On July 30, 2024, LGI Homes Inc (LGIH, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. The company, known for its design, construction, and sale of new homes, reported earnings per share (EPS) of $2.48, surpassing the analyst estimate of $2.22. Additionally, LGI Homes Inc (LGIH) achieved revenues of $602.5 million, slightly below the estimated $625.20 million.
Company Overview
LGI Homes Inc (LGIH, Financial) is engaged in the design, construction, and sale of new homes across various markets. The company offers entry-level homes, move-up homes, and luxury series homes under the LGI Homes and Terrata Homes brands. With seven operating segments aggregated into five reportable segments, the majority of the revenue is generated from the Central division segment.
Q2 2024 Financial Highlights
LGI Homes Inc (LGIH, Financial) reported several key financial metrics for the second quarter of 2024:
- Home sales revenues: $602.5 million
- Home closings: 1,655
- Average sales price per home closed: $364,047
- Gross margin: 25.0%
- Adjusted gross margin (non-GAAP): 27.0%
- Net income before income taxes: $76.9 million
- Net income: $58.6 million, or $2.49 basic EPS and $2.48 diluted EPS
Performance Analysis
LGI Homes Inc (LGIH, Financial) demonstrated robust performance in Q2 2024, with a notable increase in gross margin to 25.0%, up 300 basis points from the previous year. The adjusted gross margin also improved to 27.0%, reflecting the company's ability to manage cost inflation and mortgage buydown incentives effectively. The company’s pre-tax profit margin rose to 12.8%, indicating strong profitability.
“We delivered solid results in the second quarter, including continued growth in our community count and outstanding profitability metrics that exceeded the high end of our guidance,” said Eric Lipar, Chairman and Chief Executive Officer of LGI Homes.
Financial Achievements and Challenges
LGI Homes Inc (LGIH, Financial) achieved significant milestones, including a record number of active selling communities, which reached 128 by the end of June 2024. The company’s ability to increase prices and open more self-developed, higher-margin communities contributed to its strong financial performance. However, challenges such as cost inflation and mortgage buydown incentives remain, which the company has managed effectively so far.
Income Statement and Balance Sheet Highlights
Key details from the income statement and balance sheet include:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Home Sales Revenues | $602.5 million | $645.3 million |
| Net Income | $58.6 million | $53.1 million |
| Basic EPS | $2.49 | $2.26 |
| Total Assets | $3.70 billion | $3.41 billion |
Outlook and Future Guidance
Based on the strong performance in the first half of 2024, LGI Homes Inc (LGIH, Financial) has updated its full-year guidance. The company now expects to close between 6,400 and 7,200 homes at an average selling price of $360,000 to $370,000. The gross margin is projected to be between 23.5% and 24.5%, with an adjusted gross margin of 25.5% to 26.5%.
“Our strong second quarter results are a testament to the focused execution of our teams and our success at managing affordability challenges while still delivering outstanding margins that reflect our commitment to increasing profitability and driving higher returns,” concluded Mr. Lipar.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from LGI Homes Inc for further details.
