Champion Homes, Inc. Q1 FY2026 earnings call

• Added 2 executives, including a Board member and Chief Human Resources Officer. - New product strategy received national recognition, with homes featured on Designing Spaces. - Bipartisan vote on ROAD to Housing Act supports off-site built homes. - First quarter net sales up 12% to $701M, homes sold up 8% to 7,215. Gross profit rose 16% to $190M, gross margin expanded 90 basis points. SG&A increased $2M but partially offset by prior year expenses. Net income climbed to $65M, EPS $1.13. Adjusted EBITDA up 26% to $94M. - Sales channels: Independent retail increased, captive retail up due to higher ASP and product mix; community sales up but expecting moderation; builder developer sales grew. Champion Financing operating effectively.

U.S. factory-built housing: Net sales increased 12% to $701 million, with homes sold up 7% to 6,965. Average selling price per home rose 4% to $95,000. Sequential revenue in Q1 increased 18% from Q4 2025, with manufacturing capacity utilization at 61%. Canadian revenue: Totaled $30 million, a 50% increase in homes sold. Product mix shifted to more single-section homes, but average home selling price decreased 3% to $120,500.

• Q2 revenue expected to be flat to up low single digits vs prior year. - Backlogs remain within 4 to 12 weeks range. - Near-term gross margin anticipated in the 25% to 26% range.

• Consumer uncertainty and factors impacting the housing market. - Fluctuations in product mix and sales channels affecting gross margin. - Tariff dynamics and material cost changes.

Q: Commentary on geographic backdrop and order rates softening.

A: Strong community business in Q1, but near-term moderation expected, with some regions showing softness.

Q: June performance vs late May.

A: Impact of community business, improved pricing in captive retail, better material costs contributed to strong Q1.

Q: Community channel moderation.

A: Robust orders in Q1, but growth rate not continuing in Q2, consistent across multiple geographies.

Q: Canada demand.

A: Strength in Alberta, 4% of revenue, market dynamic with consumer challenges.

Q: Iseman contribution.

A: Closed on May 30, 1 month revenue in Q1, captive retail not impacting backlog.

Q: Gross margin Q2.

A: Balancing cautious consumer sentiment, gross margin to be 25%-26% near term.

Q: SG&A leverage.

A: Balancing SG&A based on demand.

Q: Pricing dynamics.

A: Varies by market, balance volume and price, captive retail took price increases in certain geographies.

Q: Visibility into guideposts.

A: Dependent on end consumer transactions, weather, financing, moving pieces.

Q: Channel order trends.

A: Builder developer new projects, independent quoting activity, captive retail working through inventory.

Q: Inventory in captive retail.

A: Working week by week, location by location, update in Q2.

Q: Tariff impact.

A: Tariffs not material in Q1, 1% impact on material costs contemplated in 25%-26% margin.

Q: Household income of buyers.

A: Seeing first-time homebuyers, people moving from site-built to manufactured housing, encouraged by efforts.