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Hovnanian warns scale matters as Q3 margins pressured
HousingWire reports revenue fell to $705.7 million, while adjusted EBITDA dropped to $31.9 million and adjusted pretax income posted the first loss versus guidance in 23 quarters.
Hovnanian Enterprises pointed to the need for deeper local scale as it reported fiscal third-quarter results marked by margin pressure. HousingWire reports the company’s management said local scale, more communities, and improved land economics are becoming decisive as headwinds for homebuilders persist, with elevated mortgage rates and affordability constraints among the challenges.
The quarter showed weaker top-line and profitability. HousingWire reports total revenue declined to $705.7 million from $800.6 million a year earlier, and adjusted homebuilding gross margin excluding interest expense and land charges improved sequentially to 14.6% but stayed below 17.3% from a year earlier.
Earnings also weakened meaningfully. HousingWire reports adjusted EBITDA fell to $31.9 million from $77.1 million, and the company reported a $2.8 million pretax loss versus $23.8 million of pretax income a year earlier, along with a $4.5 million net loss available to common shareholders.
While many results were within management’s stated ranges, HousingWire reports adjusted pretax income missed guidance, coming in at a $2.3 million loss, which was the first miss on that measure in 23 quarters.