Mary foa and Alan Robertson as Chief Human Resources officer
Mary's an accomplished leader in the real estate industry with more than 30 years of experience in finance and capital markets.
She co-founded store Capital 1 of the largest and fastest growing real estate investment trusts in the US.
Mary serves as its president and CEO and is a member of its board of directors.
Tim Larson: He has over 15 years of human capital leadership experience, including most recently at Pulte Homes, where he led HR across their manufacturing and field operations teams. Alan's home builder experience and business-first leadership style are a great fit to support and develop our 9,000 team members. We continue to invest in our new product strategy that is bringing in new buyers with home styles and floor plans at the right price point and value. Recently, we received national recognition for our newly launched HUD code and modular homes. You can view the homes on our social platforms. Consistent with our strategy to drive broader awareness to our brands and bring in new buyers to MH, we recently were featured on Designing Spaces on Lifetime Television. The program highlights our homes and how they are each delivered with quality, speed, and affordability without compromise.
Alan Robertson joins, our executive leadership team at chro his over 15 years of human capital leadership experience, including most recently at Pi homes where he led HR across their manufacturing and field operations teams.
Allen's home, builder experience and business. First leadership style are a great fit to support and develop our 9,000 team members.
We continue invest in our new product strategy, that's bringing a new buyers with homestyles and floor plans at the right price point and value.
Recently, we received National recognition for our newly launched HUD code and modular homes, you can view the homes on our social platforms.
Consistent with our strategy to drive broader awareness to our brands and bring new buyers to MH, we were recently featured on Designing Spaces on Lifetime Television.
Tim Larson: From a regulatory perspective, we are pleased with last week's unanimous bipartisan vote by the Senate Banking Committee to advance the Road to Housing Act. The bill includes a specific section titled Manufactured Housing for America that highlights Congress's support for offsite-built homes. We are encouraged that it is advancing to the next step. However, recognize it is early in the legislative process. We will continue to closely monitor the legislation and work with MHI in support of its advancement. Now, I will give an overview of this quarter's performance as well as expectations on the near-term outlook. The team's nimble operational execution resulted in a strong first quarter of fiscal 2026, delivering profitable growth in an ever-changing environment. First quarter year-over-year net sales increased 12% to $701 million, and homes sold during the period increased 8% to a total of 7,215 homes.
The program highlights our homes and how they are each delivered with quality, speed, and affordability without compromise.
From a regulatory perspective, we are pleased with last week's unanimous. Bar partisan vote by the Senate Banking Committee to advance the road to Housing Act.
The bill includes a specific section titled manufactured housing for America.
That highlights congress's support for off-site Built Homes.
We are encouraged that it's advancing to The Next Step. However, recognize its early in the legislative process.
We will continue to closely monitor the legislation and work with mhi and support of its advancement.
Now give an overview of this quarter's performance as well as expectations on the near-term Outlook.
The team's Nimble operational execution, resulted in a strong first quarter of fiscal 2026.
Billion profitable growth in an ever-changing environment.
Tim Larson: The increased sales across our channels and effective cost management delivered strong gross margin and earnings growth in the quarter. We are pacing production to the consumer environment in each market. Plants with larger backlogs increased production rates, while some locations moderated with local market trends. Manufacturing backlog at the end of June totaled $302 million, down 12% sequentially. The average backlog lead time ended the quarter at seven weeks, which is within our target range of four to 12 weeks. Now I will provide some additional commentary from the quarter on each of our sales channels. Sales to our independent retail channel increased compared to the prior year period. In addition to expanding the adoption of our digital and marketing support for dealers, we are also adding independent distribution points.
First quarter year-over-year, net sales increased, 12% to 701, million and homes sold During the period, increased 8% to a total of 7,215 homes.
The increased sales across our channels and effective cost management, delivered, strong, gross margin and earnings growth in the quarter.
We are pacing production to the consumer environment in each market plants with larger backlogs increase production rates while some locations moderated with local market trends.
Manufacturing backlog, at the end of June total 302 million down. 12% sequentially. The average backlog lead time ended. The quarter at 7 weeks, which is within our target range of 4 to 12 weeks.
Now, please provide some additional commentary from the quarter on each of our sales channels.
Sales to our independent retail Channel increased compared to the prior year period.
Tim Larson: At captive retail, sales increased versus Q1 the prior year due to an increase in average selling price and a shift in product mix. We also closed on the eyes on the acquisition in late May. The combined teams are already making good progress on executing retail and product synergies. Moving to the community channel, our community sales were up in the first quarter versus the same period last year, driven by new products and strong engagement by our sales team to match the offering with the needs of today's community operators. Consistent with the consumer environment I mentioned earlier, we anticipate some moderation in the community channel, which may impact near-term order rates. Sales through the builder-developer channel grew in the first quarter versus the same period last year. Our pipeline in this channel remains solid and is growing.
in addition to expanding the adoption of our digital and marketing support for dealers, we are also adding independent distribution points
At captive, retail sales, increase versus q1, the prior year, due to an increase in average selling price and a shift in product mix.
We also close on the aisin acquisition and late May.
Progress in executing retail and product synergies.
Moving to the Community Channel, our community sales were up in the first quarter versus the same period last year.
Driven by new products and strong engagement by our sales, team to match the offering with the needs of today's Community operators.
Consistent with the consumer environment. I mentioned earlier, we anticipate some moderation in the community Channel which may impact near-term order rates
Tim Larson: We remain encouraged by the potential of offsite construction being more widely adopted by builders. Champion Financing, our joint venture with Triad Financial Services, continues to operate effectively. Our retail loan programs continue to be a key lever in today's consumer environment, as it allows our stores to match consumers with the right home and their optimal monthly payment. We are confident that the combination of our joint venture and ongoing access to consumer financing across several lenders provides a diversified portfolio of options for our retailers and consumers. I will now turn the call over to Laurie Hough, who will discuss our quarterly financial performance in more detail.
Sales to the Builder, developer Channel grew in the first quarter versus the same period last year. Our pipeline in this channel remains solid, and is growing
We remain encouraged by the potential of off-site construction. Being more, widely adopted by builders.
Champion financing, our joint venture with try Financial Services continues to operate, effectively.
Our retail loan programs continue to be a key lever in today's consumer environment, as they allow our stores to match consumers with the right home and their optimum monthly payment.
We are confident that the combination of our joint venture and ongoing access to consumer finance across several lenders provides a diversified portfolio of options for our retailers and consumers.
