Hovnanian tumbles as closings slip from a year ago


Is it bad tidings from Hovnanian (HOV -5.9%) which reported a larger-than-expected loss in FQ1 (ended Jan. 31), with closings of 1,138 homes actually slipping 4.2% from a year ago (have any other homebuilders reported lower closings)?

Revenue of $364M gained 1.6% Y/Y, with gross margin 180 bps higher to 18.8%.

Net contracts during Q1 of 1,202 homes is off 10.6% from a year ago, with the dollar value down 1.6%. Contract backlog of 2,456 homes is up 6.7%, dollar value up 11.4%.

SG&A expense of $60.4M or 16.6% of revenue compares with $49.3M or 13.8% of revenue a year ago.

Ara Hovnanian: "Both sales and deliveries were impacted by poor weather conditions and deliveries were further impacted by shortages in labor and certain materials in some markets that have extended cycle times ... We have taken steps to spur additional sales in the spring selling season, including the launch of Big Deal Days, a national sales campaign during the month of March."

CC at 11 ET

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