Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: You mentioned expecting incentives to come down to 7% or 8% in the first quarter. Is this due to a shift towards build-to-order homes or market trends? A: John Ho, CEO: It's a combination of both. We're seeing incentives trend down in the market and shifting our portfolio towards build-to-order homes, which have higher margins and require fewer incentives.
Q: Can you discuss the impact of tariffs and building costs on margins? A: Michael Forsum, COO: We haven't seen significant impacts from tariffs as our suppliers have diversified their sourcing. Labor conditions are stable, and we're continuously looking for ways to reduce costs without sacrificing quality.
Q: What caused the delivery performance to be lighter than expected this quarter? A: Christopher Porter, CFO: The deliveries were back-end loaded, and some shifted into early January. We had a record quarter for closings, but some were pushed into the first quarter.
Q: How do you plan to achieve the goal of 3 to 3.5 sales per community per month? A: Michael Forsum, COO: This is an aspirational goal, and we aim to maintain a vibrant sales pace. We're focusing on affordability, incentives, and reducing spec inventory to achieve this.
Q: Can you provide more details on the land coming back to market and pricing trends? A: Michael Forsum, COO: We're seeing recalibrated pricing in master-planned communities, with leftover parcels coming back to market. This reflects a disciplined approach to product segmentation and value proposition.
Q: What factors contributed to the change in margins compared to expectations? A: John Ho, CEO: Elevated unsold spec inventory and increased incentives due to mortgage rate volatility impacted margins. However, the shift towards build-to-order homes should alleviate some competitive pressures.
Q: Will purchase accounting adjustments continue to affect financials in 2025? A: Christopher Porter, CFO: We expect around $20 million to $23 million in purchase price accounting to be amortized throughout 2025, primarily related to the Texas acquisition.
Q: How are you addressing the affordability challenges in Florida? A: Michael Forsum, COO: We're focusing on incentives to reduce monthly mortgage rates and addressing rising insurance premiums and property taxes. Demand remains strong, but affordability is a key challenge.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.