Champion Homes (SKY) Q1 2025 earnings summary

Executive summary

• Net sales rose 35.1% year-over-year to $627.8 million, driven by the Regional Homes acquisition and increased U.S. home sales and demand for affordable housing.

• U.S. homes sold increased 35.7% to 6,538, while Canadian factory-built home sales declined due to market softness.

• Net income declined 10.7% to $45.8 million, impacted by higher SG&A expenses and a $7.9 million charge related to Regional Homes contingent consideration.

• Adjusted EBITDA increased 12.2% to $75.0 million, supported by higher sales volumes and gross profit.

• Company rebranded to Champion Homes, Inc., emphasizing a unified brand and direct-to-consumer strategy.

Financial highlights

• Gross profit increased 26.6% to $164.2 million; gross margin contracted 170 bps to 26.2%.

• SG&A expenses rose to $108.8 million, including a $7.9 million charge for contingent consideration.

• Diluted EPS was $0.79, down from $0.89 year-over-year; adjusted EPS increased 2.2% to $0.91.

• Net cash from operating activities was $84.6 million, up from $74.9 million year-over-year; cash and equivalents rose to $548.9 million.

• Repurchased $20 million in shares; share repurchase program refreshed to $100 million.

Outlook and guidance

• Q2 top-line performance expected to be flat or slightly down sequentially due to weather-related production and shipment delays.

• Management expects continued strong demand for affordable housing, supported by demographic trends and a growing need for attainable housing solutions.

• Backlog as of June 29th was $405 million, with lead times averaging 11 weeks; production ramping to address backlog.

• Company anticipates maintaining compliance with debt covenants and sufficient liquidity for operations and strategic initiatives.

• Gross margins expected to fluctuate 100–200 bps quarter-to-quarter based on channel and product mix.