Skyline Champion Corporation (NYSE:SKY) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $2.5 billion, a 23% increase year-over-year driven by higher demand across all channels, including the Regional Homes acquisition.
Fourth Quarter Net Sales $594 million, an 11% increase year-over-year, supported by healthy demand across retail and community channels.
Homes Sold (Q4) 6,171 units, a 6% increase year-over-year, reflecting increased demand.
Average Selling Price (U.S. Homes) $94,300, a 5% increase year-over-year due to product mix and higher sales through company-owned retail centers.
Gross Profit (Q4) $152 million, a 55% increase year-over-year, primarily due to the absence of a prior year product liability reserve and higher average selling prices.
Gross Margin (Q4) 25.5%, expanded by 740 basis points year-over-year, mainly due to the absence of a prior year product liability reserve.
SG&A Expenses (Q4) $110 million, an increase of $20 million year-over-year, attributed to higher sales volumes and increased marketing spend.
Net Income (Q4) $36 million, an increase of $33 million year-over-year, driven by the absence of a prior year product liability reserve.
EPS (Q4) $0.63, compared to $0.05 in the prior year, reflecting improved net income.
Operating Cash Flow (Q4) $46 million, compared to $4 million in the prior year, indicating improved cash generation.
Cash and Cash Equivalents $610 million as of March 29, 2025, reflecting strong cash position.
Long-term Borrowings $25 million with no maturities until July 2026.
Share Repurchases $20 million in share repurchases during the quarter, reflecting confidence in cash generation.
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Operating Highlights
New Product Launches: Showcased models at the International Builder Show focused on providing builders with relevant and affordable turnkey homes.
Product Lineup Response: Received a great response to the Biloxi Show product lineup, reflecting the strength of the Champion Homes family of brands.
Market Expansion: Announced acquisition of Iseman Homes, including its 10 retail sales centers in the Plains region of the U.S., with annualized revenues of approximately $40 million.
Retail Capabilities Expansion: Investing in new product services for channel partners and expanding retail capabilities.
Operational Efficiencies: Consolidating two Canadian factories into one to improve operating efficiencies and reduce overhead costs.
Production Location Adjustment: Idled one production location in Florida due to slow recovery from 2024 hurricanes, leveraging nearby facilities.
Strategic Focus: Maintaining a nimble approach while advancing strategic priorities amid market uncertainty.
Consumer Trends Shift: Noted a shift in consumer trends towards smaller floor plans with fewer features and options.
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Risk or Challenges
Earnings Miss: Skyline Champion Corporation reported an EPS of $0.65, missing expectations of $0.75.
Market Uncertainty: The company is navigating an unpredictable environment with tariffs and inflation affecting consumer sentiment.
Production Challenges: Idling of a production location in Florida due to slow recovery from 2024 hurricanes and consolidation of Canadian factories to improve efficiencies.
Consumer Trends: Shift in consumer preferences towards smaller floor plans with fewer features, impacting demand and pricing.
Economic Factors: Near-term revenue expectations for Q1 2026 are projected to be up low single digits, indicating a less predictable demand compared to previous years.
Supply Chain Issues: Higher material input costs and lower capacity utilization affecting gross margins.
Regulatory Environment: Ongoing discussions with HUD regarding regulatory changes that could impact the manufactured housing market.
Geographic Variability: Mixed demand outlook in the community channel depending on geographic location and expansion pace.
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Guidance & Outlook
Homes Sold: Provided over 26,000 homes to customers and families across the U.S. and Canada, representing a 19% increase year-over-year.
Revenue Growth: Achieved revenue growth of 23%, resulting in fiscal year 2025 sales of $2.5 billion.
Acquisition of Iseman Homes: Announced acquisition of Iseman Homes to expand retail capabilities and footprint, with annualized revenues of approximately $40 million.
Community Channel Focus: Continued investment in community channel to support partners with timely and relevant products.
Champion Financing: Joint venture with Triad Financial Services performing well, providing optimal monthly payment options for consumers.
Production Adjustments: Idled one production location in Florida and consolidated two Canadian factories to improve efficiencies.
Q1 2026 Revenue Expectations: Anticipate Q1 revenue to be up low single digits compared to the same period last year.
Gross Margin Outlook: Expect near-term gross margin in the 25% to 26% range.
Backlog: Backlog at the end of the year was $343 million, up 9% from the end of last year.
Average Backlog Lead Time: Ended the quarter at eight weeks, within the target range of four to 12 weeks.
Operating Cash Flows: Generated $46 million of operating cash flows for the quarter.
Share Repurchase Authority: Board refreshed $100 million share repurchase authority, reflecting confidence in cash generation.
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Shareholder Return Plan
Share Repurchase Program: The company returned capital to shareholders through $20 million in share repurchases during the quarter. Additionally, the Board refreshed the $100 million share repurchase authority, reflecting confidence in the company's continued strong cash generation.
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Key Q&A
Q:Can you elaborate on the discussions with customers in both retail and community markets and the cadence of order rates into April and May?
A:We’re seeing digital leads up across many regions, but in-store traffic is mixed by region. There are more serious buyers in the market, which is why we reflected low single-digit growth for Q1.
Q:What about the community side?
A:We were up year-over-year in the community segment, but it's mixed for some projects. We're pleased with the growth, but cautious due to consumer dynamics.
Q:Can you break down the increase in SG&A despite a decline in revenue?
A:We won't break out the components individually, but the increase is partly due to cyclical industry shows in Q4.
Q:What are your thoughts on being more aggressive with share buybacks?
A:We have a balanced capital allocation profile and will be opportunistic based on our overall strategy.
Q:Was there any inability to ship homes from retail to end customers due to weather conditions?
A:Yes, the Texas market was slower than usual, impacting our ability to ship.
Q:What gives you hope for more meaningful share gains in manufactured housing?
A:We have a commitment to captive retail, regulatory changes, and increased consumer awareness through marketing.
Q:Can you clarify the change in gross margin guidance?
A:The lower guidance is short-term due to softening consumer confidence and inflation in material costs, but we expect long-term margins to be in the 26%-27% range.
Q:What impact would the removal of the permanent chassis requirement have on costs?
A:It would allow for better product designs and potentially lower transport costs, but we need to balance that with maintaining margins.
Q:What role are input costs playing in near-term margin expectations?
A:We have a mix of spot and contract rates for wood products, and we're seeing increases in other component costs.
Q:How is the chassis requirement impacting discussions with builders?
A:It's a key opportunity for developers looking for single-family, slab-on-grade looks, which could help with zoning.
Q:What markets are seeing price competition?
A:We're seeing price competition in the West, with a shift towards smaller homes.
Q:Have you heard anything from FEMA regarding home orders?
A:No orders have been received yet, but we are prepared for when they are ready.
Q:What is the current state of credit availability for chattel?
A:Credit availability is stable, but rates are still higher than 30-year fixed for well-qualified buyers.
Q:What is the level of discussions with other regional dealer groups regarding M&A?
A:We are focused on execution and integration with Iseman, but our strategy reflects where we want to allocate capital.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the breakdown of SG&A components, stating they won't break out the components individually. Additionally, there was a lack of clarity on the specific impacts of tariffs on margins, as they did not quantify the potential effects.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Builder Show
CEO behalf
Champion miss
ECN Capital
Florida
HUD Secretary
Home region
Iseman
Plains region
SGA
Transcript Skyline
adjustment
agreement
build home
community channel
expectation name
factory housing
family brand
feature option
focus priority
inflation
investment
liability reserve
market uncertainty
miss expectation
period decrease
product liability
result President
review
site build
step
strength
tariff
technology
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
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