Laurie Hough: Thanks, Tim, and good morning, everyone. I will begin by reviewing our financial results for the first quarter, followed by a discussion of our balance sheet and cash flows. I will also briefly discuss our near-term expectations. During the first quarter, net sales increased 12% to $701 million compared to the same quarter last year, with U.S. factory-built housing revenue increasing 10%. The number of homes sold increased 7% to 6,965 homes in the U.S. compared to 6,538 homes in the prior year period. U.S. home volume during the quarter was supported by healthy demand across our community channel and an increase in builder-developer sales. The average selling price per U.S. home sold increased by 4% to $95,000 due to a shift in mix to more multi-section units and increased pricing at our company-owned retail sale centers. On a sequential basis, U.S.
On the altering, the call over to Lori who will discuss our quarterly financial performance in more detail.
Thanks, Tim, and good morning, everyone. I'll begin by reviewing our financial results for the first quarter, followed by a discussion of our balance sheet and cash flows. I will also briefly discuss our near-term expectations.
During the first quarter, net sales increased 12% to $701 million, compared to the same quarter last year, with U.S. factory-built housing revenue increasing 10%. The number of homes sold increased 7% to 6,965 homes in the U.S., compared to 6,538 homes in the prior year period. U.S. home volume during the quarter was supported by healthy demand across our community channel and an increase in builder-developer sales.
The average selling price per us homes, sold increased by 4%, to 95,000 due to a shift in mix to more multi-section units and increased pricing at our company-owned retail sales centers.
Laurie Hough: factory-built housing revenue increased 18% in the first quarter compared to the fourth quarter of fiscal 2025. We saw a sequential increase due to expected seasonality, as well as a shift of sales from the fourth quarter of fiscal 2025 into the first quarter of fiscal 2026 from delayed home shipments caused by inclement weather across the South in the March quarter. Manufacturing capacity utilization was 61% compared to 60% in the fourth quarter of fiscal 2025. On a sequential basis, the average selling price per U.S. home sold increased approximately 1%. Canadian revenue during the quarter was $30 million, representing a 50% increase in the number of homes sold versus the prior year period. We saw product mix shift to more single-section homes in Canada, as well as stronger demand in the Alberta province versus the same period last year.
I'm a sequential basis US factory-built housing Revenue, increased 18% in the first quarter compared to the fourth quarter of fiscal 2025. We saw a sequential increase due to expected seasonality as well as a shift of sales from the fourth quarter of fiscal 2025 into the first quarter of fiscal 2026 from delayed home. Shipments caused by inclement weather across the South
In the March quarter.
Manufacturing capacity utilization was 61% compared to 60% in the fourth quarter of fiscal 2025.
On a sequential basis. The average selling price per us home sold increased approximately 1%.
Canadian Revenue during the quarter was 30 million representing. A 50% increase in the number of homes sold versus the prior year period.
Laurie Hough: The average home selling price in Canada decreased 3% to $120,500, primarily due to a shift in product mix. Consolidated gross profit increased 16% to $190 million in the first quarter, and our gross margin expanded 90 basis points from 26.2% in the prior year period. The higher gross margin was driven by higher ASPs on new homes sold through company-owned retail sale centers and the unfavorable purchase accounting impact in the prior year related to the increase in the carrying value of inventory acquired in the Regional Homes acquisition that did not recur in fiscal 2026. Gross margin increased sequentially from our fiscal fourth quarter and was higher than expectations, primarily due to lower than expected material input costs, higher captive retail ASPs, and favorable product mix. SG&A in the fourth quarter increased $2 million over the prior year period to $111 million.
We saw a product mix shift to more single-section homes in Canada, as well as stronger demand in the Alberta province compared to the same period last year. The average home selling price in Canada decreased by 3% to $120,500, primarily due to a shift in product mix.
Consolidated gross profit increased, 16% to 190 million in the first quarter and our gross margin expanded 90 basis points from 26.2% in the prior year period.
The higher gross margin was driven by higher asps on new homes, sold through company-owned retail sales centers in the unfavorable purchase accounting impact. In the prior year related, to the increase, in the carrying value of inventory, acquired in the regional homes, acquisition that did not recur in fiscal 2026,
Gross margin. Increased sequentially from our fiscal fourth quarter and was higher than expectations primarily due to lower than expected material input costs higher captive, retail asps and favorable product mix
Laurie Hough: The increase is primarily attributable to higher variable compensation from higher sales, as well as $3.9 million of costs associated with plant closures and the acquisition of Eiffman Homes. Those factors were partially offset by an $8 million expense in the first quarter of fiscal 2025 related to the acquisition of Regional Homes, which did not recur in the current period. The company's effective tax rate for the quarter was 21% versus an effective tax rate of 22.5% for the year-ago period. The decrease in the effective tax rate is primarily due to an increase in tax credits. Net income attributable to Champion Homes for the first quarter increased by $19 million to $65 million, or earnings of $1.13 per diluted share, compared to net income of $46 million, or earnings of $0.79 per diluted share during the same period last year.
Sgna and the fourth quarter, increased 2 million over the prior year, period to 111 million.
The increase is primarily attributable to higher variable compensation from higher sales, as well as 3.9 million of costs, associated with plant closures, and the acquisition of Iseman homes.
Which did not recur in the current period.
The company's effective tax rate for the quarter was 21% versus an effective tax rate of 22.5% for the year ago. Period.
The decrease in the effective tax rate is primarily due to an increase in tax credits.
Laurie Hough: The increase in EPS was driven mainly by improved operating income. Adjusted EBITDA for the quarter was $94 million, which is an increase of $19 million, or 26% compared to the prior year. Adjusted EBITDA margin was 13.4% compared to 11.9% in the prior year period. This increase in EBITDA margin is mainly driven by higher gross margins. We expect near-term gross margin in the 25% to 26% range as we balance cautious consumer sentiment and softer demand in certain markets. As a reminder, our consolidated gross margin fluctuates from quarter to quarter due to changes in product mix, as well as the quantity of sales through our independent channels versus sales through our captive retail stores. As we work through this dynamic market environment, we continue to balance SG&A spending while continuing to drive our strategic growth priorities, including investments in people and technology.
Net income, attributable to Champion, Homes for the first quarter increased by 19 million to 65 million or earnings of a dollar 13 per diluted share compared to net income of 46 million or earnings of 79 cents per diluted share during the same period last year. The increase in EPS was driven mainly by improved operating income.
