Financial Performance - Net sales for the three months ended December 27, 2025, were $656.6 million, an increase from $644.9 million for the same period in 2024, representing a growth of 1.1%[10] - Gross profit for the nine months ended December 27, 2025, was $550.0 million, compared to $511.6 million for the same period in 2024, reflecting a year-over-year increase of 7.5%[10] - Operating income for the three months ended December 27, 2025, was $62.5 million, down from $72.8 million in the prior year, indicating a decrease of 14.5%[10] - Net income attributable to Champion Homes, Inc. for the nine months ended December 27, 2025, was $177.2 million, compared to $162.1 million for the same period in 2024, an increase of 9.3%[10] - For the three months ended December 27, 2025, the net income was $56.004 million, compared to $62.827 million for the same period in 2024, reflecting a decrease of approximately 10.8%[18] - Net income attributable to Champion Homes, Inc. for the three months ended December 27, 2025, was $54.3 million, a decrease of $7.2 million, or 11.7%[118] - Net income attributable to non-controlling interest increased by $0.4 million, or 29.3%, to $1.7 million for the three months ended December 27, 2025[117] - Net income before income taxes of $230,513 for the nine months ended December 27, 2025, compared to $211,214 for the same period in the previous year, reflecting an increase of approximately 9.1%[73] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $659.8 million, up from $610.3 million at the beginning of the period, marking an increase of 8.1%[15] - The company reported a net cash provided by operating activities of $251.2 million for the nine months ended December 27, 2025, compared to $194.9 million for the same period in 2024, an increase of 28.8%[15] - Cash used in investing activities rose to $45.3 million for the nine months ended December 27, 2025, compared to $35.0 million in the same period of 2024, primarily due to the acquisition of Iseman Homes[150] - Cash used in financing activities was $162.1 million for the nine months ended December 27, 2025, significantly higher than $65.9 million in the prior year, mainly due to increased stock repurchases totaling $150.0 million[151] - The company has a $200.0 million revolving credit facility, with $172.5 million available for borrowing as of December 27, 2025[146] Assets and Liabilities - Total assets as of December 27, 2025, were $2.114 billion, slightly up from $2.110 billion as of March 29, 2025[7] - Total stockholders' equity increased to $1.592 billion as of December 27, 2025, compared to $1.544 billion as of March 29, 2025, reflecting a growth of 3.1%[7] - The company incurred total current liabilities of $411.6 million as of December 27, 2025, down from $451.3 million as of March 29, 2025, a decrease of 8.8%[7] - As of December 27, 2025, total inventories, net amounted to $341.308 million, down from $360.629 million on March 29, 2025, with reserves for obsolete inventory at $11.3 million[39] - Long-term debt decreased to $23.816 million as of December 27, 2025, from $24.773 million on March 29, 2025[54] Operational Highlights - The company operated 42 manufacturing facilities in the U.S. and 4 in Canada as of December 27, 2025, maintaining a strong operational footprint in North America[21] - The company’s retail operations included 83 sales centers across the U.S., contributing to its distribution network for manufactured homes[21] - The Company acquired Iseman Homes, Inc. for a total purchase consideration of $26.8 million, which included net cash paid of $24.6 million and contingent consideration of $0.2 million[35] - The Company acquired Regional Homes in October 2023, enhancing its manufacturing and retail distribution in the Southeast U.S.[90] - The company continues to focus on operational improvements and strategic expansions to meet the demand for affordable housing solutions[89] Revenue and Sales Performance - For the nine months ended December 27, 2025, total revenue was $2.04 billion, up from $1.89 billion in the same period in 2024, indicating a growth of about 8.0%[60] - U.S. manufacturing and retail net sales increased by $135.9 million, or 7.6%, driven by a 2.5% increase in homes sold and a 5.0% increase in average selling price[121] - Canadian manufacturing net sales increased by $13.3 million, or 19.4%, primarily due to a 19.1% increase in homes sold[122] - The Company's manufacturing backlog decreased to $266.0 million as of December 27, 2025, down from $312.6 million as of December 28, 2024, due to production rates exceeding order rates[96] Expenses and Profitability - Selling, general, and administrative expenses for the three months ended December 27, 2025, were $109.7 million, an increase of $1.5 million, or 1.4%, compared to the same period in the prior fiscal year[108] - Selling, general, and administrative expenses increased by $17.5 million, or 5.5%, totaling $334.2 million for the nine months ended December 