Champion Homes (SKY) Q3 2026 earnings summary

Executive summary

• Net sales increased 1.8% year-over-year to $656.6 million in Q3, driven by higher average selling prices despite lower unit volumes in the U.S. and modest growth in Canada.

• Net income attributable to the company fell 11.7% to $54.3 million, primarily due to lower gross margins and higher SG&A expenses.

• Adjusted EBITDA dropped 10.2% to $74.8 million, with margin down 150 basis points to 11.4%.

• The company completed the acquisition of Iseman Homes, enhancing its retail footprint and contributing to higher SG&A expenses.

• Leadership changes included the appointment of Tawn Kelley as Chair of the Board and continued integration of Regional Homes.

Financial highlights

• Gross profit decreased 4.9% to $172.2 million, with gross margin compressing by 190 basis points to 26.2% due to higher material costs and lower sales volume.

• SG&A expenses rose to $109.7 million, mainly from the Iseman Homes acquisition; SG&A as a percentage of sales remained flat at 16.7%.

• Operating income fell 14.2% to $62.5 million.

• Cash and cash equivalents increased to $659.8 million at quarter-end.

• Net cash from operating activities was $100.0 million for the quarter.

Outlook and guidance

• Q4 revenue expected to be up low single digits year-over-year, with gross margin in the 25%-26% range.

• Management remains focused on operational execution, digital and retail strategies, and product differentiation to drive future growth.

• Cautious consumer sentiment, seasonally lower winter period, and potential weather disruptions factored into guidance.

• Manufacturing backlog decreased to $266.0 million from $312.6 million year-over-year, as production outpaced new orders.

• Management anticipates sufficient liquidity and compliance with debt covenants for the next year and beyond.