Champion Homes, formerly known as Skyline Champion Corporation, announced financial results for its third quarter ended Dec. 28, 2024.
“Champion’s strong performance this quarter reflects our ability to earn new customers and deliver profitable growth across our family of brands,” said Tim Larson, president and chief executive officer of Champion Homes. “Since stepping into the role, I’ve been actively engaging with our employees, customers, partners and shareholders to solicit feedback and identify opportunities to build on our strengths and drive long-term growth. I remain confident in the effectiveness of our strategy, including the expansion of our retail and digital presence, and strategic investments supporting the growth of community owners, independent retailers and builder developers. As we respond to the evolving housing environment, we will continue to remain nimble and execute our differentiated strategy — including investing in technology and accelerating product innovation — while delivering sustained value for all our stakeholders.”
Third Quarter Fiscal 2025 Highlights (compared to Third Quarter Fiscal 2024)
- Net sales increased 15.3% to $644.9 million
- U.S. homes sold increased 14.1% to 6,437
- Backlog increased 7.6% compared to December 2023 and decreased 26.9% to $313 million from the sequential second quarter
- Average selling price (“ASP”) per U.S. home sold increased 2.8% to $94,900
- Gross profit margin expanded by 280 basis points to 28.1%
- Net income increased by 31.0% to $61.5 million
- Earnings per diluted share (“EPS”) increased 30.9% to $1.06
- Adjusted EBITDA increased 25.7% to $83.3 million
- Adjusted EBITDA margin expanded by 110 basis points to 12.9%
- Net cash generated by operating activities of $50.4 million during the quarter
- Repurchased $20.0 million of shares under the share repurchase program
Third Quarter Fiscal 2025 Results
Net sales for the third quarter fiscal 2025 increased 15.3% to $644.9 million compared to the prior-year period. The number of U.S. homes sold in the third quarter fiscal 2025 increased 14.1% to 6,437 driven by an increase in demand across all sales channels. The ASP per U.S. home sold increased 2.8% to $94,900 due to an increase in the number of units sold through company-owned retail sales centers during the quarter. The number of Canadian factory-built homes sold in the quarter decreased to 209 homes compared to 249 homes in the prior-year period due to softening demand in certain markets.
Gross profit increased by 28.1% to $181.0 million in the third quarter fiscal 2025 compared to the prior-year period. Gross profit margin was 28.1% of net sales, a 280-basis point expansion compared to 25.3% in the third quarter fiscal 2024. Gross margin expansion reflects higher ASPs on new homes sold through company-owned retail sales centers which also generated a greater percentage of total revenue in addition to lower input costs and acquisition synergy capture when compared to the prior-year period.
Selling, general and administrative expenses (SG&A) in the third quarter fiscal 2025 increased to $108.2 million from $85.1 million in the same period last year. SG&A during the quarter increased due to higher variable compensation from higher sales volumes and profitability as well as investments in people and information systems to support future growth. SG&A as a percentage of net sales was 16.8%, compared to 15.2% in the prior year period.
Net income increased by 31.0% to $61.5 million for the third quarter fiscal 2025 compared to the prior-year period. The increase in net income was driven by higher sales and gross profit partially offset by higher SG&A in the quarter.
Adjusted EBITDA for the third quarter fiscal 2025 increased by 25.7% to $83.3 million compared to the third quarter fiscal 2024. Adjusted EBITDA margin for the quarter was 12.9%, compared to 11.8% in the prior-year period.
As of Dec. 28, 2024, Champion Homes had $581.8 million of cash and cash equivalents, an increase of $11.5 million in the current quarter. The company repurchased and retired $20 million of its common stock during the third quarter under the previously announced repurchase program. On Jan. 30, the board of directors refreshed the share repurchase authorization to provide for $100 million of potential future repurchases.