Adjusted ibida for the quarter. Was 94 million.
Which is an increase of 19 million or 26% compared to the prior year. Adjusted ebit down margin was 13.4% compared to 11.9% in the prior year period.
This increase in ebida, margin is mainly driven by higher gross margins. We expect near-term gross margin in the 25-. 26% range. As we balance cautious consumer sentiment, and softer, demand in certain markets,
As a reminder, our Consolidated gross margin fluctuates from quarter to quarter due to changes in product, mix, as well as the quantity of sales through our independent channels versus sales through our captive retail stores.
Laurie Hough: As of June 28th, 2025, we had $605 million of cash and cash equivalents in long-term borrowings of $24 million, with no maturities until December 2026. We generated $75 million of operating cash flows for the quarter. 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. Subsequent to quarter end, we amended our existing $200 million revolving credit facility and extended the term through July 28th, 2030. The facility provides the company with available liquidity for its strategic initiatives.
As we work through this Dynamic Market environment, we continue to balance, sgna spending while continuing to drive our strategic growth, priorities, including investments in people and Technology.
As of June 28th 2025, we had 605 million of cash and cash equivalents in long-term, borrowings of 24 million with no maturity until December 2026.
We generated $75 million in operating cash flows for the quarter.
In the quarter, we leveraged our strong cash position and returned Capital to our shareholders through 50 million dollars, in share repurchases.
Additionally, our board recently refreshed, our 15 million share repurchase Authority reflecting confidence in our continued strong cash generation.
Subsequent to quarter end. We amended our existing 200 million revolving credit facility and extended the term, through July 28th 2030.
Laurie Hough: We remain focused on executing on our strategic initiatives and, given our favorable liquidity position, plan to utilize our cash to reinvest in the business to support strategic growth and return cash to shareholders. I will now turn the call back to Tim for some closing remarks.
The facility provides the company with available liquidity for its strategic initiatives.
We remain focused on executing on our strategic initiatives and given our favorable liquidity position plan to utilize our cash to reinvest in the business to support strategic growth and return cash to shareholders.
Jason Blair: Thank you, Laurie. Looking to our second fiscal quarter of 2026, as we navigate consumer uncertainty and the factors impacting the overall housing market, we anticipate our second quarter revenue to be flat to up low single digits compared to the prior year period. While we are encouraged by the customer engagement and quoting activity we are seeing, the pace of orders so far in Q2 has been a bit slower than our fiscal second quarter last year. Our teams are being proactive in this environment to ensure production is optimized, and our purchasing team has been very effective at navigating the ever-changing tariff dynamics. Our backlogs remain within a normal range of 4 to 12 weeks, and we are taking measured actions to manage fixed costs. We continue to review internal survey data to understand who is buying our homes.
I'll now turn the call back to Tim for some closing remarks.
Thank you, Lori. Looking to our second fiscal quarter of 2026. As we navigate consumer uncertainty in the factors, impacting, the overall housing market, we anticipate our second quarter Revenue to be flat to upload single digits compared to the prior year period while we are encouraged by the customer engagement and quoting activity. We're seeing the Pacers of orders so far in Q2 has been a bit slower than our fiscal second quarter last year.
Our teams are being proactive in this environment to ensure production is optimized and our purchasing team has been very effective at navigating the ever-changing Tariff Dynamics.
Our backlogs remain within a normal range of 4 to 12 weeks and we are taking measured actions to manage fixed costs.
Jason Blair: It is encouraging to see that we are consistently attracting first-time home buyers as well as first-time buyers of manufactured homes. This reinforces that our products are a core solution to address the need for affordable housing in the U.S. and Canada. It is one of the many reasons the future for Champion Homes is promising, and we are confident in the strategies we are executing to deliver value to all stakeholders. Our strategic long-term priorities that I have shared on previous calls provide a clear vision to execute effectively in today's environment and the discipline to effectively deploy our capital. In summary, we believe Champion Homes is well positioned to navigate this uncertain market while maintaining a steadfast focus on our long-term strategic growth priorities and daily execution, all grounded in our commitment to our customers, team members, and shareholders.
We continue reviewing internal survey data to understand who is buying our homes. It is encouraging to see that we are consistently attracting first-time home buyers as well as first-time buyers of manufactured homes. This reinforces that our products are a core solution to address. The need for affordable housing in the US and Canada.
It's 1 of the many reasons, the future for Champion is promising and we are confident in the strategies we are executing to deliver value to all stakeholders.
Our strategic long-term priorities that I've shared on previous calls, provide a Clear Vision to execute effectively in today's environment and the discipline to effectively deploy our capital.
Jason Blair: Thank you, everyone, for tuning in to today's call and for the Champion Homes team for their continued efforts with a strong start to the fiscal year. I look forward to updating you all in the second quarter later this year. Now, let us open the line for questions. Operator, please proceed.
in summary We Believe Champion Homes is well positioned to navigate this uncertain Market, while maintaining a steadfast focus on our long-term, strategic growth, priorities and daily execution, all grounded in our commitment, to our customers, team members, and shareholders,
Thank you, everyone for tuning in to today's call and for the Champion Homes team for the continued efforts with a strong. Start to the fiscal year. I look forward to updating you all on the second quarter later this year.
And now let's open the line for questions.
Operator, please proceed.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question is from the line of Greg Palm with Greg Halem Capital Group. Please go ahead.
The question and answer session to ask a question star, then 1 on your telephone keypad. If you're using a speaker-phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star. Then 2 at this time we will pause momentarily to assemble our roster.
The first question is from the line of Greg Palm with Greg, Halen Capital group, please go ahead.
Greg Palm: Yeah. Hey, thanks. Good morning. Maybe we can just start with a little bit more commentary on the backdrop, the environment relative to what you talked about in late May. What has changed geographically? It sounds like recent order rates may be softening a little bit more, but just give us a little bit more color on what you are seeing out there, please.
Yeah. Hey thanks. Good morning. Uh,
Tim Larson: Yeah. Appreciate it, Greg Palm. So first off, we had stronger community business in Q1. As we talk to our community customers, they are seeing some of the same consumer dynamics, so we don't anticipate that continuing in the near term, but still having steady business with our community customers. We had our plant backlogs in Q1 that the plants with larger backlogs were able to produce, and those were in the regions of the country that we've talked about previously with some strength, whether that be the West as an example. Some of the softness that we saw in the South that we've talked about hasn't really returned back to some of the robust demand. Overall, those impacts that we factored into Q2.
maybe we can just start with uh, a little bit more commentary on on kind of the backdrop. The, the environment relative to kind of what you talked about in in late May so what, you know, maybe just what's changed, you know, geographically, you know, recently, it sounds like recent order rates, maybe softening, maybe a little bit more, but just give us a little bit more color on what you're seeing out there, please.
