This article first appeared on GuruFocus .
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Homebuilding Revenue:$397.7 million.
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Homes Closed:757 homes at an average price of $525,000.
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Homebuilding Gross Margin:15.6%.
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SG&A Expenses:$64 million, approximately $4 million below last year.
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Adjusted EBITDA:$2.6 million.
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Sales Pace:2.1 sales per community per month.
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Spec Sales Mix:57%, down from 61% in the first quarter.
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Average Active Community Count:167, representing 3% year-over-year growth.
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Book Value Per Share:Nearly $42 using weighted average shares, nearly $43 using period end shares.
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Total Liquidity:Approximately $400 million, including $116 million of unrestricted cash and $285 million of revolver availability.
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Revolver Expansion:Increased by $160 million to $525 million, extended maturity to March 2030.
Release Date: April 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Beazer Homes USA Inc ( NYSE:BZH ) achieved a sales pace of over two per community per month, which was a significant improvement.
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The company increased its liquidity by upsizing its revolver and buying back more than 1 million shares at about 60% of book value.
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The shift towards more to-be-built sales, which reached 43% of gross sales, supports margin expansion opportunities.
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Average sales prices (ASP) continue to rise, with an ASP in backlog over $580,000, indicating a positive trend.
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The company has a strong balance sheet with approximately $400 million of total liquidity and no debt maturities until October 2027.
Negative Points
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Higher mortgage rates and surging energy costs have contributed to a drop in consumer sentiment, impacting sales pace.
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The company has become more cautious about achieving full-year EBITDA growth due to macroeconomic headwinds.
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Sales pace in March and April did not see the usual seasonal increase, leading to a more cautious outlook.
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The cost of mortgage rate buy-downs has increased, posing a headwind to margin improvements.
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The company is not providing full-year EBITDA guidance due to uncertainties in the sales environment.
Q & A Highlights
Q: Could you tell us what your targeted share of to-be-built sales is in the long run? Can you expect this 43% to climb higher over the coming quarters? A: Allan Merrill, Chairman and CEO, stated that the long-term goal is for a majority of homes sold to be to-be-built, similar to pre-pandemic levels. While this won't happen in the next few quarters, they aim for steady progress. The share was in the 30s a year ago and is now at 43%, the highest since early 2024.
Q: What has the share of to-be-built sales been trending over the past four quarters? A: Allan Merrill noted that the share was in the 30s a year ago and has increased to 43%, marking the highest level since early 2024. This represents an increase of over 10 percentage points year-over-year.
Q: How did sales in March and April compare with normal seasonality? A: Allan Merrill explained that March was fine but not great, with January being normal and February slightly up. However, March did not see the usual sequential increase in traffic and leads from February, which has made them more cautious about the upcoming months. April has been similar to March.
Q: Can you provide more detail on the EBITDA guidance for Q3 and the full year? A: David Goldberg, CFO, mentioned that they are not providing full-year EBITDA guidance. The previous quarter's guidance aimed to show a path to year-over-year EBITDA growth, but a tougher sales environment has made this more challenging. The land sale guidance remains at $150 million, but lower sales paces in Q3 and Q4 impact EBITDA.
Q: How are you ensuring fair value for your homes in the market, and how is consumer adoption of your energy-efficient homes? A: Allan Merrill highlighted that higher energy costs have increased consumer awareness, benefiting Beazer Homes. They emphasize the purchasing power created by energy savings, explaining that saving $100-$200 a month in utility bills significantly impacts affordability. The focus is on simplifying the message to consumers about the benefits of energy efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
