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United Homes (UHG) Q2 Earnings Decline Y/Y, Gross Margin Down
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United Homes Group, Inc. (UHG - Free Report) reported earnings per share of 50 cents in the second quarter of 2024, which decreased 88.3% from the year-ago figure of $4.27.
Revenues in Detail
United Homes registered revenues of $109.4 million in the second quarter, down 10.4% year over year.
Home closings during the second quarter of 2024 were 337, down 12.5% compared with 385 in the year-ago period. Net new home orders during the quarter were 323, down 5.3% compared with 341 in the year-ago period.
Average sale price (ASP) of 299 production-built homes (which excludes 38 general contractor, custom, and build-to-rent homes) that closed during the second quarter of 2024 was approximately $341,000 compared with $313,000 in the year-ago period for 376 production-built homes (which excludes nine general contractor and custom homes), representing an 8.9% increase. The increase was primarily driven by changes in product mix resulting from acquisitions.
Active community count as of Jun 30, 2024, was 59, while there were 9,300 lots owned or controlled by the company or affiliates as of Jun 30, 2024.
United Homes Group, Inc. Price, Consensus and EPS Surprise
In the quarter under review, United Homes’ gross profit declined 18.1% to $19.6 million. The gross margin contracted 170 basis points (bps) to 17.9%. Gross profit percentage decreased by a larger margin due to the amortization of purchase accounting adjustments from acquisitions, severance costs from a June 2024 workforce reduction and abandoned project costs. However, this was partially offset by a decrease in interest expense in the cost of sales.
Adjusted gross margin in the second quarter of 2024 was 20.9% compared with 21.4% in the year-ago period. UHG's adjusted gross profit percentage decreased primarily due to the company continuing to offer attractive sales incentives to homebuyers.
Operating Expenses Analysis
Selling, general and administrative (SG&A) expenses increased 20.1% to $19.6 million.
In the second quarter of 2024, SG&A as a percentage of revenues was 17.9%, while adjusted SG&A was 14.7% of revenues.
Profitability
The operating loss totaled $0.04 million in the second quarter of 2024 against the operating profit of $7.6 million year over year.
In the second quarter, United Homes’ net income was $28.6 million, down 88.3% from the year-ago quarter.
Adjusted EBITDA during the reported quarter was $7.7 million, down 41.6% from the year-ago quarter.
Liquidity & Debt Management
United Homes exited second-quarter 2024 with cash and cash equivalents of $24.9 million compared with $28.7 million at the first-quarter end.
Our Take
United Homes exited the second quarter of 2024 with dismal top-line and bottom-line results. The decline in home closings and net new home orders during the quarter was also discouraging. The gross margin contraction during the reported quarter did not bode well.
On a positive note, an uptick in ASP of production-built homes during the reported quarter was impressive.
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United Homes (UHG) Q2 Earnings Decline Y/Y, Gross Margin Down
United Homes Group, Inc. (UHG - Free Report) reported earnings per share of 50 cents in the second quarter of 2024, which decreased 88.3% from the year-ago figure of $4.27.
Revenues in Detail
United Homes registered revenues of $109.4 million in the second quarter, down 10.4% year over year.
Home closings during the second quarter of 2024 were 337, down 12.5% compared with 385 in the year-ago period. Net new home orders during the quarter were 323, down 5.3% compared with 341 in the year-ago period.
Average sale price (ASP) of 299 production-built homes (which excludes 38 general contractor, custom, and build-to-rent homes) that closed during the second quarter of 2024 was approximately $341,000 compared with $313,000 in the year-ago period for 376 production-built homes (which excludes nine general contractor and custom homes), representing an 8.9% increase. The increase was primarily driven by changes in product mix resulting from acquisitions.
Active community count as of Jun 30, 2024, was 59, while there were 9,300 lots owned or controlled by the company or affiliates as of Jun 30, 2024.
United Homes Group, Inc. Price, Consensus and EPS Surprise
United Homes Group, Inc. price-consensus-eps-surprise-chart | United Homes Group, Inc. Quote
United Homes Gross Margin
In the quarter under review, United Homes’ gross profit declined 18.1% to $19.6 million. The gross margin contracted 170 basis points (bps) to 17.9%. Gross profit percentage decreased by a larger margin due to the amortization of purchase accounting adjustments from acquisitions, severance costs from a June 2024 workforce reduction and abandoned project costs. However, this was partially offset by a decrease in interest expense in the cost of sales.
Adjusted gross margin in the second quarter of 2024 was 20.9% compared with 21.4% in the year-ago period. UHG's adjusted gross profit percentage decreased primarily due to the company continuing to offer attractive sales incentives to homebuyers.
Operating Expenses Analysis
Selling, general and administrative (SG&A) expenses increased 20.1% to $19.6 million.
In the second quarter of 2024, SG&A as a percentage of revenues was 17.9%, while adjusted SG&A was 14.7% of revenues.
Profitability
The operating loss totaled $0.04 million in the second quarter of 2024 against the operating profit of $7.6 million year over year.
In the second quarter, United Homes’ net income was $28.6 million, down 88.3% from the year-ago quarter.
Adjusted EBITDA during the reported quarter was $7.7 million, down 41.6% from the year-ago quarter.
Liquidity & Debt Management
United Homes exited second-quarter 2024 with cash and cash equivalents of $24.9 million compared with $28.7 million at the first-quarter end.
Our Take
United Homes exited the second quarter of 2024 with dismal top-line and bottom-line results. The decline in home closings and net new home orders during the quarter was also discouraging. The gross margin contraction during the reported quarter did not bode well.
On a positive note, an uptick in ASP of production-built homes during the reported quarter was impressive.