Yeah.
Appreciate it Greg. So first off, we had stronger community business in q1. Um, and as we talked to our community customers, you know, they're seeing some of the same consumer Dynamics, so we don't anticipate that continuing in the near term. Um, but still having, you know, steady business with our community customers. Um, we had our plant backlogs in q1 that the plants with larger backlogs. We were able to produce and those are in the regions of the country that we've talked about previously.
Tim Larson: The other driver is, as we look across our channels, we have leading indicators that we look at, and those are some of the drivers that we see from our Q2 view. What I would share is that over the last six months, we've been able to grow share in HUD and grow share against single family, which is encouraging in the market environment that we're in. So it's more of the consumer indicators, Greg, that we're seeing that affect our view of Q2, but I'm pleased with how the team is out there every day driving the business in this environment.
Greg Palm: Thinking back to what you talked about in late May when you reported Q4 results, what happened in June specifically? You vastly outperformed relative to what you talked about for revenue and gross margin. Can you just give us a little bit of sense on where June was relative to what you thought back in late May?
Strength. Whether that be the West, uh, as an example, um, some of the softness that we saw in the South that we've talked about hasn't really returned back to some of the robust demand. Um, so overall, those impacts that we factored into the Q2. Um, the other driver is as we look across our channels, we have leading indicators that we look at and those are some of the drivers that we see from our Q2, uh, view. What I would share is that, over the last 6 months, we've been able to grow share in HUD and grow, share against single family, which is encouraging, uh, in the market environment that we're in. So, it's more of the consumer indicators, Greg that we're seeing that affect our view of Q2. Um, but I'm pleased with how the team is out there every day. Driving the business, uh, in this environment
Tim Larson: A big change was certainly the impact of the community business, and that drove a lot of the impacts in Q1. As I mentioned, we look at each backlog by plant and where they can increase production rates. As Laurie mentioned in her remarks, we had some improved pricing relative in our captive retail business. The other driver is our material costs weren't as significant as they'd been previously in the quarters that have benefited Q1, which then all of that combined to flow through earnings in a strong quarter. As we go into Q2, we don't have some of those same dynamics, and we can already see that. That's why we have the view that we have for Q1 in terms of the guide that I provided on the revenue earlier. It's some of those different drivers that we see as impacting Q1 versus Q2.
And, and just kind of thinking back to what you talked about in in, in late May when you reported Q4 results. I mean, what, what happened in June specifically, cuz you vastly outperformed relative to what you talked about for, you know, revenue and and gross margin. So can you just give us a little bit of sense on where, where June was relative to what you thought back in late May?
So, a big change with certainly, the impact of the community business, um, and that drove a lot of the impact in q1. Uh, and then, as I mentioned, we look at each backlog by plant and where they can increase production rates. Um, and as Laurie mentioned, in her remarks, um, we had some improved pricing relative in our captive, retail business.
The other driver is our material costs.
Um, we're in a significant as they've been previously in the quarters. Uh, that have benefited q1, uh, which then all of that combined to flow through earnings in a strong quarter. Um, and so as we go into Q2, we don't have some of those same Dynamics and we can already see that. Uh, and so that's why we have the view that we have, uh, for q1. In terms of the guy that I provide on the revenue earlier
Greg Palm: Okay. Okay. If I could just sneak one more quick one. Laurie, you mentioned, you know, these delayed shipments from the March quarter to the previously quarter. How many homes was that? What was the revenue impact? I do not recall you quantifying that last quarter.
Um, so some of the different drivers that we see impacting Q1 versus Q2.
Laurie Hough: Yeah, we didn't quantify it, Greg Palm, and we're not going to quantify it, but we, you know, that was part of the, certainly part of the difference between our expectations. I think originally we were thinking that would flow in over the first and second quarter of this fiscal year, and the majority of it hit all in the first quarter. So that is certainly one of the differences between late May and where the results ended up as well.
Okay. Okay. And then if I could just sneak 1 more quick 1, Laura you mentioned you know these delayed shipments from the the March quarter to the now previously quarter, how many homes was? That was the revenue impact? I don't recall you quantifying that last quarter.
Yeah, we didn't quantify it, um, Greg and we're not going to quantify it, but we, you know, that was part of the certainly part of the difference, um, between our expectations. Um, I think originally, we were thinking that would flow in over the first and second quarter of this fiscal year and the majority of it, hit all in the first quarter. So that is certainly um, 1 of the differences between
Tim Larson: Yeah, and I think, Greg, too, if you look at the industry, we were pretty in line with the industry, what we were signaling for Q1. What changed is we got more benefit from those items that weren't in Q2 or those homes, and then the other drivers are mentioned. So from an industry perspective, our Q1 kind of outlook was pretty consistent, but to your point, we did outperform given the drivers that I mentioned.
Late May and and where the results ended up as well. Yeah and I think Greg too. If you look at the industry, we were pretty in line with the industry. What we were signaling for q1, what changed is we got more benefit from those items that were in in queue for those homes and then the other drivers are mentioned
Greg Palm: Yep. Understood. All right. Appreciate the caller. Thanks.
Um, so from the injury perspective, our q1 kind of Outlook was pretty consistent. But to your point we did outperform given the drivers that I mentioned.
Yep, understood. All right, appreciate the caller. Thanks.
Operator: The next question is from the line of Daniel Moore with CJS Securities. Please go ahead.
The next question is from the line of Daniel Moore with CJ s security. Please go ahead.
Daniel Moore: Thank you. Good morning, Tim. Good morning, Laurie. Maybe just pulling on the string in the community channel, you talked about anticipating some moderation. I think you mentioned, Tim, a little bit in terms of geographic dispersion and the consumer softening. Is it more a function of just not picking up, or are things actually softening a little bit? If so, what geographies, and what is sort of holding some of your community partners back? Thanks.
