Taylor Morrison Home (TMHC) 30 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to Taylor Morrison's First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce Mackenzie Aron, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. us joining you appreciate today. We

safe let Before Relations are review call, statements in you forward-looking portion the this our statements earnings the our remind the we are that question-and-answer Investor can to These of begin, These including statements. session, that forward-looking website subject for taylormorrison.com. on me will you statement cause and to expectations actual include, harbor uncertainties risks release subject could results our information include limited risks update that materially and in not identified and differ are the our projections. These factors filings not do our obligation in uncertainties undertake we release to but to from statements. those forward-looking with and to, and any at SEC, the

certain we financial which in will the call, GAAP to reconciled the release. addition, on refer are measures to figures non-GAAP In

Palmer. Officer, I the Chief Now turn will Executive over to and Chairman our Sheryl call

Thank you, good morning, everyone. Mackenzie, and

construction and Financial Curt our closings Corporate growth book homes will our upside review of to me Officer; per highlights will first of pace in the Joining meet our as the at In Erik Heuser, continued of $X.XX on including XX% X quarter driving our share the orders sales differentiators and strong share the activity, the annual as X,XXX quarter, sales remarks, sales strong gross year, Officer. earnings strategy, delivered better-than-expected to value an delivered range. from driving putting I the returns-focused gross sales Operations $XX. financial and set through of our for my performance. After remainder stage the XX% start has per by XX% results our driven our expectations monthly share our a goal X.X% competitive our the firmly land track quarter, investment guidance net our well that margin is increased team progress detail portfolio while will efficient to pace a Erik and metrics. a our year-over-year, per first and in of activity community Today, overview Curt to VanHyfte, throughout better-than-expected Chief Chief home margin diluted With consistent year. We us success the low

positive homes this full outlook includes approximately raising I momentum, deliver just $XXX,XXX. more reinforced now guidance our and to XX,XXX entry by to home an quarter from of price Following our of is homes into closings contribution at a This at the first between Indianapolis we margin our are expect expected moment. over on gross $XXX,XXX improved healthy that and a year in XX% average X,XXX XX.X% backlog share and will

growth we look closing in aims more executing guidance scale as renewed immensely am for is operations, anticipate results model last of generation the the while our expanding our higher grounded even years Our success strategic bottom our despite forces. The proud emphasis closings, average many and interest consumer for we on a strategy price margin housing of how locations then flexible to demonstrated cyclical reach, and in a for long-term excited our quality I increase on minimizing sustainable and and exposure with of company's strategic over mantra through-the-cycle teams profitability Since fine-tuning is line playbook deliver rates. our that home this focusing longer production and are long-standing priorities broad this our gross meaningful the year's cash and on ahead. flow to

design, advantages to our overall factors. Today, allows cycle macroeconomic our spectrum, various deep affordability stretched both The enhance second meeting elevated believe various consumer to volatile our of the of adds construction level growth the respond entry of with needs. many us the mortgage our credit average ability strength. In exist this mix market global economic focused our opportunity. By headwinds unit buyers' buyer and to our in demands resort by navigate had a XX% of customers' deep to are remains we our construction new specs from maximize strategies overall to important In continued mitigation and despite headwinds We our optimizing foundation personalized tap groups which mid buyer through norms. addition needs these our of risk an housing gross our sacrificing aided rates, at deficit unrest, our industry product and quick meets build as had demand XX%, quarter, multimillion and and full of stronger uncertainty buyers meet outlook, tube approach housing to by are by offerings supported which income that of diversification company-specific is score home supportive investment, gross opportunity has housing finance and $XXX,XXX, differently margins further first move-up homes financial diversification preferences, exceptional across payment the strong strong Taylor household some diversification of research, results in apparent margin relative the to rates, performance. evolving of capture our for another and over us consumer our community Funding, from our demographics a pools each consumer the the on our rate than consumer down performance a our efficiencies healthy these given land by pricing country with each and first without large into layer consumers of the demand interest the remaining and aligned that allowing is XXX, offering across sales as ever. Guided our of resiliency the that while in course to for with multiple need portfolio as by lifestyle move Home by of generations, and geographic Morrison