27, 2025[129] - Gross profit for the three months ended December 27, 2025, was $172.2 million, a decrease of $8.8 million, or 4.9%, compared to $181.0 million in the same period of 2024[103] - Gross profit as a percentage of net sales was 26.2% for the three months ended December 27, 2025, down from 28.1% in the prior year[104] - Total gross profit for the nine months ended December 27, 2025, was $549.9 million, an increase of $38.4 million, or 7.5%, compared to the prior year[124] - Gross profit as a percentage of net sales was 26.9% for the nine months ended December 27, 2025, compared to 27.1% in the prior year[125] Tax and Compliance - The effective tax rate for the three months ended December 27, 2025, was 18.3%, down from 21.1% for the same period in 2024[62] - Income tax expense for the three months ended December 27, 2025, was $12.4 million, a decrease of $4.3 million, or 25.9%, with an effective tax rate of 18.3%[114] - Income tax expense for the nine months ended December 27, 2025, was $48.6 million, representing an effective tax rate of 21.1%[136] - The Company had no unrecognized tax benefits as of December 27, 2025[65] - The Company was in compliance with all covenants of the Amended Credit Agreement as of December 27, 2025[56] Investments and Acquisitions - The investment in ECN Capital Corporation totaled $70.2 million as of December 27, 2025, with the Company owning approximately 19.9% of the voting shares[48] - The Company made an equity investment in ECN to facilitate the creation of a captive finance company, which is expected to improve market share[92] - The company established a loss reserve of $1.7 million for repurchase agreements as of December 27, 2025, with a contingent repurchase obligation estimated at $229.3 million[81] Challenges and Risks - The company incurred plant closure costs of $6.5 million related to idling production at the Bartow, Florida facility and exiting the lease of the Kelowna, British Columbia facility during the nine months ended December 27, 2025[26] - Management identified a material weakness in internal controls related to the retail operations of Regional Homes, acquired in October 2023, which could lead to material misstatements in financial statements[159] - The company is implementing measures to remediate the identified material weakness, including improving accounting systems and increasing corporate oversight[161] - The company anticipates compliance with its debt covenants and projects sufficient cash availability to support operations for the next year and beyond[147]

Financial Data and Key Metrics Changes - Net sales increased by 2% year-over-year to $657 million, while total homes sold decreased by 2% to 6,485 homes [12][18] - Average selling price (ASP) per U.S. home sold increased by 5% to $99,300 due to changes in product mix and increased prices [19][22] - Consolidated gross profit decreased by 5% to $172 million, with a gross margin of 26.2%, down 190 basis points year-over-year [21][22] - Net income attributable to Champion Homes decreased by 12% year-over-year to $54 million, or earnings of $0.97 per diluted share [22] - Adjusted EBITDA for the quarter was $75 million, a decrease of 10% compared to the prior year [23] Business Line Data and Key Metrics Changes - Sales to independent retail channels decreased year-over-year, while captive retail sales increased year-over-year, representing 38% of consolidated sales in Q3 versus 35% last year [13][14] - Community channel sales were down year-over-year, but positive feedback was received for new products showcased at the Louisville Home Show [14][15] Market Data and Key Metrics Changes - Manufacturing backlogs decreased sequentially by 15% to $266 million, with average backlog lead time ending at 7 weeks [11][12] - U.S. factory-built housing revenue increased by 2% year-over-year, while Canadian revenue was $26 million, representing a 3% increase in homes sold [20] Company Strategy and Development Direction - The company aims to increase awareness and demand for its products, with a focus on building trust with consumers [6][7] - Product innovation remains a strategic priority, with new home plans launched at various price points to target a broader segment of buyers [8] - The company is actively monitoring legislative developments that support the expansion of off-site built homes, indicating a strong bipartisan focus on addressing the housing crisis [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging macro and consumer environment, with expectations for revenue growth in Q4 [11][25] - The company anticipates cautious consumer sentiment and a seasonally lower winter selling period, but remains focused on strategic growth priorities [25][26] Other Important Information - The company has a strong cash position with $660 million in cash and cash equivalents, and plans to continue returning capital to shareholders through share repurchases [23] - The sale of Triad's parent company is progressing