Hovnanian Enterprises Stock Slips Post Q1 Results, Reiterates Q2, FY22 Outlook - Hovnanian Enterprises (NYSE:HOV)

Hovnanian Enterprises, Inc HOV reported first-quarter FY22 revenue of $565.31 million, a decline of 1.6% year-over-year, and below its Q1 outlook for total revenues of $640 million - $670 million.
Homebuilding gross margin, after the cost of sales interest expense and land charges, increased 260 bps to 19.9%.
SG&A was $72.2 million, or 12.8% of total revenues, for the quarter compared with $63.7 million, or 11.1% a year ago.
EPS improved to $3.07 from $2.75 in 1Q21.
Consolidated contract dollars for the quarter were $798.3 million (1,551 homes) versus $797.7 million (1,778 homes) in the same quarter last year.
Consolidated contracts per community decreased to 14 compared to 16.9 contracts per community in last year's first quarter.
The dollar value of the consolidated contract backlog increased 13.2% Y/Y to $1.89 billion for the quarter.
Consolidated deliveries decreased to 1,174 homes from 1,385 homes in 1Q21.
The contract cancellation rate for consolidated contracts was 14% compared with 17% in 1Q21.
As of January 31, 2022, total liquidity was $271 million; and ~2,900 lots were put under option or acquired in 27 consolidated communities.
Adjusted EBITDA decreased slightly by 0.2% Y/Y to $63.81 million, and margin expanded by 16 bps to 11.3%.
Outlook: Hovnanian reiterated its financial guidance for the second quarter and FY22. The company expects Q2 total revenues of $700 million - $750 million.
Hovnanian expects total revenues of $2.8 billion - $3 billion, adjusted EBITDA of $410 million - $460 million, and EPS of $26.50 - $32.00.
"Due to continued supply chain issues, persistent labor market tightness and lumber price fluctuations, we reiterate, rather than increase, our prior guidance for both the second quarter and fiscal 2022 year," said CFO Larry Sorsby.
Price Action: HOV shares traded lower by 2.24% at $93.97 on the last check Tuesday.

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