Thank you. Good morning, Tim. Good morning Lori. Um,
Tim Larson: Yeah, thanks. No, we certainly have seen a robust community order through Q1. What we are sharing is that rate we do not anticipate continuing in Q2. It is as each community operator is looking at where their projects are, where their demand is, and balancing that with the consumer environment. It is fairly across multiple geographies. As you know, we have a number of community operators around the country. So those are on a case-by-case basis. It is pretty consistent with what we have talked about before about various geographies. So it is not saying that, I mean, the community business, there is some strength there, and certainly versus where it was over a few years ago, but it is more at the growth rate going forward.
Talked about anticipating some moderation. Um, I think you mentioned, you know, Tim a little bit in terms of geographic dispersion, um, but and and the consumer softening but you know, is it more a function of just not picking up or things? Actually, you know, softening a little bit if so you know what geographies and and you know what's uh sort of holding some of the Your Community Partners back? Thanks.
Tim Larson: So we are working with each community customer to make sure that the pace of production and the homes that they are looking for based on that match that. We are just signaling that what we saw in Q1, we do not anticipate continuing into Q2 at the same rate.
Yeah, thanks know. We certainly have seen our robust community order through the first quarter. What we're sharing is that rate, we don't anticipate continuing in Q2 and it's as each Community, operator is looking at where their projects are, where their demand is and balancing that with the consumer environment, and it's fairly across multiple geographies. As, as you know, we have a number of community operators around the country. And so, those are in a case by case basis, it's pretty consistent. What we've talked about before about various geographies, so it's not saying that, I mean the community business, there's some strength there and, and certainly versus where it was over a few years ago, but it's more at the growth rate going forward.
Daniel Moore: Got it. That's helpful. Net new orders, as you just described, up in the quarter, you saw some strength there. The guide flat to upload single digits year over year in Q2. Based on where we're trending quarter to date in terms of order rates, would that leave backlogs relatively flat sequentially? Are you sort of operating one in one out, or do you anticipate drawing backlogs down a bit more in this quarter?
And so we're working with each Community, customer to make sure that the pace of production and the homes that they're looking for based on that match that. And we're just signaling that we what we saw in q1, we don't anticipate continuing into Q2 at the same rate
Tim Larson: Yeah, we anticipate being in our normal range, and we will update you exactly where that lands. One of the specific things we are doing is plant by plant, looking at what makes most sense in their market for that backlog utilization. As I mentioned, for Q1, we had some opportunities in certain locations. We will look to do that in Q2. Also, in other markets, we will moderate it just based on what makes sense in their environment. But we plan to be in our normal background range for the quarter.
Got it that's helpful. Um, net new orders as you just described, you know, up in the quarter. Um, you saw some strength there, the guide flat to upload single digits year-over-year in Q2, you know, based on where we're trending quarter to date. In terms of order rates, would that leave backlogs relatively flat sequentially? Are you sort of operating 1 in 1 out, or do you anticipate drawing backlogs down a bit more in this quarter?
Daniel Moore: Got it. Nice kind of turnaround or pickup in Canada. Is it one specific industry driving that demand? What is the outlook as we look forward? Is the recovery we saw in the quarter sustainable?
Yeah, we anticipate being in our normal range and we'll update you exactly where that lands and 1 of the specific. Things, we're doing, is plant by plant looking at what makes most sense in their market for that backlog. Utilization, as I mentioned for q1, we had some opportunities in certain locations, we'll look to do that in Q2. Uh, and then also another markets, we'll moderate it just based on what makes sense in their environment. But we plan to be in our, our normal background range for the quarter.
Tim Larson: Yeah, it was strength in Alberta. Certainly, from an overall total business, it is 4% of our revenue. So, you are going to see some relative movement within that percent. As we have mentioned, that market is pretty dynamic. We saw some recovery, but we are very poised in terms of how we think about that business. They face some of the challenges at the consumer level as well. So I think we are balanced in terms of how we think about Canada, but we are pleased by the progress we saw in Q1 in the Alberta region.
Got it. Um nice kind of turnaround or pickup in Canada. Um, is it 1 specific industry driving that and that demands um and uh you know, what's the Outlook as we look forward? Uh as how sustainable is the recovery, we saw in the quarter,
Daniel Moore: Okay. Last for me, Laurie, a sense for what Champion Homes contributed to revenue in the quarter as well as backlog at quarter end?
Yeah, it was strength in Alberta. Um, and certainly from a overall total business, it's 4% of our Revenue. So, you know, you're going to see some, you know, relative movement within that percent. Um, as we've mentioned, that Market's pretty Dynamic. We saw some recovery. Um, but we're very poised in terms of how we think about that business. They they face some of the challenges that the consumer level as well. Um, so I think we're balanced in terms of how we think about Canada, but we're pleased by the progress. You saw in q1 uh in the Alberta region.
Okay, and last for me Lori um, since for what Iseman homes, contributed to revenue in the quarter, as well as backlog at at quarter end.
Laurie Hough: We closed on Eisman on May 30th, so it was one month of revenue that was included in the results for the first quarter. Backlog, Dan, is really our manufacturing backlog. Our captive retail has no impact on our backlog numbers.
Daniel Moore: Great. Okay. That's helpful. Thank you again. I'll circle back with any follow-ups.
So, um, we closed on Iceman on May 30th so it was 1 month. Um, of Revenue that was included in the results for the first quarter. Um backlogged in is really our manufacturing backlog. So our captive retail has no impact on on our backlog numbers.
Great. Okay. That's helpful. Thank you again. I'll Circle back when we follow ups,
Operator: The next question is from the line of Matthew Bouley with Barclays. Please go ahead.
Daniel Moore: Good morning, everyone. Thank you for taking the questions. On the gross margin, I think in Q1 there, you spoke to some of these, I guess, surprising positives that led to the beat, maybe better input costs and some pricing in captive retail. I am just trying to understand, sequentially into Q2, going back to 25% to 26%, if I heard you correctly, I guess what sequentially would be a little softer to drive that? I just want to understand, are we still thinking 25% to 26% is kind of where you will be beyond the quarter, or, how are you thinking about getting back to that longer-term range of 26% to 27%? Thank you.
Matthew, July with Berkeley's, please go ahead.
Uh, good morning everyone. Thank you for taking the questions, um, on the, uh, on the gross margin. Um, so I, I think in, in q1 there, you spoke to some of these, I guess, surprising positives, um, that led to the beat. Um, you know, maybe better input costs and and, and some pricing and, and captive retail. And I'm just trying to understand, you know, sequentially into Q2 uh, going back to 25 to 26. If I heard you correctly. I guess. What, what sequentially would be? Uh, a little softer to to drive that? Um, and and I just want to understand, are we still?