well, expected to close in the first half of the year, which will provide additional capital [16] Q&A Session Summary Question: Can you provide more color on the geographic environment and weather-related impacts? - Management noted that there were no unusual geographic trends and that weather-related delays impacted production days, but they are working to make up for lost time [30] Question: What are the dynamics around pricing and ASPs? - Management confirmed that both pricing and product mix contributed to higher ASPs year-over-year [31][32] Question: How do you view the community channel's outlook? - Management indicated that they are working closely with community channel partners and received positive feedback on new products, suggesting potential recovery in the community channel [41][42] Question: Can you elaborate on the margin expectations for the next quarter? - Management highlighted that gross margin variability is expected, with a focus on managing inventory and preparing for the spring selling season [46][48] Question: What is the early read on the spring selling season? - Management reported positive order growth and consumer engagement, indicating a strong outlook for the spring selling season [56][58]

Financial Data and Key Metrics Changes - Net sales increased by 2% year-over-year to $657 million, while total homes sold decreased by 2% to 6,485 homes [12][18] - Average selling price (ASP) per U.S. home sold increased by 5% to $99,300 due to changes in product mix and increased prices [19][22] - Consolidated gross profit decreased by 5% to $172 million, with a gross margin of 26.2%, down 190 basis points year-over-year [21][22] - Net income attributable to Champion Homes decreased by 12% year-over-year to $54 million, or earnings of $0.97 per diluted share [22] - Adjusted EBITDA for the quarter was $75 million, a decrease of 10% compared to the prior year [23] Business Line Data and Key Metrics Changes - Sales to the independent retail channel decreased year-over-year, while captive retail sales increased year-over-year, representing 38% of consolidated sales in Q3 versus 35% last year [13][14] - Community channel sales were down year-over-year, but positive feedback was received for new products showcased at the Louisville Home Show [14][15] - Sales through the builder developer channel grew in the third quarter compared to the same period last year [14] Market Data and Key Metrics Changes - U.S. factory-built housing revenue increased by 2% year-over-year, while Canadian revenue was $26 million, representing a 3% increase in the number of homes sold [20] - Manufacturing capacity utilization was 59%, compared to 60% in the second quarter [20] Company Strategy and Development Direction - The company aims to increase awareness and demand for its products, with a focus on building trust with consumers [6][7] - Product innovation remains a strategic priority, with new home plans launched at various price points to expand the addressable market [8] - The company is actively monitoring legislative developments that support the expansion of off-site built homes, indicating a strong bipartisan focus on solving the housing crisis [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the fourth quarter, expecting revenue to be up low single digits versus the prior year, with gross margin anticipated to be in the 25%-26% range [25][26] - The company is focused on executing its strategic initiatives while managing SG&A prudently [25] - Management highlighted the importance of engaging a broader set of consumers through product strategy and legislative support for affordable housing [34][35] Other Important Information - The company has a strong cash position with $660 million in cash and cash equivalents and generated $100 million in operating cash flows during the third quarter [23] - The board refreshed its $150 million share repurchase authority, reflecting confidence in continued strong cash generation [23] Q&A Session Summary Question: Can you provide more color on the geographic environment and weather-related impacts? - Management noted that there were no unusual geographic trends and that weather-related delays impacted production days, but they are working to make up for lost time [30] Question: What are the dynamics around higher ASPs in the captive retail channel? - Management confirmed that the increase in ASPs was due to both pricing and product mix, particularly more multi-section homes [32] Question: How do you view the role of factory-built homes in addressing housing affordability? - Management emphasized the critical role of factory-built homes in providing affordable housing solutions, especially in light of supportive legislation [34] Question: Can you comment on the community channel's performance and outlook? - Management indicated that they are closely working with community channel partners and received positive feedback on new products, suggesting potential recovery as the spring selling