“We are pleased with our first quarter results, which met or exceeded our expectations across nearly every metric,” said
“In the first quarter, we delivered a total of 916 homes. 881 home closings contributed to revenue of
“Our teams remained focused on driving leads, managing inventory, and executing on sales initiatives that directly contributed to ending the quarter with 1,699 homes in backlog, up 63.4% compared to the same period last year and 21.9% sequentially.
“The performance to date in 2026 reinforces our confidence in the full-year guidance we shared on our last call. Additionally, based on first quarter margins exceeding our previous guidance range, we are raising full year gross margin guidance to between 18.5% and 20.5% and adjusted gross margin between 22.0% and 24.0%.”
First Quarter 2026 Highlights
- Home sales revenues of
$319.7 million - Home closings of 881
- Total home closings of 916, including 35 currently and previously leased homes
- Average sales price per home closed of
$362,924 - Gross margin as a percentage of home sales revenues of 18.7%
- Gross margin excluding inventory impairment* as a percentage of home sales revenues of 20.2%
- Adjusted gross margin* as a percentage of home sales revenues of 23.4%
- Net income before income taxes of
$4.3 million - Net income of
$2.2 million or$0.09 basic EPS and$0.09 diluted EPS - Adjusted net income* of
$5.6 million , or$0.24 adjusted basic EPS* and$0.24 adjusted diluted EPS*
*Please see “Non-GAAP Measures” for a reconciliation of Gross Margin Excluding Inventory Impairment (a non-GAAP measure) and Adjusted Gross Margin (a non-GAAP measure) to Gross Margin, and Adjusted Net Income (a non-GAAP measure) to Net Income, the most directly comparable GAAP measures and for calculations of adjusted basic EPS and adjusted diluted EPS.
Balance Sheet Highlights
- Total liquidity of
$355.0 million atMarch 31, 2026 , including cash and cash equivalents of$60.9 million and$294.2 million of availability under the Company’s revolving credit facility - Net debt to capital ratio* of 44.0% at
March 31, 2026
*Please see “Non-GAAP Measures” for a reconciliation of net debt to capital ratio (a non-GAAP measure) to debt to capital ratio, the most directly comparable GAAP measure.
Full Year 2026 Outlook
Subject to the caveats in the Forward-Looking Statements section of this press release and the assumptions noted below, the Company is updating its gross margin and adjusted gross margin as a percentage of home sales revenues outlook for the full year 2026 and reiterating its other outlook items for the full year 2026. Currently, the Company expects for full year 2026:
- Home closings between 4,600 and 5,400
- Active selling communities at the end of 2026 between 150 and 160
- Average sales price per home closed between
$355,000 and$365,000 - Gross margin as a percentage of home sales revenues between 18.5% and 20.5%, adjusted for estimated capitalized interest and estimated purchase accounting of approximately 3.5%, which results in Adjusted gross margin (non-GAAP) as a percentage of home sales revenues between 22.0% and 24.0%
- SG&A as a percentage of home sales revenues between 15.0% and 16.0%
- Effective tax rate of approximately 26.5%
This outlook assumes that general economic conditions, including input costs, materials, product and labor availability, interest rates and mortgage availability, in the remainder of 2026 are similar to those experienced to date in 2026 and that the average sales price per home closed, construction costs, availability of land and land development costs for the remainder of 2026 are consistent with the Company’s recent experience. In addition, this outlook assumes that governmental regulations relating to land development and home construction are similar to those currently in place and does not take into account any additional changes to
Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at
Participants may access the live webcast by visiting the Investor Relations section of the Company’s website at https://investor.lgihomes.com.
An archive of the Earnings Call webcast will be available for replay on the Company’s website for one year from the date of the Earnings Call.
