Champion Homes (SKY) Q2 2025 earnings summary

Executive summary

• Net sales for the quarter ended June 28, 2025, increased 11.7% to $701.3 million, driven by higher volumes and average selling prices in both U.S. and Canadian operations, with strong execution and significant contributions from the Regional Homes acquisition.

• U.S. homes sold increased 31.3% to 6,357 units, while Canadian factory-built home sales declined due to market softness.

• Net income attributable to the company rose 41.3% to $64.7 million, with diluted EPS of $1.13, up from $0.79 in the prior year.

• Adjusted EBITDA grew 25.6% to $94.2 million, reflecting improved operating leverage and higher gross profit margins.

• The company completed the acquisitions of Regional Homes and Iseman Homes, expanding its retail footprint and distribution capabilities.

Financial highlights

• Gross profit increased 15.6% to $189.8 million, with gross margin improving to 27.1% from 26.2% year-over-year.

• Operating income rose 41.8% to $78.5 million, and SG&A expenses increased to $111.3 million, mainly due to acquisitions and higher variable compensation.

• Cash and cash equivalents reached $605.3 million at quarter-end, with operating cash flow of $75.3 million.

• $50 million was used for share repurchases during the quarter, and the repurchase program was increased to $150 million.

• Manufacturing backlog decreased to $302.5 million from $404.8 million a year ago due to lower orders and higher production rates.

Outlook and guidance

• Management expects continued demand for affordable housing, supported by demographic trends and market share gains, but anticipates a mid-single digit sequential revenue decline due to hurricane disruptions and typical winter seasonality.

• The impact of the recently enacted OBBBA tax law is under assessment and could be material.

• Order rates are softening ahead of the presidential election, with backlog expected to moderate before rebounding post-election.

• Gross margins expected to fluctuate due to product mix; purchase accounting headwinds now immaterial.