Executive Summary

CVCO delivered a clean beat: revenue $556.5M (+9.7% Y/Y) and diluted EPS $6.55 (+24% Y/Y) vs S&P Global consensus of $542.9M and $6.09, respectively; EBITDA also topped consensus as insurance profitability inflected . Estimates marked with an asterisk are from S&P Global and lack document citations.
Mix/pricing tailwinds and stronger Financial Services gross margin (55.6% vs 21.8% Y/Y) expanded consolidated gross margin 130 bps to 24.2%; factory-built margins held at 22.9% despite tariff headwinds and regional softness in the Southeast .
Backlog stable-to-slightly higher at ~$210M (5–7 weeks), with selective Southeast production pullbacks offset by strength across northern regions; wholesale prices held firm across geographies .
Post-quarter, CVCO closed the $190M cash acquisition of American Homestar (Oak Creek) and repurchased $36M in stock (authorization remaining ~$142M), reinforcing a balanced capital allocation framework .
Near-term watch items: evolving tariffs (Canadian lumber duties + anti-dumping and China component tariffs) and Southeast demand; management expects tariff impacts beyond prior $2–$5.5M/quarter range as lumber measures take effect, partly offset by delayed China escalations .

What Went Well and What Went Wrong

What Went Well
- Broad-based execution: “continued strong performance from all phases of our business - production, retail and our Financial Services segment,” with capacity utilization ~75% and ASP/mix benefits .
- Insurance profitability step-change: Financial Services gross margin 55.6% (vs 21.8% Y/Y) on higher premiums and materially lower claims losses from underwriting/claims management improvements; segment operating profit turned positive .
- Pricing/mix resilience: Consolidated ASP up sequentially, driven by higher recognized units from retail and more multi-section homes; wholesale pricing held across regions, including the Southeast .
What Went Wrong
- Regional divergence: Southeast slowed (orders flat to down) necessitating targeted production reductions (extended downtime, rate cuts) while other regions remained strong; management is monitoring closely .
- Tariff headwinds: Q2 COGS impact ~+$2M; looking forward, Canadian lumber duty/anti-dumping increases add to prior $2–$5.5M/quarter range; sensitivity to local market pass-through remains .
- Slight sequential top-line downtick: Q2 revenue essentially flat vs Q1 (down ~$0.3M) as units sold fell (5,178 vs 5,416), offset by higher revenue/home; interest income also edged lower .

Financial Results

Consolidated performance (oldest → newest)

Metric	Q4 2025	Q1 2026	Q2 2026
Revenue ($M)	$508.4	$556.9	$556.5
Gross Profit ($M)	$116.1	$129.5	$134.4
Gross Margin (%)	22.8%	23.3%	24.2%
Income from Operations ($M)	$38.6	$60.4	$62.2
Pre-tax Income ($M)	$42.9	$65.3	$67.3
Net Income ($M)	$36.3	$51.6	$52.4
Diluted EPS ($)	$4.47	$6.42	$6.55

Segment revenue and profitability (oldest → newest)

Metric	Q4 2025	Q1 2026	Q2 2026
Factory-built Housing Revenue ($M)	$487.9	$535.7	$535.1
Financial Services Revenue ($M)	$20.5	$21.2	$21.4
Factory-built Gross Profit ($M)	$108.6	$120.8	$122.5
Financial Services Gross Profit ($M)	$7.5	$8.7	$11.9
Factory-built Gross Margin (%)	22.3%	22.6%	22.9%
Financial Services Gross Margin (%)	36.8%	40.9%	55.6%
Factory-built SG&A ($M)	$71.5	$63.2	$65.8
Financial Services SG&A ($M)	$6.0	$6.0	$6.5
Factory-built Operating Income ($M)	$37.1	$57.7	$56.7
Financial Services Operating Income ($M)	$1.5	$2.7	$5.4

KPIs and operating metrics (oldest → newest)

