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CAVCO INDUSTRIES INC. (CVCO)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue rose 21% year over year to $508.4M, with units shipped up ~29% and modules up ~33%; consolidated gross margin contracted 80 bps to 22.8% as average revenue per home declined 4.7% .
  • EPS outcome hinged on a one-time non-cash brand write-off: GAAP diluted EPS was $4.47, while adjusted diluted EPS was $5.40; S&P Global consensus EPS was $4.87*, creating a GAAP miss but an adjusted beat; revenue modestly beat consensus ($504.2M*) .
  • Management cited harsh February weather (24 plant down days) and a strong March order uptick; backlog ended at $197M (5–7 weeks), down from $224M in Q3 and $276M in Q2, and the Board added a new $150M buyback authorization .
  • Strategic catalyst: Cavco unified all 31 plants under the Cavco brand and introduced national product lines to simplify customer search and leverage digital marketing; the team expects production bias to increase given order momentum and backlog levels .

What Went Well and What Went Wrong

What Went Well

  • Volume-driven growth: Factory-built homes sold rose 28.5% YoY (5,060 vs. 3,938), modules +32.6%, driving factory-built revenue +22.4% to $487.9M despite lower ASPs .
  • Brand unification: “We significantly improved our go-to-market position by unifying our 31 manufacturing facilities under the Cavco name…national product lines will logically segment our homes based on specific characteristics” – CEO Bill Boor .
  • Operational readiness: “We held production levels throughout the quarter and are well positioned to increase from here as the market allows” – CEO Bill Boor; utilization ~70–75% vs. ~60% prior year .

What Went Wrong

  • Margin compression: Consolidated gross margin fell 80 bps YoY; factory-built margin -10 bps to 22.3%, financial services margin down to 36.8% (vs. 45.0% prior-year) on fewer loan sales .
  • Price pressure and mix: Net revenue per home sold fell 4.7% on lower company-owned store mix, product price decreases, and more single-section homes; Florida remained a challenging pricing market .
  • One-time charge: SG&A rose 26% YoY, including a $10M non-cash write-off of legacy trade names tied to the rebrand; GAAP EPS ($4.47) was below S&P consensus (~$4.87*) due to this item .

Financial Results

Quarterly Financials – Actuals

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$507.461 $522.040 $508.358
Diluted EPS (GAAP) ($)$5.28 $6.90 $4.47
Adjusted Diluted EPS ($)——$5.40
Gross Margin % (Consolidated)22.9% 24.9% 22.8%
Factory-built Housing Gross Margin %22.9% 23.6% 22.3%
Financial Services Gross Margin %21.8% 55.5% 36.8%
Pretax Income ($USD Millions)$54.950 $69.336 $42.923

Segment Breakdown

Segment MetricQ2 2025Q3 2025Q4 2025
Factory-built Net Revenue ($USD Millions)$486.343 $500.860 $487.860
Financial Services Net Revenue ($USD Millions)$21.118 $21.180 $20.498
Factory-built Income from Operations ($USD Millions)$50.080 $57.784 $37.115
Financial Services Income from Operations ($USD Millions)$(0.955) $6.186 $1.515

KPIs and Operating Metrics

KPIQ2 2025Q3 2025Q4 2025
Factory-built Modules Sold8,119 8,378 8,260
Factory-built Homes Sold4,913 5,059 5,060
Net Revenue per Home ($)$98,991 $99,004 $96,415
Capacity Utilization~70% ~75% ~70–75%
Backlog ($USD Millions)$276 $224 $197
Backlog Weeks—6–8 weeks 5–7 weeks

Results vs. S&P Global Consensus

MetricQ2 2025Q3 2025Q4 2025
Revenue Actual ($USD Millions)$507.461 $522.040 $508.358
Revenue Consensus ($USD Millions)$479.790*$480.306*$504.152*
EPS Actual (GAAP) ($)$5.28 $6.90 $4.47
EPS Consensus ($)$4.76333*$4.88667*$4.86667*