Laurie Hough: Matt, thanks for the question. In Q2, we are really balancing the cautious consumer sentiment and softer demand in certain markets. As a reminder, our gross margins can fluctuate pretty significantly, actually, from quarter to quarter due to product mix, including single-wide versus multi-section mix, option content in products, as well as the mix between manufacturing volume going through captive retail versus independence. So that can drive a significant shift from quarter to quarter. We do think the 25% to 26% gross margins are going to continue in the near term.
Uh, thinking 25 to 26 is kind of where you'll be for the, you know, beyond the quarter or you know, how are you thinking about getting back to that longer term range of 26 to 27? Thank you.
Including single wide versus multi-section mix option, content in products as well as the mix between manufacturing volume, going through captive, retail versus Independence. So that can drive, um, a significant shift from quarter to quarter. We do think the 25- 26%. Um, gross margins are going to continue in the near term.
Daniel Moore: Okay. Got it. I guess just on SG&A as well, obviously showed some leverage there in Q1 on the strong revenue growth. As you are talking about kind of flattening out, I guess, year over year in the second quarter, any thoughts on how SG&A leverage might shape up as we go through this year? Thank you.
Laurie Hough: Yeah, we are going to continue to balance SG&A based on what we are seeing from a demand perspective.
Okay, got it. Um, and then I, I guess just, uh, on sgna as well. Um, obviously showed some leverage there in q1, on the strong Revenue growth and, you know, but as you're talking about, kind of flattening out, I guess year-over-year in the second quarter. I mean, any thoughts on how sgna leverage might, uh, shape up as we go through this year? Thank you.
Yeah, we're going to continue to balance sgna. Um, based on what we're seeing from a demand perspective,
Daniel Moore: Okay. Thanks, Laurie. Good luck, guys.
Okay, thanks Lori. Good luck, guys.
Operator: The next question comes from the line of Mike Dahl with RBC Capital Markets. Please go ahead.
Daniel Moore: Hi, thanks for taking my questions. First question on some of the pricing dynamics. I think the mix side is pretty clear, but you mentioned price increases on new products and at your captive retail. Can you speak a little more to what those like-for-like pricing dynamics were, where you took price, the rationale for taking price, and what the response has been?
The next question comes from the line of Michael's Doll with RBC Capital Markets. Please go ahead.
Hi, thanks for taking my questions. Um, first question on some of the pricing Dynamics, I think the mixed side is pretty clear, but you mentioned price increases on new products and, uh, your captive retail. So can you speak a little more to, you know, what those like for, like pricing Dynamics were where you took price the rationale?
for taking price, um, and and what the response has been
Laurie Hough: Thanks, Mike, for the question. Our pricing strategy varies by market and geography. So we are really trying to, more broadly, across all geographies, balance volume and price given the local demand environment in each region.
Thanks Mike for the question. Um you know our pricing strategy varies by market and geography. So we're really trying to more broadly across um all geographies balance volume and price. Um given the local demand environment in each region.
Daniel Moore: Okay. Could you put an order of magnitude on what that like-for-like increase contributed?
Okay. Could could you put an order of magnitude on on what that like for like increased contributed?
Laurie Hough: You know, we are not going to separately disclose that. It is all part of wrapped up in the U.S. segment housing. So we did see at manufacturing that, you know, wholesale prices remained relatively flat, but we did see an increase in retail pricing. It had been a while since our captive retail locations had taken some price. So they were able to take advantage of that in certain geographies this quarter.
Daniel Moore: Got it. Okay. In terms of, I guess, going back to Greg Palm's question around visibility, the guide you gave was two months into the quarter at the time you gave it. I understand that things can fluctuate quite a bit, but at any given point in time, you do have half a quarter's worth of backlog, give or take, to give you some visibility. My question is more around internal processes and whether there is anything that you are working on or can work on that helps give you a little better visibility into refining some of those near-term guideposts, whether it is communicating externally or, I assume, operating internally, having this type of variance probably is not optimal. Can you just give us a sense of anything that you guys are doing to try to refine that internally?
Um, you know, we're not going to separately disclose that. It's all part of wrapped up in the US segment housing. So we did see at manufacturing that um you know, wholesale prices, remained relatively flat. Um but we did see an increase in retail pricing. It had been a while since our captive retail locations had taken some price. So um they they did were able to take advantage of that in certain geographies. This quarter
Got it. Um, okay. And then in in terms of I guess going back to Greg's question.
Around kind of visibility, right? So the guide you gave was kind of 2 months into the quarter at the time you gave it and I understand that things can fluctuate quite a bit, but at any given point in time you do have you do have um, you know, half a quarter's worth of backlog, give or take to give you some visibility. So my question is more around.
Of internal processes. And whether there's anything that you are working on or can work on that, help, give you a little better visibility into refining.
Um, some of those near-term.
Laurie Hough: Yeah, Mike. A lot of it has to do with the closing of end-consumer transactions at the end of any given month or quarter, and that is dependent on a lot of different factors. As we mentioned earlier, we were able to pull forward a lot of the pent-up inventory that we were not able to close in the fourth quarter into the first quarter. It is dependent on weather, it is dependent on the consumer's financing and what of those transactions can happen to get an order counted as a sale at the end of any given month or quarter. We do, obviously, have financial forecasting tools and methodologies, but there are a lot of moving pieces when it comes to the end-consumer closing of transactions as of a specific date.
Um, guideposts whether it's communicating externally or or I assume operating internally having this type of variance, probably isn't isn't optimal. So it can can you just give us a sense of anything that you guys are doing to try to refine that in terms of
Yeah, Mike. So um, a lot of it has to do with the closing of end consumer transactions at the end of Any Given month or quarter and that's dependent on a lot of different factors. Um, so as we mentioned earlier, we were able to pull forward. A lot of the pent-up inventory that we weren't able to close in the fourth quarter into the first quarter. Um, and so it's it's dependent on whether it's dependent on, you know, the consumer's financing and what of those transactions can happen to get. Um uh, an order counted as a sale at the end of the at the end of Any Given month or quarter. So um we do you know obviously have Financial forecasting tools and methodologies but um there's a lot of moving pieces when it comes to the end consumer. Um
Uh closing of of transactions, out of as of a specific date.