KPI	Q4 2025	Q1 2026	Q2 2026
Homes Sold (units)	5,060	5,416	5,178
Modules Sold (units)	8,260	8,900	8,699
Net Factory-built Revenue per Home	$96,415	$98,910	$103,344
Capacity Utilization	~—	~75%	~75% (vs ~70% PY)
Backlog ($M)	$197	~$200	~$210 (5–7 weeks)
Retail Mix (% of sold via Co. stores)	—	18.9% (sequential ref)	22.9%
Share Repurchases ($M)	—	~$50	~$36

Comparison to S&P Global consensus (oldest → newest; asterisk denotes S&P data)

Metric	Q4 2025 Estimate*	Q4 2025 Actual	Q1 2026 Estimate*	Q1 2026 Actual	Q2 2026 Estimate*	Q2 2026 Actual
Revenue ($M)	504.2*	508.4	525.0*	556.9	542.9*	556.5
EPS (Primary) ($)	4.87*	5.40 (Adj EPS, per press)	5.55*	6.42	6.09*	6.55
EBITDA ($M)	53.3*	53.96*	62.3*	65.53*	61.0*	67.40*

Values with asterisk were retrieved from S&P Global and may not appear in company documents.

Guidance Changes

CVCO does not issue formal quantitative guidance; management provided qualitative updates and cost frameworks.

Metric/Item	Period	Previous Guidance	Current Guidance/Commentary	Change
Tariff impact (COGS)	Near-term quarters	Prior framework: $2–$5.5M per quarter if fully implemented (ex lumber)	Q2 impact ~$2M; Canadian lumber duty/anti-dumping increases (35% + potential +10%) add incrementally beyond prior range; delayed China tariff increases bias toward lower end for China-sourced items	Headwinds rising (lumber); China delay a partial offset
Effective Tax Rate	Q2 actual	—	22.1% in Q2 vs 20.3% PY; driven by lower expected tax credits, partly offset by stock-based comp benefits	Higher vs PY
American Homestar acquisition	Closed 9/29/25	Announced 7/14/25	$190M cash; minimal purchase accounting impact expected on consolidated gross margin given inventory/marketability; integration progressing well	Closed; integration underway
Capacity/Utilization	Ongoing	~75% in Q1	~75% in Q2; selective reductions in Southeast; other regions increasing production	Maintained overall; regional mix shift
Pricing/ASP	Ongoing	Sequential ASP up in Q1	Sequential ASP up in Q2; wholesale prices “flat,” retail mix and multi-section mix drove reported ASP higher; pricing held across geographies	Maintained/firm
Share Repurchase Authorization	Current	$178M remaining (Q1)	~$142M remaining after ~$36M Q2 buyback	Reduced authorization capacity

Earnings Call Themes & Trends

Topic	Q-2 (Q4 2025)	Q-1 (Q1 2026)	Current (Q2 2026)	Trend
Regional trends	Weather impacted southern states in Feb; overall solid finish to FY25	Southeast lagged; monitoring backlogs; broader markets stable; Florida still challenged	Notable divergence: Southeast slowed; North strong; backlogs in SE stabilized and edged up late Oct	SE softer, stabilizing; North strong
Pricing/ASP & mix	Lower ASP Y/Y on mix/pricing in Q4	ASP up; true price appreciation in singles/doubles; multi-section mix up	ASP up; retail mix and multi-section drove reported ASP; wholesale pricing flat but firm across geographies	Firm pricing; mix tailwinds
Supply chain/tariffs	—	Tariffs limited impact in Q1; framework $2–$5.5M/quarter if fully implemented	Q2 tariff impact ~$2M; Canadian lumber duties higher; China hikes delayed; 60–90 day pass-through timelines	Headwinds building (lumber); China delay a relief
Financial Services	Q4 gross margin 36.8%; weather/loan sales variability	Sharp improvement; insurance profitability recovery	Gross margin 55.6%; majority of improvement from underwriting/actions vs favorable weather	Structural step-up vs PY
Capital allocation	New $150M buyback approved (May-25)	$50M buyback; announced Homestar deal	Closed Homestar ($190M); $36M buyback; continued plant investments	Balanced M&A/Capex/Buybacks
Regulatory/industry	—	Senate bill movement incl. chassis; HUD code update potential	HUD code update positive; chassis removal seen as innovation enabler; equal treatment for community ownership debated	Policy momentum supportive