About
Headquartered in
Forward-Looking Statements
Any statements made in this press release or on the Earnings Call that are not statements of historical fact, including statements about the Company’s beliefs, outlook and expectations, are forward-looking statements within the meaning of the federal securities laws, and should be evaluated as such. Forward-looking statements include information concerning expected 2026 home closings, active selling communities, average sales price per home closed, gross margin as a percentage of home sales revenues, adjusted gross margin as a percentage of homes sales revenues, SG&A as a percentage of home sales revenues and effective tax rate, as well as market conditions and possible or assumed future results of operations, including descriptions of the Company’s business plan and strategies. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “will” or, in each case, their negative, or other variations or comparable terminology. For more information concerning factors that could cause actual results to differ materially from those contained in the forward-looking statements, please refer to the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the fiscal year ended
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share data) | ||||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 60,860 | $ | 61,247 | ||||
| Accounts receivable | 45,011 | 32,467 | ||||||
| Real estate inventory | 3,540,731 | 3,520,563 | ||||||
| Pre-acquisition costs and deposits | 24,970 | 28,950 | ||||||
| Property and equipment, net | 124,805 | 107,145 | ||||||
| Other assets | 192,849 | 154,948 | ||||||
| Deferred tax assets, net | 8,921 | 9,904 | ||||||
| 12,018 | 12,018 | |||||||
| Total assets | $ | 4,010,165 | $ | 3,927,242 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 38,569 | $ | 16,179 | ||||
| Accrued expenses and other liabilities | 159,725 | 157,971 | ||||||
| Notes payable | 1,709,457 | 1,656,803 | ||||||
| Total liabilities | 1,907,751 | 1,830,953 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Common stock, par value | 278 | 277 | ||||||
| Additional paid-in capital | 351,272 | 347,308 | ||||||
| Retained earnings | 2,160,499 | 2,158,339 | ||||||
| (409,635 | ) | (409,635 | ) | |||||
| Total equity | 2,102,414 | 2,096,289 | ||||||
| Total liabilities and equity | $ | 4,010,165 | $ | 3,927,242 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share data) | ||||||||
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Home sales revenues | $ | 319,736 | $ | 351,420 | ||||
| Cost of sales | 259,807 | 277,707 | ||||||
| Selling expenses | 32,650 | 42,342 | ||||||
| General and administrative | 27,861 | 31,202 | ||||||
| Operating income (loss) | (582 | ) | 169 | |||||
| Other income, net | (4,901 | ) | (5,555 | ) | ||||
| Net income before income taxes | 4,319 | 5,724 | ||||||
| Income tax provision | 2,159 | 1,730 | ||||||
| Net income | $ | 2,160 | $ | 3,994 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.09 | $ | 0.17 | ||||
| Diluted | $ | 0.09 | $ | 0.17 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 23,149,912 | 23,396,470 | ||||||
| Diluted | 23,219,224 | 23,466,746 | ||||||
Home Sales Revenues, Home Closings, Average Sales Price Per Home Closed (ASP), Average Community Count, Average Monthly Absorption Rate, and Ending Community Count by Reportable Segment
(Revenues in thousands, unaudited)
| Three Months Ended | As of | |||||||||||||
| Reportable Segment | Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | ||||||||
| Central | $ | 89,160 | 296 | $ | 301,216 | 47.0 | 2.1 | 47 | ||||||
| Southeast | 72,323 | 219 | 330,242 | 29.7 | 2.5 | 29 | ||||||||
| Northwest | 37,006 | 66 | 560,697 | 14.3 | 1.5 | 15 | ||||||||
| West | 75,850 | 172 | 440,988 | 26.7 | 2.1 | 28 | ||||||||
| 45,397 | 128 | 354,664 | 23.0 | 1.9 | 23 | |||||||||
| Total | $ | 319,736 | 881 | $ | 362,924 | 140.7 | 2.1 | 142 | ||||||
| Three Months Ended | As of | |||||||||||||
| Reportable Segment | Revenues | Home Closings | ASP | Average Community Count | Average Monthly Absorption Rate | Community Count at End of Period | ||||||||
| Central | $ | 101,146 | 330 | $ | 306,503 | 51.0 | 2.2 | 50 | ||||||
| Southeast | 101,682 | 312 | 325,904 | 29.3 | 3.5 | 30 | ||||||||
| Northwest | 34,237 | 65 | 526,723 | 16.7 | 1.3 | 16 | ||||||||
| West | 66,956 | 159 | 421,107 | 25.7 | 2.1 | 25 | ||||||||
| 47,399 | 130 | 364,608 | 25.3 | 1.7 | 25 | |||||||||
| Total | $ | 351,420 | 996 | $ | 352,831 | 148.0 | 2.2 | 146 | ||||||
Owned and Controlled Lots
The table below shows (i) home closings by reportable segment for the three months ended
| Three Months Ended | As of | |||||||||||
| Reportable Segment | Home Closings | Owned (1) | Controlled | Total | ||||||||
| Central | 296 | 18,696 | 326 | 19,022 | ||||||||
| Southeast | 219 | 12,962 | 1,700 | 14,662 | ||||||||
| Northwest | 66 | 5,799 | 1,314 | 7,113 | ||||||||
| West | 172 | 8,610 | 3,286 | 11,896 | ||||||||
| 128 | 5,126 | 1,209 | 6,335 | |||||||||
| Total | 881 | 51,193 | 7,835 | 59,028 | ||||||||
(1) Of the 51,193 owned lots as of | ||||||||||||
Backlog Data
