Q2 2026 Hovnanian Enterprises Inc Earnings Call Transcript
Key Points
- Hovnanian Enterprises Inc (HOVNP.PFD) delivered solid execution in a choppy demand environment, meeting or exceeding nearly all targeted metrics, including a significant outperformance in adjusted gross margin.
- The company generated total revenues of $668 million, close to the midpoint of their projected range, with an adjusted gross margin of 14.3%, exceeding the upper end of their forecast.
- Adjusted EBITDA reached $41 million, coming in above the projected range, and adjusted pre-tax income totaled $9 million, landing at the top end of the forecasted range.
- The company has reduced its quick move-in inventory by 37% year-over-year, which has allowed for a more balanced inventory level and improved margins.
- Hovnanian Enterprises Inc (HOVNP.PFD) ended the second quarter with $442 million in liquidity, well above their target range, reflecting a disciplined approach to capital and land management.
- Total revenues declined 3% year-over-year, primarily due to a 12% decrease in home deliveries amid a more competitive selling environment.
- Adjusted gross margin was lower than a year ago, largely due to higher incentives used to support affordability and sustained sales pace.
- The company experienced a $1 million loss from unconsolidated joint ventures, reflecting startup costs ahead of first deliveries in several joint venture communities.
- The sales environment remains volatile, with fluctuations in monthly contracts per community due to a volatile housing market and shifts in consumer confidence.
- The company faces challenges in opening new communities timely due to various reasons, impacting community count growth.
Good morning and thank you for joining us today for Hovnanian Enterprises fiscal 2026 second quarter earnings conference call. (Operator Instructions) This conference is being recorded for a broadcast and all participants are currently in a listen-only mode.
Management will make some opening remarks about the second quarter results and then open the line for questions. The company will also be webcasting a slide presentation along with the opening comments from management. The slides are available on the investors page of the company's website at www.khov.com. Those listeners who would like to follow along should now log on to the website.
I would like to turn the call over to Jeff O'Keefe, Vice President, Investor Relations. Jeff, please go ahead.
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Thank you, [Didi], and thank you all for participating in this morning's call to review the results for our second quarter. All statements in
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