Values with asterisks are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Production rateFiscal Q1 2026n/aBias to increase; plants either holding or planning to ramp as orders/backlog allow Qualitative improvement
Factory-built gross marginFiscal Q1–Q2 2026n/aLimited impact from new tariffs expected late Q1; potentially heavier in Q2; cost inflation contingent on commodities and tariff scope Risk flagged
Pricing environmentNear-termn/aIsolated price pressure, notably Florida; more pressure on single-section products; pricing not typically seasonal Mixed
Financial services margin sensitivityNear-termn/aStorm activity could increase claims and affect margins; structural changes underway to limit losses Risk flagged
Share repurchase authorizationAs of May 2025Prior ongoing programNew $150M authorization; ~$228M remaining under authorization Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q3 2025)Current Period (Q4 2025)Trend
Orders/backlog trajectoryBacklog +19% QoQ to $276M; ramping production with improving orders Backlog $224M (6–8 weeks), ramped production ahead of spring season Backlog $197M (5–7 weeks); strong March orders; April consistent with March uptick Slightly down backlog, improving orders
Pricing/mixASPs fell on mix and fewer company-owned store sales ASP pressure persisted, offset by efficiency gains Single-section pricing pressure; Florida weakness; pricing not seasonal Mild pressure persists
Cost/commoditiesInsurance losses from storms; input cost tailwinds modest Input cost efficiencies improved margins; insurance strong Tariff impact timing 60–90 days; watch commodity volatility (e.g., OSB) Potential cost headwind into Q2
Supply chainWeather events impacted operations earlier; resiliency noted Operational execution improved 24 down days in Feb across TX/SE states; shipments backed up but not negated Improving post-weather
Regulatory/policyn/an/aLegislative focus on HUD sole regulator; chassis definition change could unlock innovation and urban/suburban opportunities Potential medium-term tailwind
Brand/Go-to-marketn/an/aUnified under Cavco brand; national product lines; digital marketing leverage Strategic strengthening
Financing environmentn/an/aChattel rates ~8–9%; availability stable Neutral

Management Commentary

  • “A significant pickup in activity in March helped close out a solid quarter after unusually harsh weather across the southern states in February… We held production levels throughout the quarter and are well positioned to increase from here as the market allows.” – CEO Bill Boor .
  • “We significantly improved our go-to-market position by unifying our 31 manufacturing facilities under the Cavco name… national product lines will logically segment our homes based on specific characteristics.” – CEO Bill Boor .
  • “Selling, general and administrative expenses increased primarily as a result of a $10.0 million one-time, non-cash charge related to the adjustment of certain legacy brand intangibles due to the consolidation of the Company's brand.” – Press release .
  • “Effective income tax rate was 15.4%… due to higher Energy Star tax credits and greater tax benefits from stock option exercises.” – CFO Allison Aden .
  • “Tariffs really didn’t have an impact in Q4… limited impact at end of Q1, potentially heavier in Q2; 60–90 day lag into COGS.” – CFO Allison Aden .

Q&A Highlights

  • Production and orders cadence: April order rates consistent with March uptick; plants biased to increase production where backlog supports it .
  • Margins outlook: Factory gross margin resilient despite ASP pressure; potential tariff-driven material cost impact late Q1/Q2; insurance claims volatility can affect consolidated margins .
  • Weather impact: ~24 down days in February across Texas/Southeast; margin pressure directional but not large .
  • Pricing dynamics: Isolated competitive pressure (Florida); more leakage on single-section homes; pricing not typically seasonal .
  • Financing: Chattel rates ~8–9%; availability unchanged .
  • Policy landscape: Momentum for HUD sole regulator and chassis definition changes could expand product innovation and markets over time .

Estimates Context

  • Q4 FY2025: Revenue beat consensus ($508.4M vs. $504.2M*), EPS outcome mixed: GAAP diluted EPS ($4.47) below consensus ($4.87*), but adjusted diluted EPS ($5.40) above consensus. The delta reflects a $10M non-cash write-off tied to brand unification, adding ~$0.93 to adjusted EPS .
  • Trajectory: Q2 and Q3 delivered solid beats on revenue and EPS versus consensus, aided by volume and, in Q3, strong insurance profitability and favorable tax items .
    Values marked with asterisks are retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup: Orders strengthened in March/April and plants are inclined to raise production; backlog is 5–7 weeks, providing visibility despite Q/Q backlog declines (Q2→Q3→Q4: $276M → $224M → $197M) .
  • Earnings quality: Adjusted EPS better reflects core operations given the non-recurring brand write-off; GAAP/adjusted divergence explains the consensus variance in Q4 .
  • Watch margins: ASP pressure (single-section, Florida) and potential tariff cost flow-through late Q1/into Q2 could cap margin expansion; commodity volatility (e.g., OSB) is a swing factor .
  • Strategic positioning: Brand unification plus national product lines and enhanced digital marketing should improve lead quality and dealer productivity as demand normalizes .
  • Capital allocation: Continued buybacks (new $150M authorization; ~$228M remaining) alongside a debt-free balance sheet provide downside support and EPS accretion .
  • Policy optionality: Potential HUD regulator clarity and chassis definition changes could unlock new product configurations and markets over the medium term .
  • Trading implication: Stock likely reacts to the narrative around adjusted vs. GAAP EPS, production ramp signals, and tariff cost visibility; watch Q1 call for early margin/tariff update cadence and Florida pricing stabilization .