As of the dates set forth below, the Company’s net orders, cancellation rate and ending backlog homes and value were as follows (dollars in thousands, unaudited):
| Three Months Ended | ||||||||
| Backlog Data | 2026 (4) | 2025 (5) | ||||||
| Net orders (1) | 1,221 | 1,437 | ||||||
| Cancellation rate (2) | 45.6 | % | 16.3 | % | ||||
| Ending backlog – homes (3) | 1,699 | 1,040 | ||||||
| Ending backlog – value (3) | $ | 660,511 | $ | 406,166 | ||||
(1) Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period. (2) Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period. (3) Ending backlog consists of retail homes at the end of the period that are under a purchase contract that has been signed by homebuyers who have met preliminary financing criteria but have not yet closed and wholesale contracts with varying terms. Ending backlog is valued at the contract amount. (4) As of (5) As of | ||||||||
Non-GAAP Measures
In addition to the results reported in accordance with accounting principles generally accepted in
Adjusted Net Income, Adjusted Basic Earnings per Share, and Adjusted Diluted Earnings per Share
Adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines adjusted net income as net income less inventory impairment charges. The Company defines adjusted basic earnings per share as adjusted net income divided by weighted average basic shares outstanding. The Company defines adjusted diluted earnings per share as adjusted net income divided by weighted average diluted shares outstanding. Management believes that the presentation of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share provides useful information to investors because such measures isolate the impact that inventory impairment charges have on net income and earnings per share. However, because adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share exclude the inventory impairment charge, which has real economic effects and could impact the Company’s results, the utility of adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share in the same manner that the Company does. Accordingly, adjusted net income, adjusted basic earnings per share, and adjusted diluted earnings per share should be considered only as supplements to net income, basic earnings per share, and diluted earnings per share, respectively, as measures of the Company’s performance.
The following table reconciles adjusted net income to net income, which is the GAAP financial measure that management believes to be most directly comparable, and adjusted basic earnings per share and adjusted diluted earnings per share are calculated by dividing adjusted net income by basic or diluted weighted average shares outstanding, respectively (dollars in thousands, except earnings per share, unaudited):
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Net income | $ | 2,160 | $ | 3,994 | ||||
| Basic weighted average number of shares outstanding | 23,149,912 | 23,396,470 | ||||||
| Basic earnings per share | $ | 0.09 | $ | 0.17 | ||||
| Diluted weighted average number of shares outstanding | 23,219,224 | 23,466,746 | ||||||
| Diluted earnings per share | $ | 0.09 | $ | 0.17 | ||||
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Net income | $ | 2,160 | $ | 3,994 | ||||
| Inventory impairment | 4,681 | — | ||||||
| Tax impact due to above reconciling item | (1,225 | ) | — | |||||
| Adjusted net income | $ | 5,616 | $ | 3,994 | ||||
| Basic weighted average number of shares outstanding | 23,149,912 | 23,396,470 | ||||||
| Adjusted basic earnings per share | $ | 0.24 | $ | 0.17 | ||||
| Diluted weighted average number of shares outstanding | 23,219,224 | 23,466,746 | ||||||
| Adjusted diluted earnings per share | $ | 0.24 | $ | 0.17 | ||||
Gross Margin Excluding Inventory Impairment and Adjusted Gross Margin
Gross margin excluding inventory impairment and adjusted gross margin are non-GAAP financial measures used by management as supplemental measures in evaluating operating performance. The Company defines gross margin excluding inventory impairment as gross margin less inventory impairment charges. The Company defines adjusted gross margin as gross margin excluding inventory impairment, less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Management believes gross margin excluding inventory impairment and adjusted gross margin are useful because they isolate the impact that capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable) have on gross margin. However, because gross margin excluding inventory impairment and adjusted gross margin exclude capitalized interest, purchase accounting adjustments, and inventory impairment (as applicable), which have real economic effects and could impact the Company’s results, the utility of gross margin excluding inventory impairment and adjusted gross margin as measures of the Company’s operating performance may be limited. In addition, other companies may not calculate gross margin excluding inventory impairment and adjusted gross margin in the same manner that the Company does. Accordingly, gross margin excluding inventory impairment and adjusted gross margin should be considered only as supplements to gross margin as a measure of the Company’s performance.
