Skyline Champion(SKY) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net sales increased by 15.3% year-over-year to $645 million, with homes sold increasing by 13$181 million, with gross margin expanding by 280 basis points to 25.3% [31] - Net income attributable to Champion Homes increased by 31% to $62 million, translating to earnings of$1.06 per diluted share [34] Business Line Data and Key Metrics Changes - Sales to independent retailers grew, supported by direct-to-consumer and digital capabilities [16] - The Regional Homes business showed organic growth, contributing positively to overall sales [17] - In the builder developer channel, homes sold increased year-over-year, with a growing project pipeline [18] Market Data and Key Metrics Changes - U.S. factory-built housing revenue increased by 17%, with the average selling price per home rising by 2.8% to $94,900 [27] - Canadian revenue declined by 16$122,900 due to a shift in product mix [29][30] Company Strategy and Development Direction - The company is focused on expanding retail and direct-to-consumer capabilities, along with strategic investments to support community and independent retail customers [11] - Champion Homes aims to leverage its strengths and drive additional value through customer-centric innovation and omnichannel retail [11][39] - The company is committed to sustainable profitable growth and long-term value creation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the fourth quarter, anticipating low double-digit revenue growth compared to the same quarter last year [22][46] - The company is closely monitoring the dynamic tariff environment and is prepared to scale production based on order demand [23][70] - Management highlighted the importance of affordable housing and expects strong medium-term and long-term demand in the U.S. and Canadian markets [24] Other Important Information - The company has a strong cash position with $582 million in cash and cash equivalents and plans to continue share repurchases [36] - Management expressed concerns for those affected by the California fires but reported no direct damage to facilities [21] Q&A Session Summary Question: Can you provide more color on order trends and customer outlook for 2025? - Management noted that orders slowed towards the end of Q3 due to seasonality but remains optimistic for Q4 with healthy traffic and quoting activity [46][47] Question: What are the strategic focuses moving forward? - Management emphasized focusing on fundamentals, product innovation, and enhancing customer experience while being smart with capital deployment [50][51] Question: How is the company managing backlogs and order rates? - Management indicated confidence in order rates and plans to align production with demand while monitoring the broader housing market [57][58] Question: What is the impact of tariffs on operations? - Management is closely monitoring the situation and has a playbook to balance costs, prices, and volume in response to potential tariff impacts [69][70] Question: What percentage of U.S. sales are through captive retail? - Currently, 35% of U.S. sales are through captive retail, with a balanced approach to growth across all channels [82] Question: How is the company planning to participate in rebuilding efforts in California? - Management is eager to assist in rebuilding efforts and is proactively engaging with local teams to prepare for future home deliveries [94]