Name: NOBILITY HOMES INC Q2 2025 Earnings Call
Start: 2025-06-16T00:00:00.000Z

Executive Summary

Net sales increased 28% year over year to $14.76M, with diluted EPS of $0.70; operating income rose to $2.74M and net income to $2.29M, driven by stronger wholesale volumes despite retail softness .
Gross margin compressed to 31% (vs. 36% YoY) due to mix shift toward independent dealers (wholesale) and elevated input costs; SG&A leverage improved to 13% of sales from 17% YoY .
Management highlighted interest-rate driven demand headwinds, supply chain delays, and materials inflation; Florida industry shipments declined ~11% Nov 2024–Apr 2025, underscoring a cautious near-term backdrop .
No earnings call was held; the Q1 one-time cash dividend of $1.25 per share (paid April 14, 2025) and strong balance sheet (no debt, $26.4M in cash/CDs/short-term investments) are supportive of capital flexibility .

What Went Well and What Went Wrong

Wholesale channel strength: homes sold to independent dealers surged (61 units vs. 19 YoY), lifting Q2 revenue despite retail unit declines .
Operating leverage: operating income improved to $2.74M and SG&A fell to 13% of sales (vs. 17% YoY), reflecting discipline on costs and mix .
Balance sheet resilience: no debt; working capital ~$43.0M; cash, CDs, short-term investments totaled $26.4M at quarter-end per press release and 10-Q liquidity discussion .
- Quote: “Maintaining our strong financial position is vital for future growth and success… our specific geographic market is one of the best long-term growth areas in the country.” — Terry Trexler .

Margin pressure: gross margin declined to 31% (vs. 36% YoY) as wholesale mix increased and materials inflation persisted .
Retail softness: new retail homes sold fell (65 vs. 73 YoY) amid higher mortgage rates and delayed customer purchasing decisions .
Industry and ancillary headwinds: Florida manufactured housing shipments down ~11%; insurance commissions decreased ($77.4K vs. $93.9K YoY) .

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD)	$11,527,978	$12,241,742	$14,757,337
Gross Profit ($USD)	$4,168,394	$3,970,785	$4,631,416
Operating Income (EBIT) ($USD)	$2,257,014	$2,294,135	$2,742,219
Net Income ($USD)	$2,025,959	$1,980,422	$2,292,320
Diluted EPS ($USD)	$0.62	$0.60	$0.70
Gross Margin (%)	36%	32.4% (calc from GP/Rev)	31%
EBIT Margin (%)	19.6% (calc)	18.7% (calc)	18.6% (calc)
Net Income Margin (%)	17.6% (calc)	16.2% (calc)	15.5% (calc)

Segment/Mix Breakdown (Net Sales):

Segment	Q2 2024	Q2 2025
Homes sold through Company-owned sales centers ($)	$10,475,686	$10,292,466
Homes sold to independent dealers and parks ($)	$958,396	$4,387,441
Insurance agent commissions ($)	$93,896	$77,430
Total Net Sales ($)	$11,527,978	$14,757,337

KPIs:

KPI	Q2 2024	Q2 2025
New homes sold – Company retail centers (units)	73	65
Homes sold to independent dealers (units)	19	61
Total new factory-built homes produced (units)	107	109
Avg new manufactured home price – retail ($)	$143,503	$158,346
Avg new manufactured home price – wholesale ($)	$68,172	$70,532
Gross profit % of net sales – retail	24%	24%
Gross profit % of net sales – manufacturing	20%	25%

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Financial Guidance (Revenue/Margins/OpEx, etc.)	FY 2025	None provided	None provided	Maintained (no formal guidance)
Dividend	FY 2024 (paid Apr 14, 2025)	N/A	One-time $1.25 per share; record date Mar 31, 2025; payable Apr 14, 2025	Declared
Capital Structure (Debt)	Q2 2025	No debt	No debt	Maintained

Topic	Previous Mentions (Q-2: Q4 2024)	Previous Mentions (Q-1: Q1 2025)	Current Period (Q2 2025)	Trend
Interest rates impacting demand	Higher mortgage rates negatively impacting sales; building lower-priced homes	Higher rates delaying customer purchasing; retail declines	Continued demand slowdown due to rates and mortgage costs	Persistent headwind
Supply chain/materials inflation	Delays and cost inflation in key materials (shingles, vinyl, PVC, etc.)	Ongoing delays, back orders, price increases, labor shortages	Continued delays and inflation in building products	Continuing challenges
Channel mix shift (wholesale vs. retail)	Retail softness in FY24	Retail down; manufacturing and retail delays impacting set-up	Wholesale dealer sales up (92 vs. 63 YTD); retail units down (132 vs. 153 YTD)	Shift toward wholesale
Florida industry backdrop	Shipments declined ~3% Nov 2023–Oct 2024	Shipments declined ~15% Nov 2024–Jan 2025	Shipments declined ~11% Nov 2024–Apr 2025	Mixed but soft
Corporate communications	No call (press release engagement info)	No call (press release engagement info)	No call (press release engagement info)	Unchanged

“Net sales increased in 2025 as compared to 2024 due to the number of homes sold to independent dealers during 2025 (92 versus 63) however; the number of new retail homes sold by our Company owned retail sales centers in 2025 decreased as compared to 2024 (132 versus 153)… We expect these challenges will continue throughout fiscal year 2025.” — Terry Trexler, President .
“The current demand for affordable manufactured housing in Florida and the U.S. has slowed due to the interest rate environment and increased costs associated with mortgages… shipments… declined by approximately 11% from the same period last year.” .
“Maintaining our strong financial position is vital for future growth and success… our specific geographic market is one of the best long-term growth areas in the country.” .

Management did not hold a conference call; investor inquiries directed to Terry or Tom Trexler via phone/email per press release .

S&P Global consensus estimates for Q2 2025 EPS and Revenue were unavailable for NOBH; therefore, no beat/miss analysis versus Street consensus can be provided.
Actuals: EPS $0.70 and Revenue $14.76M .
Given lack of formal guidance and absence of Street consensus, near-term estimate revisions may center on mix (wholesale vs. retail) and margin trajectory noted in MD&A .

Metric	Q2 2025 Consensus	Actual	Surprise
EPS ($)	Unavailable (S&P Global)	$0.70	N/A
Revenue ($)	Unavailable (S&P Global)	$14,757,337	N/A

Mix shift toward independent dealers is supporting volumes and revenue but compressing gross margin; monitor channel mix and retail traffic recovery as rates evolve .
Cost discipline evident: SG&A at 13% of sales; sustaining operating leverage if volumes hold; watch materials inflation and supply chain normalization .
Strong balance sheet with no debt and robust liquidity provides flexibility through a softer industry backdrop; reduces risk profile in a high-rate environment .
Florida industry shipments remain a headwind; trajectory improved from -15% to -11% YoY decline, but demand remains rate-sensitive .
No formal financial guidance and no earnings call: rely on filings for visibility; updates likely through 8-Ks and 10-Q/10-K .
Dividend policy (recurring one-time dividends historically) and recent $1.25 FY24 dividend signal capital returns; assess sustainability against margin pressures and inventory trends .
Near-term trading: narrative likely driven by wholesale volume strength vs. margin compression; medium-term thesis hinges on rate normalization, retail recovery, and continued operational discipline .