season approaches [42][43] Question: What are the expectations for gross margin in the upcoming quarter? - Management expects gross margin to experience slight incremental pressure but remains focused on driving value to consumers [66][68] Question: How is the company managing inventory in the captive retail channel? - Management clarified that the inventory build in captive retail is a seasonal dynamic in preparation for the spring selling season, not a slowdown in sales [50][51] Question: What is the company's stance on recent housing affordability initiatives from the administration? - Management expressed alignment with the administration's focus on affordable housing and is positioned to capitalize on opportunities arising from such initiatives [76][77]

Financial Data and Key Metrics Changes - Net sales increased by 2% year-over-year to $657 million, while net income attributable to Champion Homes decreased by 12% year-over-year to $54 million, or earnings of $0.97 per diluted share [18][21] - The average selling price (ASP) per U.S. home sold increased by 5% to $99,300, driven by changes in product mix and increased prices on new homes sold through company-owned retail sales centers [19][21] - Consolidated gross profit decreased by 5% to $172 million, with a gross margin of 26.2%, down 190 basis points compared to the prior year [20][21] Business Line Data and Key Metrics Changes - Sales to the independent retail channel decreased year-over-year, while captive retail sales increased year-over-year, representing 38% of consolidated sales in Q3 versus 35% last year [12][21] - Community channel sales were down year-over-year, but positive feedback was received regarding new products showcased at the Louisville Home Show [13][19] - Sales through the builder developer channel grew in the third quarter compared to the same period last year [14] Market Data and Key Metrics Changes - Manufacturing backlogs decreased sequentially by 15% to $266 million, with average backlog lead time ending the quarter at 7 weeks [10][11] - Canadian revenue during the quarter was $26 million, representing a 3% increase in the number of homes sold versus the prior year, while the average home selling price in Canada decreased by 2% to $120,000 [19][20] Company Strategy and Development Direction - The company aims to increase awareness and demand for its products, with a focus on building trust with consumers and product innovation [6][7] - Legislative efforts are being monitored closely, with a strong bipartisan focus on solving the housing crisis, which is seen as a foundation for future growth [8][9] - The company is committed to expanding its product offerings to attract a broader segment of new buyers and address affordability issues in the housing market [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the fourth quarter, expecting revenue to be up low single digits versus the prior year, with gross margin anticipated to be in the 25%-26% range [24][25] - The company is focused on executing its strategic initiatives while managing SG&A prudently, despite challenges in the macroeconomic environment [24][25] - Management highlighted the importance of engaging with consumers and adapting to market conditions as part of their strategy moving forward [40][84] Other Important Information - The company announced a $50 million share repurchase during the quarter and refreshed its $150 million share repurchase authority, reflecting confidence in its cash generation capabilities [22][23] - The sale of Triad's parent company, ECN Capital, is progressing well, with expected proceeds of approximately CAD 189 million to Champion [16] Q&A Session Summary Question: Can you provide more color on the geographic environment and weather-related impacts? - Management noted that there were no unusual geographic trends and that weather-related delays impacted production days, but they are working to make up for lost time [28][29] Question: Was the increase in ASPs at captive retail due to mix or pricing? - Management confirmed that both pricing and mix contributed to the higher ASPs year-over-year [30][31] Question: What is the outlook for the community channel? - Management indicated that they are working closely with community channel partners and are optimistic about new product feedback as they approach the spring selling season [41][43] Question: Can you elaborate on the margin expectations for the next quarter? - Management highlighted that gross margin variability is expected, with a focus on product mix and channel dynamics impacting margins [46][48] Question: What are the expectations for backlog and revenue guidance? - Management expects a continuation of the order flow seen in Q3, with a positive outlook for backlog and revenue in Q4 [67][68]

