Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Century Communities Inc (CCS, Financial) maintained relatively stable homebuilding gross margins of 20.1% despite economic headwinds.
- The company delivered 2,284 homes, only a 3% decline from the previous year, showcasing resilience in a challenging market.
- Century Communities Inc (CCS) has a strong land position with close to 80,000 owned and controlled lots, providing a solid foundation for future growth.
- The company was recognized on Newsweek's list of America's Most Trustworthy Companies for the third consecutive year.
- Century Communities Inc (CCS) increased its quarterly cash dividend by 12% to $0.29 per share, reflecting confidence in its financial stability.
Negative Points
- The absorption rate in the first quarter was weaker than expected due to economic uncertainty and interest rate volatility.
- Net new contracts declined by 6% compared to the previous year, indicating challenges in maintaining sales momentum.
- The company had to increase incentives on closed homes to approximately 900 basis points, impacting gross margins.
- Century Communities Inc (CCS) reduced its full-year home delivery guidance due to ongoing economic uncertainty and declining consumer confidence.
- The company made the difficult decision to rightsize its workforce and implement cost-saving programs due to a slower-than-expected spring selling season.
Q & A Highlights
Q: Why was there a stark difference in absorption rates between Century Communities' core businesses and Century Complete?
A: John Dixon, CFO, explained that Century Complete benefits from operating in markets with less direct competition, leading to a more stable absorption profile. Robert Francescon, Co-CEO, added that Texas had the lowest performance, which impacted overall absorption rates.
Q: How is Century Communities addressing slower sales in April, and are there plans for more aggressive pricing strategies?
A: Robert Francescon, Co-CEO, stated that for unsold completed homes, the company is using both interest rate buydowns and price reductions. This approach is expected to impact margins in Q2 due to increased incentives.
Q: What is driving the expected increase in closings in the back half of the year despite current headwinds?
A: John Dixon, CFO, noted that the growth in community count, particularly in the second and third quarters, will support higher closings in the latter half of the year, even with flat absorption rates.
Q: Can you provide details on the expected SG&A savings from recent cost-reduction initiatives?
A: John Dixon, CFO, mentioned that savings from cost-reduction activities, including workforce rightsizing, are incorporated into the full-year SG&A guidance and will impact various line items such as cost of sales and financial services.
Q: How is Century Communities managing potential supply chain disruptions due to tariffs?
A: Robert Francescon, Co-CEO, acknowledged the potential for supply chain disruptions but stated that no significant impacts have been observed yet. The company is prepared to mitigate any issues that may arise.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
