LGI Homes, Inc. (NASDAQ: LGIH) has released its financial results for the third quarter of 2024 and the nine months ended September 30, 2024. The company reported an increase in home sales revenues by 5.6% to $651.9 million for the third quarter, with a 0.3% increase in home closings to 1,757 homes. The average sales price per home closed also rose by 5.2% to $371,004.
However, the gross margin as a percentage of home sales revenues decreased by 60 basis points to 25.1% for the third quarter. Despite this, the adjusted gross margin as a percentage of home sales revenues remained steady at 27.2% in both comparable periods.
Net income before income taxes saw a 2.7% increase to $91.9 million, while net income increased by 3.8% to $69.6 million, resulting in basic EPS of $2.96 and diluted EPS of $2.95.
Looking at the nine months ended September 30, 2024, home sales revenues decreased by 6.0% to $1.6 billion, with home closings decreasing by 9.6% to 4,495 homes. The average sales price per home closed increased by 4.0% to $366,007.
The gross margin as a percentage of home sales revenues for the nine months increased by 190 basis points to 24.7%, and the adjusted gross margin also saw an increase of 220 basis points to 26.7%. However, net income before income taxes decreased by 0.7% to $191.8 million, and net income decreased by 1.3% to $145.2 million, resulting in basic EPS of $6.17 and diluted EPS of $6.15.
It's worth noting that the company's active selling communities at September 30, 2024, stood at 138, with an ending backlog of 1,088 homes valued at $417.8 million. The total owned and controlled lots at September 30, 2024, amounted to 68,564.
On the balance sheet front, LGI Homes reported total liquidity of $375.4 million at September 30, 2024, including cash and cash equivalents of $60.9 million and $314.5 million of availability under the company’s revolving credit facility. The net debt to capitalization ratio was 42.7% at September 30, 2024.
In response to the results, Eric Lipar, Chairman and CEO of LGI Homes, commented on the company's operational excellence and profitability focus that led to a strong third quarter performance. He highlighted the increase in revenue, the growth in community count, and the disciplined approach to pricing and incentives that enabled the delivery of improved gross margins.
Looking ahead, the company updated its full-year guidance for 2024, expecting to close between 6,100 and 6,400 homes. LGI Homes also increased the range of its gross margin and adjusted gross margin guidance by 50 basis points at both the low and high ends of the prior ranges.
As the housing market continues to face near-term headwinds, LGI Homes remains committed to investing in the long-term growth of its business and delivering profitability-focused results for its stockholders. As a result of these announcements, the company's shares have moved 6.7% on the market, and are now trading at a price of $110.45. For more information, read the company's full 8-K submission here.