Financial Performance - Net sales for Q3 fiscal 2026 increased by 1.8% to $656.6 million compared to the prior-year period[4] - Net sales for the three months ended December 27, 2025, were $656.614 million, an increase from $644.925 million in the same period last year, representing a growth of 1.07%[28] - Gross profit for the nine months ended December 27, 2025, was $549.955 million, compared to $511.570 million for the same period in 2024, reflecting a year-over-year increase of 7.48%[28] - Operating income for the three months ended December 27, 2025, was $62.466 million, down from $72.808 million in the prior year, indicating a decrease of 14.2%[28] - Net income decreased by 11.7% to $54.3 million, primarily driven by lower gross profit[8] - Net income attributable to Champion Homes, Inc. for the nine months ended December 27, 2025, was $177.222 million, compared to $162.065 million for the same period in 2024, marking an increase of 9.36%[34] - Adjusted EBITDA decreased by 10.2% to $74.8 million, with an adjusted EBITDA margin of 11.4%[8] - Adjusted EBITDA for the nine months ended December 27, 2025, was $252.307 million, up from $232.470 million in the same period last year, showing an increase of 8.53%[32] Sales and Market Activity - The number of U.S. homes sold decreased by 2.6% to 6,270 due to reduced sales to the community REIT channel[4] - Average selling price (ASP) per U.S. home sold increased by 4.6% to $99,300 driven by changes in product mix and higher prices[4] - Backlog decreased by 15.1% to $266.0 million from the sequential second quarter of fiscal 2026[5] Cash and Assets - Cash and cash equivalents increased by $41.0 million to $659.8 million as of December 27, 2025[9] - Cash and cash equivalents at the end of the period were $659.758 million, an increase from $581.753 million at the end of the same period last year, representing a growth of 13.39%[30] - Total current assets increased to $1.117 billion as of December 27, 2025, compared to $1.086 billion at the end of the previous year, reflecting a growth of 2.85%[26] Liabilities and Stock Activity - Total liabilities decreased to $522.089 million as of December 27, 2025, down from $565.970 million in the previous year, indicating a reduction of 7.77%[26] - The company repurchased $50.0 million of its common stock under the share repurchase program[9] - The company repurchased $150 million worth of common stock during the nine months ended December 27, 2025[30] - The board of directors refreshed the share repurchase authorization to provide for $150 million of potential future repurchases[9] Share Information - The average diluted shares outstanding decreased to 56.277 million for the three months ended December 27, 2025, compared to 58.021 million in the same period last year, a reduction of 3.01%[34]

Core Insights - Champion Homes reported its third quarter fiscal 2026 results, highlighting a challenging environment but strong operational execution and strategic advancements [1] Financial Performance - Net sales increased by 1.8% to $656.6 million compared to the prior year [1] - U.S. homes sold decreased by 2.6% to 6,270, attributed to reduced sales to the community REIT channel and a prior-year sales boost due to weather [1] - Average selling price (ASP) per U.S. home sold rose by 4.6% to $99,300 due to product mix changes and price increases [1] - Gross profit decreased by 4.9% to $172.2 million, with a gross profit margin of 26.2%, down 190 basis points from the previous year [1] - Net income fell by 11.7% to $54.3 million, primarily due to lower gross profit [1] - Adjusted EBITDA decreased by 10.2% to $74.8 million, with an adjusted EBITDA margin of 11.4%, down 150 basis points [1] Shareholder Actions - The company repurchased $50.0 million of shares under its share repurchase program [1] - As of December 27, 2025, Champion Homes had $659.8 million in cash and cash equivalents, an increase of $41.0 million from the previous quarter [1] - The board of directors refreshed the share repurchase authorization for potential future repurchases of up to $150 million [1] Strategic Initiatives - The company is focused on evolving its product catalog to serve various customer segments and is making progress on digital and retail strategies [1] - The appointment of Tawn Kelley as the new Chair of the Board is expected to provide insights and guidance for driving growth [1] Market Position - Champion Homes is a leading producer of factory-built housing in North America, employing approximately 9,000 people and operating 46 manufacturing facilities [2] - The company operates a factory-direct retail business with 83 locations across the U.S. and provides transportation services through Star Fleet Trucking [2]