Daniel Moore: Got it. Okay. Thank you.
Got it. Okay, thank you.
Operator: The next question is from the line of Phil Ng with Jefferies. Please go ahead.
Daniel Moore: Hey, guys. Congrats on another really strong quarter. So, Tim, if I heard you correctly, it sounds like your WEAT channel, community channel business, is still growing, but perhaps its pace is slowing down a touch. When you kind of look at order trends by different channels, it would be helpful to kind of give us a little color whether it is independent, direct to builder, how that is kind of shaping up from an order trend perspective. Any color from a channel inventory level, any risk that there is too much inventory and you got to destock in any pockets?
The next question is from the Randall Inc with uh Jeff please go ahead.
Tim Larson: Appreciate that, Phil. On the builder-developer side, we have had some new projects come online that are encouraging. As I have mentioned before, those go through quite a process from where they are at zoning all the way through execution. We will work through that process with those customers. In terms of our independent channel, the overall guide that I mentioned factors in what we are seeing there, which is we have had really good quoting activity with our independents. Part of the order trend we are looking at is how does that conversion really work through the Q2 results. Right now, we are not seeing as strong a conversion as we saw in Q2 of last year, but still decent quoting activity with our independents. In terms of our captive retail, as I mentioned, we did see growth in that channel on the revenue side.
I look at order Trends by different channels, it would be helpful to kind of give us a little color with its independent direct Builder how that's kind of shaping up from a order Trend, uh, perspective and any color from a channel, inventory level, any risk that there's too much inventory, and you got to do stock in any pockets.
Appreciate that. So uh so on the Builder developer side. Um, we've had some uh new projects come online that are encouraging as I've mentioned before those go through quite a process from where they are, at zoning all the way through execution. Um, so we'll work through that process with those customers. Um, and then, in terms of our independent Channel, um, what the, the overall guide that I mentioned factors in, what we're seeing there, uh, which is we've had really good quoting activity with our independence. Um, but you know, part of the order Trend, we're looking at is how does that conversion? Really, you know, work through the Q2, uh, results. And right now, we're not seeing as strong and conversions. We saw in Q2 of last year, but still, you know, decent quoting activity with our independents.
Tim Larson: Part of what the team was working through there is we anticipated last fall a pretty significant opportunity going into Q1 and Q2 of this year. With not a stronger consumer environment, we have had to work through some inventory in that channel, and they are doing that. I think from our perspective, that is part of a prudent approach we are taking with our captive retail is to work through that inventory. As far as the other channels go on inventory, I think we are pretty balanced on an overall basis, but we certainly work with our dealers on a case-by-case basis to make sure we are having the right inventory for their customers. Beyond just aggregate inventory, it is the right products in this environment, given the consumer price points that we want to hit and the payments we want to hit.
Um, in terms of our captive retail, uh, as I mentioned, we did see growth in that channel and the revenue side, um, part of what the team was working through. There is, we anticipated, you know, last fall, a pretty significant opportunity going into q1 and Q2 of this year and was not as strong a consumer, uh, environment. Um, we've had to work through some inventory in that channel, um, and they're doing that. And so, I think from our perspective, that's part of a, a prudent approach, we're taking with our captive. Retail is to work through that.
Tim Larson: From our perspective, I think each channel, it is really relative to the Q1 growth rate, but we are encouraged by the quoting activity across our channels and the progress. It is just relative to the growth rate we saw in Q1 is more where we are seeing the moderation.
Greg Palm: On the inventory that you are kind of working through on your captive retail, should we expect that to be largely flushed out this quarter, or is it going to take a little more time?
Inventory as far as the other channels. Go on inventory. You know I think we're pretty balanced and on an overall basis but we certainly work with our dealers on a case-by-case basis to make sure we're you know having the right inventory for their customers and it and Beyond just aggregate inventory. It's the right products in this environment uh given the Consumer Price points that we want to hit and the payments we want to hit. So from our perspective, I think you know, each channel, it's really relative to the q1 growth rate, but we're encouraged by the coding activity across our channels and the progress. It's just relative to the growth rate. We saw in q1 is more where we're seeing the moderation.
Tim Larson: You know, at this point, we're working that, you know, week by week and location by location. We have over 80 retail stores. So, I'm pleased with the progress the team's making there, and they're doing it very thoughtfully. But we'll give you an update on that in Q2.
And then on the inventory that you're kind of working through on your captive retail. Um should we expect that to be largely flushed out? Um this quarter? It's going to take a little more time.
Greg Palm: Okay. A question for Laurie Hough. Gross margins were great. You mentioned lower input costs help, and I suspect part of that is lumber and OSB prices falling. Should we still expect input costs to be a good guide in this current quarter? Not to say you have clarity, but certainly a little more on tariffs. Can you give us some color on how you are thinking about inflation broadly as it relates to the tariffs? Do you need to go out and raise prices to kind of offset that? Certainly, lumber duties, I think, coming out of Canada will start to pick up over the course of the year.
You know, at this point, we're, we're working that, you know, week by week and and location by location. And we have over 80 retail stores. So, um, you know, I'm pleased with the progress, the teams, making their and they're doing it very thoughtfully. But we'll give you an update on that. And, and Q2,
Okay, and the question for Lori. Um, gross margins were great. Um, you mentioned lower input costs help, I suspect part of that is Lumber and OSB price is falling. Um, should we still expect input costs to be a good guy in this current quarter? And not to say you have Clarity but certainly a little more on tariffs. Can you give us some caller on how you're thinking about just inflation broadly, as it relates to the tariffs, uh do you need to go out and raise prices its kind of offset that certainly Lumber duties? I think
Canada will start to pick up over the course of the year.
Laurie Hough: Phil, I do think that lower material costs will continue to help margins. They seem to be staying relatively stable. Other than forest products, we are seeing some increases in some components. As far as tariffs are concerned, we have evaluated the tariff impact. It was not substantial, actually not very significant at all in the first quarter. As you know, they are constantly evolving. Our current estimate is that our unmitigated impact on our material costs is approximately 1% of our material costs for tariffs. We will use a combination of alternative sourcing as well as price where demand allows.
Yeah. So um, so uh,
From, I do think that lower material costs will will, um, continue to help. Um, margins, you know, they seem to be staying relatively stable, other than Forest Products. We are seeing some increases and in some components, um, and then, as far as tariffs are concerned, we have evaluated, um, the Tariff impact it wasn't substantial. Um, actually not very significant at all in the first quarter. Um, and as you know, they're constantly evolving, um, our current estimate is, um, that are unmitigated impact on our material cost is approximately 1% of our material costs for tariffs. Um, and we will use a combination of, um, alternative sourcing as well as price.
