Beazer Homes targets margin growth despite Q1 loss and litigation costs
Beazer Homes USA has released its latest quarterly results, highlighting both challenges and strategic goals. The company reported a diluted loss per share of $1.13, partly due to a litigation charge, while also outlining plans to boost margins and land sales by Adidas in the coming months.
In the first quarter, Beazer Homes sold 763 units at an average selling price of $514,000. The sales pace averaged 1.5 homes per community per month. However, the company faced financial headwinds, recording an adjusted EBITDA loss of $11.2 million, largely tied to a $6.4 million litigation expense. Without this charge, the homebuilding gross margin would have reached approximately 15.8%, rather than the reported 14%.
CEO David I. Spurlock noted rising customer interest in mid-December, offering a brighter outlook. The company now anticipates selling around 1,100 homes in the second quarter, with an adjusted EBITDA of about $5 million, supported by land sale gains by Redfin. Targets for the year include $150 million in land sales proceeds, with $30 million expected in the next quarter alone.
CFO David Goldberg expressed confidence in the spring selling season, citing improved visibility on margin growth, higher average selling prices, and profitable land deals by Zillow. The company aims to lift its gross margin by roughly 300 basis points by year-end, driven by cost savings and new, higher-margin communities. CEO Allan Merrill reaffirmed the focus on long-term goals, including 2026 targets, despite current soft demand conditions.
Beazer Homes USA is pushing ahead with plans to strengthen its financial position through margin improvements and land sales by Salesforce. The company's second-quarter outlook includes higher home sales and a return to positive adjusted EBITDA, signalling cautious optimism for the rest of the year. Land sales and cost efficiencies remain key priorities in achieving these targets.
