On July 24, 2024, Taylor Morrison Home Corp (TMHC, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Taylor Morrison Home Corp is an American residential construction company engaged in residential homebuilding and the development of lifestyle communities. It designs, builds, and sells single and multi-family detached and attached homes in traditionally high growth markets for entry-level, move-up, and resort lifestyle buyers. The company has four reportable segments: East, Central, West, and Financial Services, with the majority of its revenue derived from its East Segment.
Performance Overview
For Q2 2024, Taylor Morrison Home Corp reported net income of $199 million, or $1.86 per diluted share, and adjusted net income of $211 million, or $1.97 per diluted share. This exceeded the analyst estimate of $1.79 per share. However, the company’s total revenue for the quarter was $1.99 billion, falling short of the estimated $2.04 billion and reflecting a 3.4% decrease compared to the same period last year.
Key Financial Achievements
Despite the revenue shortfall, Taylor Morrison Home Corp achieved several notable financial milestones:
- Home closings revenue, net, was $1.92 billion, a 3.8% decrease from Q2 2023.
- Home closings gross margin was $457.4 million, down 5.2% from the previous year, with a slight decrease in gross margin percentage from 24.2% to 23.8%.
- SG&A expenses increased by 7.1% to $196.7 million, representing 10.2% of home closings revenue, up from 9.2% in Q2 2023.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenue | $1,991,053 | $2,060,564 | (3.4%) |
| Home Closings Revenue, net | $1,920,127 | $1,996,747 | (3.8%) |
| Home Closings Gross Margin | $457,421 | $482,510 | (5.2%) |
| SG&A | $196,735 | $183,683 | 7.1% |
Balance Sheet and Cash Flow
As of June 30, 2024, Taylor Morrison Home Corp reported total assets of $9.1 billion, up from $8.7 billion at the end of 2023. The company’s cash and cash equivalents stood at $246.8 million, a significant decrease from $798.6 million at the end of 2023. Real estate inventory increased to $6.3 billion from $5.5 billion, reflecting ongoing investments in land and development.
Company Commentary
“In the second quarter, our team delivered solid results, highlighted by both our closings volume and home closings gross margin exceeding our expectations. Following this strength, we now expect to deliver between 12,600 to 12,800 homes this year at a home closings gross margin around 24%,” said Sheryl Palmer, Taylor Morrison Chairman and CEO.
Analysis and Outlook
Taylor Morrison Home Corp’s performance in Q2 2024 demonstrates resilience in a challenging market environment. The company’s ability to exceed earnings expectations while managing costs effectively is a positive indicator for investors. However, the decline in revenue and gross margin highlights the competitive pressures and market dynamics in the homebuilding industry.
Looking ahead, Taylor Morrison Home Corp’s diversified consumer and geographic strategy positions it well to capitalize on healthy demand and pricing resiliency. The company’s focus on delivering well-qualified homebuyers with appropriate product offerings in prime community locations is expected to drive continued growth and profitability.
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Explore the complete 8-K earnings release (here) from Taylor Morrison Home Corp for further details.