The following table reconciles gross margin excluding inventory impairment and adjusted gross margin to gross margin, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Home sales revenues | $ | 319,736 | $ | 351,420 | ||||
| Cost of sales | 259,807 | 277,707 | ||||||
| Gross margin | $ | 59,929 | $ | 73,713 | ||||
| Inventory impairment | 4,681 | — | ||||||
| Gross margin excluding inventory impairment | $ | 64,610 | $ | 73,713 | ||||
| Capitalized interest charged to cost of sales | 9,976 | 8,267 | ||||||
| Purchase accounting adjustments (1) | 389 | 809 | ||||||
| Adjusted gross margin | $ | 74,975 | $ | 82,789 | ||||
| Gross margin % (2) | 18.7 | % | 21.0 | % | ||||
| Gross margin % excluding inventory impairment (2) | 20.2 | % | 21.0 | % | ||||
| Adjusted gross margin % (2) | 23.4 | % | 23.6 | % | ||||
(1) Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates. (2) Calculated as a percentage of home sales revenues. | ||||||||
Net Debt to Capital Ratio
Net debt to capital ratio is a non-GAAP financial measure used by management as a supplemental measure in understanding the leverage employed in the Company’s operations and as an indicator of its ability to obtain financing. The Company defines net debt to capital ratio as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. Management believes that the presentation of net debt to capital ratio provides useful information to investors regarding the Company’s financial leverage and its ability to meet long-term obligations. By excluding cash and cash equivalents from total debt, the ratio offers a clearer view of the Company’s capital structure and financial flexibility. Management uses this metric to monitor the Company’s capital efficiency and to evaluate the effectiveness of its capital management strategies over time. Other companies may define this measure differently and, as a result, the Company’s measure of net debt to capital ratio may not be directly comparable to the measures of other companies.
The following table reconciles net debt to capital ratio (a non-GAAP financial measure) to debt to capital ratio, which is the GAAP financial measure that management believes to be most directly comparable (dollars in thousands, unaudited):
| Total debt (Notes payable) | $ | 1,709,457 | $ | 1,656,803 | ||||
| Total equity | 2,102,414 | 2,096,289 | ||||||
| Total capital | $ | 3,811,871 | $ | 3,753,092 | ||||
| Debt to capital ratio | 44.8 | % | 44.1 | % | ||||
| Total debt (Notes payable) | $ | 1,709,457 | $ | 1,656,803 | ||||
| Less: Cash and cash equivalents | 60,860 | 61,247 | ||||||
| Net debt | $ | 1,648,597 | $ | 1,595,556 | ||||
| Total equity | 2,102,414 | 2,096,289 | ||||||
| Total net capital | $ | 3,751,011 | $ | 3,691,845 | ||||
| Net debt to capital ratio (1) | 44.0 | % | 43.2 | % | ||||
(1) Net debt to capital ratio is calculated as net debt (which is total debt minus cash and cash equivalents) divided by net debt plus total equity. | ||||||||
| CONTACT: | Executive Vice President, Investor Relations and Capital Markets (281) 210-2586 investorrelations@lgihomes.com |