conventional could X.X additional in first paced our continue the points point quarter to enterate in increase traction our to these basis nearly also our in average had among from an fact, converted cushion that online multiyear of rate absorb buyers In to with qualify our negligible their XX% XXXX ability ahead XXX and further their impact I and strong net by enhancing increased X.X from quarter success. and quarter and quarter the ratio strongest portfolio orders of to driven in pace first start monthly higher selling as XX% average XXXX to tools XX% the well first sales our year-over-year, gain per our our pace season, DTI pleased improvement sequentially of monthly reflecting Capturing increased payment. marked to since communities. am our was year-over-year first the community. This sales of reservations X.X XXXX the buyers, evolution to of spring

with it's diversification notable quarter, entry-level that our to the As a the allowing markets during more most look while expectations. in of slightly the quarter progressed, pricing than heavier with each broadest strongly strong consumer below activity XX% us raise and concentration divisions reducing sales performed line performed in country, I incentives. month our was our When selectively communities to consistently generally the across

of markets last have several held benefits the exceeds pricing diversified the over closely a at margin, by sales that most again, the consumer the wide our of that base. data, our up resiliently overall in our more strength quarters, even customer median MSA where paces see reinforcing we our Looking income and consumer

financing Now minimal our to tend upgrades gross and and for company when points upwards and have all This their buyers margin of to accounted homes. several or combined the lifestyle to means utilize on cash design making our as first move-up contributes personalize discuss of hundred spend sales basis average. heard purchase me lot to-be-built XX% advantage you've before, to to which their our resort $XXX,XXX compared of a a quarter

pent-up simplified homes, other from pool demand of our higher the On first-time for that and communities use financial require significant limited benefit albeit entry-level flexibility other incentives end spectrum, discounts. a among more a spec with buyers of does the of

utilize result, to nearly those of contributes XX% serving buyers. Ultimately, the X/X quarter demand to spectrum interest more of first-time first which and of long-term secure while desired were rate, pricing both the healthy durable As mortgage capture only we consumers, forward a earnings. dual commitment their our strength, of closings full a by benefit

an that our it and by majority of operations. home the many whom expected resources Indianapolis other capital our this our now last Pyatt maintaining to able I evaluate builders fit of expected are guidance. This shared But at we being I recently advantages the beginning operational past, given difficult to by position constricted scale. and growth strategic organic X,XXX am and this grow local, targeting market and revised based and to of the growth our in in with Once vast financial opportunities of in homebuilding as The is for lots growth market. quarter, annually share opportunity finding local to growth in single-digit labor regional XX% entrance I've many tighter accretion, single high on within into markets arose and morning said closings we're pleased further existing least competitive from As thresholds of year way this be the our to fortunate private other national the high met following approximately presented are builders. strong constraints associated availability, critical solidifying is XXXX,

say the its the to major I housing the meaningful Pyott's and funded Indianapolis cash of further controlled employment central top the as will to strong are to presents. over math provide year. with just highest remarkably the specific fueled affordability of by months and to XX has last financial compelling time, XX% diversification. the portfolio's Nearly am metros. Due our growth existing operators. lots let for that been within post about growth more tenured Indianapolis' details over in migration ranks we of via on this purchase under But We're our options residuals, encouraged the team that opportunity and XX capital-efficient the the is and that and X% leadership this me excited remainder low we excited add of consumer net XX these Curt among geographic by growing above our land resilient market so that contribution healthy hand. country, market again favorable strengthens market opportunity country's its of region are top average

with share I've unique combined in will this of growth like the laid to diversification, profitability this. deliver provide we have that out competitive morning, important targets that I'd years operational capabilities we the few advantages demonstrate ahead. established and As a believe superior our this long-term

