Aug 5, 2026 earnings call — Homes Direct acquisition and steady Q1 results
Champion closed the Homes Direct acquisition Aug 1 and reported net sales of $710.2 million for Q1.
Revenue $0.7B (est $0.7B) · EPS $0.88 (est $0.87)
Key quotes
"The transaction closed on August 1, and we are honored to formally welcome the Homes Direct team to Champion."
"Manufacturing capacity utilization during the quarter was 62%, up from 59% sequentially and up 1 percentage point compared to the same period last year."
"The 21st Century ROAD to Housing Act recently passed both chambers of Congress with overwhelming bipartisan support, becoming law on July 10."
Analyst Q&A 6
Retail traffic, production, and average prices
Q (CJS): They asked for the recent cadence of retail traffic and orders through May, June and early Q2/July. They also asked where production is being increased and why ASPs ticked lower and expectations for the next quarters.
A: Management said they saw good momentum in the quarter, reflected in backlog growth, with traffic both digital and in stores and strength at independent dealers. They are ramping production in key markets plant-by-plant based on backlog and market conditions and will continue through Q2. On ASPs, they said pricing actions helped but channel mix (more community and independent sales) and a shift to more base models in multi-sections pressured ASPs; they expect ASPs sequentially higher next quarter and roughly flat year-on-year with quarter-to-quarter variation.
"Yes, we saw good momentum through the quarter, and that's reflected in our backlog growth and certainly our outlook for Q2, and that traffic was both digitally as well as through the stores." — Timothy Larson (CEO)
Homes Direct, HUD timing, chassis removal
Q (Philip Ng · Jefferies): He asked whether the Q2 guide included Homes Direct and how Homes Direct will ramp and integrate. He also asked about timing and effects of HUD rulemaking and chassis removal on demand and product.
A: They said the Q2 guide is all organic and does not include Homes Direct. Homes Direct did about $70 million in sales and has 11 locations; one was next to their Chandler facility and the other 10 operate like traditional dealers, and they expect it to ramp as they migrate other manufacturers' products to theirs. On HUD, the rulemaking takes time with engineering, specification, transport and set-and-finish issues and comment periods, so they do not expect an immediate FY '27 impact and see adoption as gradual.
"That process, as you can imagine, takes time and there's engineering involved in really defining the product specs and also how does it affect transport and set and finish, things that we need to make sure that are ready to be able to comply with the code and the execution." — Timothy Larson (CEO)
Backlog target and gross margin headwind
Q (John Lovallo · UBS): He asked why the company targets a 4–12 week backlog and what is the optimal level. He also asked whether the 2Q gross margin headwind is mainly from input cost inflation or other factors.
A: They said the 4 to 12 week backlog range is plant-by-plant and set with customers to match project timing and set-and-finish needs; it allows planning of labor and avoids unnecessary overtime. On the gross margin headwind, they said it is all due to elevated input costs that have started to level off at a higher rate, and they expect mitigation from pricing and manufacturing efficiency to accelerate in Q2.
"Yes. Thanks. I think it's all on the elevated input costs as we think about it." — David McKinstray (CFO)
Standardization versus flexible design; customers' needs
Q (Matthew Bouley · Barclays): He asked how to balance standardization in manufacturing with new design flexibility after chassis removal and how the company is influencing rulemaking. He also asked what institutional and builder-developer customers will want.
A: They said a national HUD code lets them use national product specs with some local variation, which aids broader off-site build adoption versus modular. During rulemaking they will push for as much standardization as possible while still meeting customer expectations to help execution. Conversations with builder-developers are strategic; some customers will keep chassis and others will use off-chassis, so they will support both and expect opportunities where HUD-style homes can meet zoning needs.
"Part of what we do during the rulemaking is to help make sure that there are as much standardization as possible while still delivering on what the customer is going to expect." — Timothy Larson (CEO)
Where sales grew and mix effects on ASP
Q (Jackson Schroeder · Craig-Hallum): He asked which geographies saw growth and what drove the outperformance, and whether competitive dynamics influenced ASPs. He also asked if the shift to base models is lasting or temporary.
A: They said shipments increased in Texas, Florida, Mississippi and Alabama, with weakness in the West and parts of the Midwest. Competition is about earning customers each month with the right home at the right price, and the ASP decline was mainly from more community and independent orders (wholesale) versus captive retail. The shift to base models reflects consumer choices and channel mix and may normalize as consumer health strengthens; they are positioned across a range of products to ladder up.
"In terms of geographies, we saw obviously some increased shipments in Texas, Florida, Mississippi, Alabama, those states, a little weaker in the West and parts of the Midwest during the first quarter." — Timothy Larson (CEO)
Pricing mix and SG&A outlook
Q (Jesse Lederman · Zelman): He asked whether mix headwinds were larger than expected and what else deviated. He also asked about like-for-like pricing power and details on SG&A run rate before Homes Direct and how SG&A will trend after integration.
A: They said the mix headwind was a bit larger than they initially anticipated and they have taken pricing actions, noting that wholesale averages about $85,000 versus captive at $140,000, $150,000, so channel mix can move ASPs materially. SG&A has been roughly 16% to 17% of sales and much is variable, so SG&A dollars rise with sales; Homes Direct will add to SG&A and is larger than Iseman in sales. Over time they expect to gain leverage on the fixed portion of SG&A, which should lower SG&A as a percent of sales while absolute SG&A dollars increase, and they are investing in IT and people.
"So we've been pretty consistent in the 16% to 17% of sales." — David McKinstray (CFO)