Greg Palm: Okay. Super. Appreciate the color. Thank you.
uh, where demand allows
super appreciate the color. Thank you.
Operator: The next question is from the line of Jesse Lederman with Zelman & Associates. Please go ahead.
Daniel Moore: Hey, thanks for taking the question and nice job in the quarter. Follow-up question, Laurie, on the tariff impact, the 1%. Is that already contemplated within the reiterated 25% to 26% near-term range, or will that be an incremental impact on top?
The next question is from the line of Jesse laderman with zelman and Associates. Please go ahead.
Laurie Hough: It is considered in that 25% to 26% based on known tariffs today.
Hey, thanks for taking the question and nice job in the quarter. Uh, follow-up question, Lori on the the Tariff impact. The 1% is that already contemplated within the revi within the reiterated, 25, to 26% near-term range, or will that be an incremental impact on top?
Daniel Moore: Okay, got it. Were you able to quantify the impact from tariffs? You said it was basically not significant at all, I guess. Was it like a dozen basis points or something in Q1, or just to kind of understand how that chain might change from fiscal Q1 to Q2?
It, it is considered in that 25 to 26% based on known tariffs today.
Okay. Got it and then were there any
Laurie Hough: It was not material in fiscal Q1 primarily because of the flow of our inventory. We do have inventory on hand in our factories, Jesse. That's the primary impact.
Change from fiscal 1 Q to 2q.
Daniel Moore: Okay. Got it. So basically, no impact in Q1 and then can go up to 1% of COGS in Q2, but already contemplated within the guide.
It was not Material in fiscal 1 Q primarily um because of the flow of our inventory. We do have inventory on hand in our factories. Um, Jesse. So that that's the primary impact
Laurie Hough: 1% of material costs. Not with.
Daniel Moore: Of material costs, right?
Okay, got it. So basically no impact in 1 q. And then up can go up to 1% of cogs in 2 q, but already contemplated within the guy 1% of material cost.
Laurie Hough: Yes.
Daniel Moore: Yep. Got it. Which is about half of the overall COGS. Is that right?
Laurie Hough: In that range.
That material cost, right? Yeah, yeah. Got it. Which is about half of the overall cogs. Is that right?
Daniel Moore: Okay. Thanks. Last question. Through the new JV, the financing JV, are you, or even just through captive retail, able to track or measure the average household income of those that are purchasing homes or applying for loans and whether that has increased or decreased over time?
In that range.
Okay.
Um, thanks. And then last question through the new JV, the financing JV are you or even just through captive retail?
Are you able to track or measure the average household income of those that are purchasing homes or applying for loans? Uh, and whether that's increased or decreased over time,
Tim Larson: So, Jesse, I mentioned that reviewing the internal survey data of our customers, there are elements in there. Part of that is where the buyer's coming from, what their previous home ownership, what type of dwelling they're in. We are seeing a lot of first-time home buyers. We are seeing people new to manufactured homes from demographics, from a socioeconomic income. That is some of the cross-section we are doing. Right now, we are not going to be sharing that publicly because some of that is where we are pricing our approach and some of our consumer approaches. I would say we are encouraged by what we are seeing there. We are encouraged by the ability for that consumer to pay, and we are also encouraged by how we are attracting new customers to manufactured housing.
So Jesse I mentioned that reviewing the internal survey data of our customers and there are elements in there and part of that is where where the buyers coming from what their previous home ownership uh what type of dwelling they're in and we're seeing a lot of first-time home buyers. We're seeing people new to manufactured homes from a demographics from a socioeconomic income that some of the Cross sections that we're doing. Um, and right now we're not going to be sharing that publicly because some of, that's where we're
Daniel Moore: Okay. That's great. Yeah, I was curious if maybe you were seeing higher household income could be reflective of consumers that are mixing lower from, you know, site-built housing, if that's something you're willing to disclose. But otherwise, appreciate all the color.
For pricing our approach and some of our consumer approaches. So I would say we're encouraged by what we're seeing there. We're encouraged by the ability for that consumer to pay. And we're also encouraged by how we're attracting new customers to manufactured housing.
Tim Larson: What I can say is we are seeing people come from previously owning a site-built home to manufactured housing. That is encouraging. What I do think we have to recognize is, and this is the consumer environment, those consumers are impacted by the general impact of the economy and inflation. So it is an opportunity for us. Certainly, part of the tailwind we anticipate over time, which is why we are doing the marketing to bring in new consumers, the new products that we are doing. That is certainly shifting that over time. So far, we are encouraged by what we are seeing from those efforts and bringing in those new buyers.
Okay, that's great. Yeah, I was curious if maybe you were seeing higher household income could be reflective of consumers that are mixing lower from, you know, site built housing. Um if that's something you're willing to disclose um but otherwise appreciate all the color.
Daniel Moore: Great. Thanks so much for the color, Tim and Laurie.
Yeah, what I can say is, we are seeing people come from previously, owning a site built home to manufactured housing and so that is encouraging. What I do think we have to recognize is and this is the consumer environment. Is those consumers are impacted by the general impact of the economy and inflation. So it's an opportunity for us. Uh, and certainly part of the Tailwind, we anticipate over time, which is why we're doing the marketing to bring in new consumers. The new products that we're doing. Um, but that's certainly shifting that over time. But so far, we're encouraged by what we're seeing from those efforts and bringing in those new buyers.
Great. Thanks so much for the color Tim and Lori.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Tim Larson for any closing remarks.
Tim Larson: As I mentioned earlier, it is encouraging that we have been able to grow share the last six months, and it reflects the team's commitment to innovating with products and engaging our customers. We appreciate your time today and your questions and your interest in Champion and our strategy going forward. With that, we will wrap it up and look forward to updating you next quarter. Thanks so much.
This concludes our question and answer session. I would like to turn the conference back over to team Larson for any closing remarks.
As I mentioned earlier, it's encouraging everyone to be able to grow. Share the last 6 months and it reflects the team's commitment to innovating with products and engaging our customers. And uh we're appreciate your time today and your questions and your interest in championing, our strategy going forward. So with that we'll wrap it up and look forward to updating you next quarter. Thanks so much.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now.
Has now concluded.