Hovnanian Enterprises, Inc. has reported its fiscal 2025 second quarter results, revealing a mix of increases and decreases in various financial metrics compared to the prior year. Total revenues decreased by 3.1% to $686.5 million in the second quarter of fiscal 2025, while for the six months ended April 30, 2025, total revenues increased by 4.4% to $1.36 billion compared with the same period in the prior year.
The sale of homes revenues from domestic unconsolidated joint ventures increased by 21.4% in the second quarter of fiscal 2025, reaching $144.5 million. However, the homebuilding gross margin percentage, after cost of sales interest expense and land charges, decreased to 13.8% for the three months ended April 30, 2025, compared with 19.5% in the second quarter of the previous year. Similarly, the homebuilding gross margin percentage, before cost of sales interest expense and land charges, decreased to 17.3% during the fiscal 2025 second quarter compared with 22.6% in the same quarter of the prior year.
Total SG&A was $80.6 million, or 11.7% of total revenues, in the second quarter of fiscal 2025 compared with $79.0 million, or 11.2% of total revenues, in the second quarter of fiscal 2024. Total interest expense as a percent of total revenues decreased to 4.2% for the second quarter of fiscal 2025 compared with 4.3% for the second quarter of fiscal 2024.
Income before income taxes for the second quarter of fiscal 2025 was $26.5 million compared with $69.4 million in the second quarter of the prior fiscal year. Net income was $19.7 million, or $2.43 per diluted common share, for the three months ended April 30, 2025, compared with net income of $50.8 million, or $6.66 per diluted common share, in the same period of the previous fiscal year.
The company reported that as of April 30, 2025, consolidated community count increased by 14.7% to 125 communities compared with the same period in the prior year. However, the dollar value of consolidated contract backlog decreased by 12.5% to $988.2 million compared with the previous year.
In terms of liquidity and inventory, total liquidity as of April 30, 2025, was $202.4 million, while land and land development spending increased by 1.4% to $467.4 million for the first half of fiscal 2025 compared with the same period in the prior year.
Hovnanian Enterprises provided financial guidance for the third quarter of fiscal 2025, with expectations for total revenues between $750 million and $850 million and adjusted homebuilding gross margin between 17.0% and 18.0%.
Hovnanian Enterprises reported that it redeemed early the remaining $26.6 million of the 13.5% senior notes that were scheduled to mature in February of 2026 and repurchased 126,448 shares of common stock, or 2.4% of class A common stock as of January 31, 2025, for $12.2 million.
As a result of these announcements, the company's shares have moved -11.24% on the market, and are now trading at a price of $97.5001. For more information, read the company's full 8-K submission here.
