James 'Jay' McCanless's questions to Beazer Homes USA Inc (BZH) leadership • Q1 2025
Question
James 'Jay' McCanless of Wedbush Securities asked about a range of topics, including the margin difference between spec and to-be-built homes, the long-term target for this mix, details on a new rate-lock program, and the sustainability of order growth in the West. He also sought to confirm changes to the full-year guidance.
Answer
CEO Allan Merrill stated the margin gap between to-be-built and spec homes is 3-5 points and the long-term target mix is likely 60% to-be-built and 40% spec. He explained the new rate-lock program reallocates existing incentive dollars to make to-be-built homes more competitive. CFO David Goldberg and CEO Allan Merrill confirmed the primary guidance change was pointing to the low end of the gross margin range (19.5%). Merrill also noted the $3,000 cost saving represents just over 1% of a home's build cost.