Champion Homes (NYSE:SKY) Q2 2026 Earnings Call November 05, 2025 08:00 AM ET Speaker0Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the second quarter ended September 27, 2025. Here to review our results are Tim Larson, Champion Homes President and Chief Executive Officer, and Laurie Hough, Executive Vice President, Chief Financial Officer, and Treasurer. Yesterday, after the market closed, we issued our earnings release. As a remin ...

Core Viewpoint - Hongji Group (02535.HK) reported a 3.6% decrease in revenue to approximately HKD 166 million for the six months ending June 30, 2025, with a profit attributable to shareholders of about HKD 10.8 million, down from HKD 13.4 million for the same period in 2024 [1] Financial Performance - Revenue decreased by 3.6% to approximately HKD 166 million [1] - Profit attributable to shareholders was approximately HKD 10.8 million, compared to HKD 13.4 million for the same period in 2024 [1] - Basic earnings per share were approximately HKD 0.54, down from HKD 0.81 for the same period in 2024 [1] - The board decided not to recommend an interim dividend for the six months ending June 30, 2025 [1] Business Strategy - The company remains focused on its core business strengths while exploring new opportunities [1] - Recognizing the growth potential in the solar energy sector, the company has established a subsidiary to enter the solar panel market [1] - The company aims to leverage opportunities in the sustainable energy field and build a business presence in this industry [1] - From the second quarter of 2025, the company has identified a growing demand for prefabricated housing, structures, and materials [1] - After multiple discussions with industry participants, the company is considering expanding into the prefabricated housing and building materials business to provide customizable eco-friendly prefabricated solutions for residential, commercial, and industrial sectors [1]

Financial Data and Key Metrics Changes - In fiscal year 2025, the company sold over 26,000 homes, a 19% increase year over year, with revenue growth of 23%, totaling $2.5 billion [5] - Fourth quarter net sales increased 11% to $594 million, with homes sold increasing 6% to 6,171 units [9][17] - Consolidated gross profit rose 55% to $152 million, with gross margin expanding by 740 basis points to 25.6% [20] - Net income for the fourth quarter increased by $33 million to $36 million, or earnings of $0.63 per diluted share [22] Business Line Data and Key Metrics Changes - U.S. factory-built housing revenue increased by 10%, with homes sold rising 5% to 5,941 homes [18] - Canadian revenue was $25 million, representing a 22% increase in homes sold, although the average selling price decreased by 9% to $110,600 [20] - Sales to independent retail channels and captive retail stores both increased compared to the prior year [10] Market Data and Key Metrics Changes - The backlog at the end of the year was $343 million, up 9% from the previous year and 10% sequentially [9] - Average backlog lead time was eight weeks, within the target range of four to twelve weeks [9] Company Strategy and Development Direction - The company is focused on expanding retail capabilities and investing in new products and services, including the acquisition of Eisman Homes [6][15] - The strategy includes navigating market uncertainties while maintaining a focus on customer-centric growth and operational efficiency [8][26] - The company aims to leverage regulatory changes to enhance market opportunities for manufactured housing [46] Management's Comments on Operating Environment and Future Outlook - Management noted that demand has been less predictable compared to a normal spring selling season, with a shift towards smaller floor plans [13] - The company anticipates low single-digit revenue growth for Q1 of fiscal 2026, reflecting mixed consumer sentiment and demand [12][25] - Management remains confident in the long-term outlook, emphasizing the need for affordable housing across the U.S. and Canada [25] Other Important Information - The effective tax rate for the quarter was 17.1%, down from 19.2% in the prior year, primarily due to increased tax credits [21] - The company returned $20 million to shareholders through share repurchases and refreshed its $100 million share repurchase authority [24] Q&A Session Summary Question: Can you elaborate on discussions with customers in retail and community markets? - Management noted mixed in-store traffic but an increase in digital leads, indicating more serious buyers in the market [28][29] Question: What is the impact of SG&A increases despite revenue decline? - Management indicated that the increase was due to cyclical industry shows and would not recur as strongly in the first half of the fiscal year [35] Question: How is the company approaching share repurchases? - Management expressed a balanced capital allocation strategy and indicated they would be opportunistic based on share performance [38][40] Question: Were there any shipping issues due to weather conditions? - Management acknowledged slower markets in Texas and parts of the South, impacting shipping and order fulfillment [42] Question: What are the dynamics of manufactured housing and potential share gains? - Management highlighted the importance of customer experience and regulatory changes that could enhance market opportunities [46][48] Question: What is the outlook for gross margins? - Management expects near-term gross margins in the 25% to 26% range but anticipates structural margins to return to 26% to 27% in the long term [56] Question: How will the removal of the permanent chassis requirement impact costs? - Management indicated it would allow for more flexible designs and potentially lower transport costs, enhancing product offerings [59][60] Question: What is the status of FEMA orders? - Management confirmed no orders from FEMA yet but is prepared for future opportunities [97] Question: How is credit availability for chattel loans? - Management reported stable credit availability, with rates still higher than traditional fixed-rate mortgages [98]