Champion Homes, formerly known as Skyline Champion Corporation, announced financial results for its second quarter ended Sept. 28.
“I am pleased to report that Champion Homes delivered another strong quarter, generating healthy margins and cash flow,” said Mark Yost, president and chief executive officer of Champion Homes. “Our continued focus on our digital direct-to-consumer strategy, combined with our retail footprint expansion and strong consumer demand for attainable housing, positioned us to achieve significant growth in home sales compared to last year. Our talented teams have enabled us to advance our strategic initiatives and enhance our capacity to deliver value to our customers and shareholders.”
Second Quarter Fiscal 2025 Highlights (compared to Second Quarter Fiscal 2024)
- Net sales increased 32.9% to $616.9 million
- U.S. homes sold increased 31.3% to 6,357
- Total backlog increased 5.6% to $427 million from the sequential first quarter
- Average selling price (ASP) per U.S. home sold increased 4.5% to $92,400
- Gross profit margin expanded by 190 basis points to 27.0%
- Net income increased by 19.8% to $54.7 million
- Earnings per diluted share (EPS) increased 19.0% to $0.94
- Adjusted EBITDA increased 26.2% to $74.2 million
- Adjusted EBITDA margin contracted by 60 basis points to 12.0%
- Net cash generated by operating activities of $59.8 million during the quarter
- Repurchased $20.0 million of shares under the share repurchase program
Second Quarter Fiscal 2025 Results
Net sales for the second quarter fiscal 2025 increased 32.9% to $616.9 million compared to the prior-year period. The number of U.S. homes sold in the second quarter fiscal 2025 increased 31.3% to 6,357 driven by sales of $148.0 million from the Regional Homes acquisition and healthy demand in the community sales channel. The ASP per U.S. home sold increased 4.5% to $92,400 due to the higher mix of retail units sold during the quarter. The number of Canadian factory-built homes sold in the quarter decreased to 179 homes compared to 232 homes in the prior-year period due to softening demand in certain markets.
Gross profit increased by 42.8% to $166.3 million in the second quarter fiscal 2025 compared to the prior-year period. Gross profit margin was 27.0% of net sales, a 190-basis point expansion compared to 25.1% in the second quarter fiscal 2024. Gross margin expansion reflects higher ASPs on new home sales, increased captive retail sales, lower forest product costs, and higher capacity utilization when compared to the prior-year period.
Selling, general and administrative expenses (SG&A) in the second quarter fiscal 2025 increased to $99.7 million from $64.5 million in the same period last year. SG&A during the quarter increased due to the Regional Homes acquisition and higher variable compensation. SG&A as a percentage of net sales was 16.2%, compared to 13.9% in the prior year period.
Net income increased by 19.8% to $54.7 million for the second quarter fiscal 2025 compared to the prior-year period. The increase in net income was driven by higher gross margin as a percentage of sales, partially offset by higher SG&A expenses.
Adjusted EBITDA for the second quarter fiscal 2025 increased by 26.2% to $74.2 million compared to the second quarter fiscal 2024. Adjusted EBITDA margin for the quarter was 12.0%, compared to 12.7% in the prior-year period.
As of Sept. 28, Champion Homes had $570.2 million of cash and cash equivalents, an increase of $21.3 million in the current quarter. The company repurchased and retired $20 million of its common stock during the second quarter under the previously announced repurchase program. On Oct. 28, the board of directors refreshed the share repurchase authorization to provide for $100 million of potential future repurchases.
