Cavco Revenue Rises 17.9% to $656.4 Million in Second Quarter
Key Facts
Cavco reported results on October 29 for its fiscal second quarter ended September 26, with revenue of $656.4 million, up 17.9% from the same period a year earlier. The company said revenue growth was driven mainly by higher home sales volume and an increase in the average selling price per home. Revenue exceeded the consensus estimate of $613.28 million, according to Reuters via Investing.com. Diluted net income per share was $7.17, compared with analysts’ estimate of $5.52. The results came in the second quarter of fiscal 2027, after the company posted two consecutive quarters of record revenue and unit volume, according to the CEO.
Sales figures reflected growth in homes and units sold, which should be distinguished: factory-built homes sold rose 15.3% to 5,972 homes, while pre-built construction units sold increased 12.6% to 9,794 units. Average factory-built housing revenue per home sold was $106,118, up 2.7% from $103,344 a year earlier. Factory-built housing revenue was $633.736 million, while financial services revenue was $22.642 million. The company attributed factory-built housing revenue growth to higher sales volume, driven by the American Homestar acquisition and organic growth, alongside higher revenue per home sold. Financial services benefited from increased loan sales and higher insurance premiums retained after reinsurance.
Sales expansion did not translate into year-over-year improvement in the factory-built housing margin, as the segment’s gross profit margin fell to 21.1% from 22.9% a year earlier. By contrast, the financial services margin rose to 60.2% from 55.6%. Management said selling price increases exceeded cost pressures, delivering a slight sequential improvement in the margin. Pretax income was $73 million, up 9.1% from $67 million in the comparable period. Diluted net income per share rose 9% to $7.17 from $6.55. Selling, general and administrative expenses included a one-time $7 million benefit from an insurance premium refund, which increased diluted net income per share by $0.70.
For the six months ended September 26, revenue rose 13.7% to $1.266337 billion, while net income fell 6.1% to $97.710 million. Diluted net income per share declined 2.9% in the first half to $12.59, compared with $12.96 in the comparable period. That makes the first-half picture different from the standalone quarter, which recorded year-over-year growth in net income and diluted earnings per share. In the second quarter alone, net income was $55.439 million, compared with $52.381 million a year earlier, an increase of 5.8%. On capital allocation, Cavco repurchased about $30 million of shares during the quarter, with $158 million remaining available for repurchases under board authorizations.
Backlog was $348 million at quarter-end, equivalent to 8-10 weeks of production, up $50 million from $298 million at the end of the prior quarter. Management said the order pace was slower than in the previous quarter, but remained healthy as the backlog continued to grow. During the quarter, the company began receiving orders and shipments for workforce housing tied to data centers, and that business contributed to backlog, though the company did not disclose its value. Management said materials inflation continued and was expected to remain a challenge in the coming period. As the seasonally slower winter months approach, the company said it can adjust production in line with demand trends.
Among the developments highlighted by the company was the display of its “Grande Arbor” home at the Department of Housing and Urban Development’s Innovative Housing Showcase in Washington; the company described it as the first home built to the “HUD-Code” standard without a steel chassis. Ticker reported that Cavco shares jumped 12% on October 30 after the results were announced, linking the move to the earnings beat and the emergence of workforce housing orders for data centers. The stock had closed at $547.25 on October 29. Senior executives were scheduled to hold a conference call to review results on October 30 at 1:00 p.m. Eastern time. The company is prioritizing backlog and materials price trends as it enters the winter season.