Michael Rehaut's questions to LGI Homes Inc (LGIH) leadership • Q1 2025
Question
In a follow-up, Michael Rehaut sought to clarify the accounting for the $8.6 million onetime charge related to the forward commitment program. He also asked again for more specific guidance on the gross margin cadence for the second, third, and fourth quarters.
Answer
CFO Charles Merdian confirmed the breakdown of the onetime charge: $6.5 million was recorded as a reduction to revenue (impacting gross margin), and the remaining $2.1 million was recorded in G&A expense. CEO Eric Lipar reiterated that gross margins are expected to ramp up through the year due to higher volume and reaffirmed the full-year adjusted gross margin guidance of 24% to 25.5%.