Management Commentary

CEO Bill Boor: “We saw continued strong performance from all phases of our business - production, retail and our Financial Services segment. Our teams executed with excellence in a fluid market with continuing macroeconomic risks.”
On regional dynamics: “We did need to slow our Southeast production in Q2… All other regions maintained elevated production… Backlogs… served the Southeast stabilize and edge up… There’s nothing systemic we can point to…”
On pricing/mix: “Wholesale prices were essentially flat… upward movement in reported ASP was primarily the result of a higher percentage of recognized units from retail, and… more multi-section homes.”
On Financial Services: “Operating profit is up $14 million from a loss last year to an $8 million profit this year… majority of the increased profitability has resulted from… underwriting and claims management.”
CFO Allison Aden on tariffs: “We estimate that the impact of tariffs in Q2 was approximately $2 million… Canadian lumber countervailing duties… increased from 14.5% to 35%… subsequent… announced… 10% tariffs… These would have a meaningful impact… A positive is… China tariff increase… kicked out… reduce our estimate probably to the lower end… for those components.”

Q&A Highlights

Regional outlook: Orders modestly down in Q2 (seasonal), SE moderated but stabilized into October; production held firm elsewhere; plants outside SE increasing production .
Tariffs and cost outlook: Q2 impact ~$2M; prior $2–$5.5M/quarter framework likely understated for Canadian lumber; China escalation delay is a relief; 60–90 day commodity cost flow-through .
American Homestar: Expect minimal consolidated gross margin impact from purchase accounting; ~100 stores post-deal; AHS ~60% of homes through company-owned retail—lifts integrated retail mix .
Financing environment: Chattel rates mid-8% (~8.5%); ongoing work to expand secondary market take-out; selective balance sheet holds as a bridge .
Pricing discipline: No evidence of broad competitive price pressure; pricing held in SE despite volume softness .

Estimates Context

Q2 beat: Revenue $556.5M vs $542.9M*; EPS $6.55 vs $6.09*; EBITDA $67.4M* vs $61.0M* .
Back-to-back beats: Q1 revenue $556.9M vs $525.0M*; EPS $6.42 vs $5.55* . Q4 revenue $508.4M vs $504.2M*; Adj EPS $5.40 vs $4.87* .
Implication: Street likely raises near-term estimates on insurance profitability and ASP/mix resilience, but may temper factory margin expectations for tariff headwinds and SE softness.
Values with asterisk were retrieved from S&P Global and may not appear in company documents.

Key Takeaways for Investors

Quality beat with higher gross margin and strong EPS on resilient pricing/mix and a profitable insurance rebound; limited sequential top-line change as unit volume dipped .
Regional divergence is real but manageable: SE trimmed production yet stabilized; broad-based strength across northern states supports volumes/backlog .
Tariffs represent the near-term swing factor—Canadian lumber duties likely add to COGS beyond the prior $2–$5.5M/qtr framework; monitor pass-through and lumber/OSB indices (60–90 day lag) .
Retail mix set to rise with Homestar (higher integrated retail %) and could support ASP and consolidated margin via mix, even as purchase accounting impact is minimal .
Capital deployment remains shareholder-friendly and balanced: closed $190M acquisition, continued capex-driven plant modernization, and ongoing buybacks with ~$142M authorization remaining .
Financial Services appears structurally improved (underwriting/claims), offering a more durable earnings buffer against manufacturing cyclicality .
Trading lens: Near-term catalysts include Street estimate revisions and integration updates; risks center on tariff cost cadence and SE demand trajectory.

CAVCO INDUSTRIES, INC. (CVCO)·Q2 2026 Earnings Summary