Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you explain why you are maintaining the current guidance despite strong business trends and high backlog conversion rates?
A: Dale Francescon, Co-Chief Executive Officer, explained that the decision to maintain guidance is due to the uncertainty surrounding future interest rates. Despite positive current trends, the company prefers a conservative approach due to unpredictable rate movements.
Q: What is the expected timeline for lots currently under contract to be ready for market, and what percentage of these are with third-party developers?
A: Robert Francescon, Co-Chief Executive Officer, noted that the timeline for lots ranges from immediately available finished lots to full development deals requiring third-party development. He emphasized the company's strategy to increase finished lot acquisitions to enhance capital efficiency.
Q: Are incentives expected to decline in the second quarter?
A: John Dixon, Interim Chief Financial Officer, indicated that while there was some pricing power in the first quarter due to the rate environment, recent rate volatility makes further reductions in mortgage incentives uncertain for the second quarter.
Q: How is the mix shift towards Century Complete impacting deliveries, and are there any affordability concerns affecting this trend?
A: John Dixon addressed that the lower percentage of Century Complete deliveries in the first quarter was due to timing and mix rather than affordability issues. He confirmed strong demand continues, particularly for entry-level homes priced significantly below average.
Q: Can you provide insights into the capital allocation strategy, particularly regarding share buybacks?
A: John Dixon explained that the primary focus is reinvesting in the business, with share buybacks being considered based on market conditions and stock price compared to book value. The company continues to prioritize growth and shareholder returns through dividends and strategic investments.
Q: What percentage of closings involved customers using mortgage rate buydowns, and how are rising rates affecting sales strategies?
A: John Dixon noted that over 75% of buyers utilize mortgage rate buydowns. Dale Francescon added that the company adjusts its offered rates in response to market changes to maintain a competitive edge, which so far has not significantly impacted sales pace.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.