Company Overview - Champion Homes, Inc. is a leading producer of factory-built housing in North America, employing approximately 9,000 people [4] - The company has over 70 years of homebuilding experience and operates 46 manufacturing facilities across the United States and western Canada [4] - Champion Homes offers an innovative portfolio of manufactured and modular homes, ADUs, park-models, and modular buildings for various sectors including single-family, multi-family, and hospitality [4] Business Operations - In addition to home building, Champion Homes provides construction services for the installation and setup of factory-built homes [5] - The company operates a factory-direct retail business with 82 retail locations throughout the United States [5] - Champion Homes also runs Star Fleet Trucking, which offers transportation services to the manufactured housing and other industries from multiple dispatch locations across the United States [5] Brand Portfolio - Champion Homes builds homes under several well-known brand names in the factory-built housing industry, including Champion Homes, Genesis Homes, Skyline Homes, and others in the U.S. and western Canada [6]

Industry Overview - Manufactured housing is experiencing strong structural tailwinds due to rising demand, limited supply, and predictable revenue streams, making it an attractive investment opportunity [2][3] - The affordability crisis is a significant issue, with many Americans priced out of conventional single-family homes, leading to an urgent search for affordable housing [4][5] Company Analysis Sun Communities Inc. (SUI) - Sun Communities is a leading real estate investment trust (REIT) that owns and operates manufactured housing communities, benefiting from residents who own their homes but rent the land, resulting in stable occupancy and cash flow [8][9] - The company's national footprint allows it to acquire smaller properties, enhancing operational efficiency and net operating income, particularly in high-growth Sun Belt markets [9] - SUI offers steady income with long-term growth potential, with a consensus price target of $136.69 and a dividend yield of 3.3%, which has increased by an average of 4.6% over the last three years [10] Champion Homes (SKY) - Champion Homes is one of the largest manufacturers of factory-built homes in the U.S., positioned to benefit from rising demand for affordable housing options [12] - The company can achieve operating leverage as shipments increase, translating into higher margins and earnings, supported by government initiatives for affordable housing [12][13] - Despite being perceived as expensive at 24x earnings, it remains competitive within the construction sector, especially if affordability pressures drive demand for manufactured housing [14] UMH Properties Inc. (UMH) - UMH Properties operates primarily in the Midwest and Northeast, regions facing persistent housing shortages due to zoning restrictions and limited new construction [15] - The company focuses on organic growth by filling vacant sites within existing communities, which enhances occupancy and rental revenue without significant acquisition costs [16] - UMH offers a higher dividend yield of 5.67% and has a consensus price target of $18, indicating strong upside potential, although it is smaller and more leveraged than its competitors [17][18]

Group 1 - The meeting is being held both in-person in Auckland and online for shareholders and guests [2] - Shareholders and proxies attending online can submit questions and votes during the meeting [2][3] - A process is outlined for submitting online questions, which can be done at any time during the meeting [3][4] Group 2 - Attendees are encouraged to keep questions relevant, succinct, and specific [4] - Multiple questions on the same topic may be grouped together to manage time effectively [4] - Any unanswered questions due to time constraints will be addressed via email after the meeting [4]

Core Insights - The home builders sector experienced mixed results in Q3, with revenues collectively surpassing analysts' expectations by 2.8% while guidance for the next quarter remained in line with forecasts [3] Group 1: Industry Overview - Homebuilders have traditionally leveraged economies of scale for competitive advantages, including better purchasing power and brand recognition [2] - Recent trends indicate a shift towards energy efficiency and conservation as key drivers of innovation in the industry [2] - The sector is highly cyclical, significantly influenced by macroeconomic factors such as interest rates, which affect both new and existing home sales [2] Group 2: Tri Pointe Homes (NYSE:TPH) - Tri Pointe Homes reported Q3 revenues of $854.7 million, reflecting a 25.3% year-on-year decline, yet exceeding analysts' expectations by 15% [5] - The company achieved a strong performance with 1,217 home deliveries at an average sales price of $672,000, generating $817.3 million in home sales revenue for the quarter [6] - Despite the positive earnings report, the stock price has decreased by 3.1% since the announcement, currently trading at $31.85 [7] Group 3: Competitor Performance - Champion Homes (NYSE:SKY) reported Q3 revenues of $684.4 million, an 11% increase year-on-year, outperforming analysts' expectations by 6.9% [9] - The company also demonstrated strong performance with significant beats in both EBITDA and adjusted operating income estimates [9]