United Homes Group Inc (UHG) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
United Homes Group Inc (NASDAQ:UHG) delivered 252 homes in the first quarter, generating home sales revenue of $87 million.
Home sales gross margins improved by 20 basis points year over year.
The company has undertaken a product refresh and direct cost reduction initiative, with newly designed homes generating margins well in excess of the company's average.
UHG identified over $3.5 million in direct construction cost savings for homes expected to be closed in 2025.
The shift to pre-sold homes is producing higher margins and providing better visibility into delivery outlooks.
Sales pace in January and the first half of February was disappointing, impacting the number of homes available to close in the second half of the quarter.
Revenue for the first quarter of 2025 decreased by 13.7% compared to the first quarter of 2024.
Net new orders for the first quarter were down from the prior year period, with 296 homes compared to 384 homes.
Gross profit for the first quarter of 2025 was down 12.4% from the prior year period.
Incentive activity remains elevated, impacting profitability despite efforts to offset with improved product design and pre-sold home focus.
Warning! GuruFocus has detected 6 Warning Signs with UHG.
Q: Can you provide an overview of United Homes Group's performance in the first quarter of 2025? A: James M Pirrello, Interim CEO, reported that United Homes Group delivered 252 homes with an average sales price of $345,000, generating $87 million in home sales revenue. The company saw a slower sales pace in January and early February, impacting results, but sales improved in March and April. The company is optimistic about operational momentum going into the second quarter.
Q: What initiatives has United Homes Group undertaken to improve its competitive position and profitability? A: James M Pirrello, Interim CEO, mentioned a product refresh and direct cost reduction initiative. Newly designed homes have been well-received, with 23 closed in Q1 at an average gross margin of 24%. The company has identified over $3.5 million in direct construction cost savings for homes expected to close in 2025.
Q: How is United Homes Group addressing the issue of elevated incentives and price discounting? A: Jack Micenko, President, stated that financing incentives remain a key selling tool, accounting for 4% of the average sales price. The company is shifting focus to pre-sold homes and refreshed products to dampen the impact of incentives on margins.
Q: What is the company's strategy regarding land acquisition and community openings? A: Jack Micenko, President, explained that United Homes Group is pursuing an asset-light strategy, owning or controlling approximately 7,500 lots. The company plans to open 10 new communities in Q2 and 18 in Q3, featuring newly refreshed products with higher margins.
Q: How did United Homes Group's financial results for Q1 2025 compare to the previous year? A: Keith Feldman, CFO, reported a net income of $18.2 million, with revenue of $87 million, down 13.7% from Q1 2024. The decline was due to lower home closings, partially offset by a 2.9% increase in average sales price. Gross profit was $14.1 million, with a slight improvement in gross margin to 16.2%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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