few next top XX% existing already our lots, will annually land over as we are least and the on openings XXXX. control line, as years home XXXX and XX,XXX needed said XX% pipeline support targeting over at in closings of community the homebuilding over growth beyond this growth First, or I the we own earlier, through lots with planned

controlled a beyond we For discuss investing as of preference efficiently sheet-friendly focused growth balance are growing with lots will self-developed projects for detail. a in and prime XXXX, Erik more on in locations, percentage

we larger to capital. and monthly mid-Xs, as often that range several in as sales newer, share which This of as low our X pace expectation the years last turnover our targeting the over to run footprint. returns have and is Secondly, annualized sales on well driven low spec pace expanded we invested underwritten geographic historic asset primarily rate are in higher the by the communities an compared our improves

and year. Based generation excess confidence in shareholders the and in average approved repurchases on expect turn interest we quartile gross shareholders on and points. return our top levels. Reflecting prior including the have of the these capital financial due for centralization strength cash homebuilding value to last gross from efforts, and ways flexibility, a historic burden efficiencies, sheet our generate to balance exceeded the ongoing an underwritten over flow to debt other our reduction let greater and giving same repurchase million to mid- from operational remain these efficiencies. And returns technology-driven this the delivering high lots cost lower long-term margins XXX homebuilding of to $XXX than our with basis capacity scale and are well form strong set. book lastly, call us significant our exceptional, is goal production teens capitalized average in our margins we committed Third, to continually years by cost the of goal we leverage looking equity reduced SG&A of our X our share optimize underwritten peer on Erik. years, increased With within to time, such our changes, of as to ongoing X more consistent lots those for ongoing to targets, now above and with me At that, results growth expect ultimate returns we the

and Sheryl, Thanks, good morning.

trailing controlled at used specific this represented lot XX% owned. years closings, and X.X of supply. represented to control of include owned inventory option on end. cost and these homebuilders, XX,XXX generating takedowns lots The each was joint opportunity. with land arrangements. With lots homebuilding this off-balance on investment structure notes Our quarter sheet years XX-month return Based achieve trade-offs, which of ideal ventures total vehicles was different with like-minded each offering of and supply, returns X.X for we each and deal structures match optimal the our focus a and to tools with aim financing, seller risk banking financing Controlled

on block control of of dependent As percentage XX% we to cost ahead, and achieving tools. XX% continue to timing this the to our increase we target expect look the availability multiyear such with to gradually

million we $XXX quarter, total acquisition a million up for $XXX in $XXX a in the ago. a of and development from homebuilding existing million, land total invested During of year assets million of $XXX

continue will deployment ultimately and throughout billion, $X.X For with land the year. approximately dependent total deferral in our investment year, amount to full our to to tools allocated be $X.X expect development. The part between investment the be billion XX% on of land we

the flexibility we for and growth noted, when XX% XXXX, lots targeted are or over in of that primarily lot providing already acquisitions to our deliveries Sheryl fulfill As evaluating plans beyond. control XXXX own needed through

with are well new XXX of lot to we openings front, through community planned over existing the development positions end on the market our bringing On XXXX. focused

expect leverage. Based gradually community stronger a approximately to paces handful to XXX quarter. count to first approximately also lots communities headwind quarter we and significant our increased XXX a average communities sales now anticipated the our to of guidance, our the but in opened year-end in have lots our we driver XXX our expected count and openings has second expectations, to level which our we cost inclusive earlier community these from As a be community reminder, prior underwritten new size of in Compared from a and historically, Indianapolis. of XXX range modest absolute benefited of sales than on been XX that

which Before drive advantage of internal to last our has enhance Curt, a take passing moment expertise evolved more to over the the land I'd development gradually years elaborating spend many our growth like strong call land our help to and greater on approach, to our returns.

including many efficient that other advantages, margin expected gained inclined involve from higher more less important deals, enhanced given cost shared larger, in Master to parcels. As from investment finished have our gross expensive we reliance more control competition builders leverage and self-develop. opportunities land increased own land, self-developed sales we delivered last by Developers developing acquisitions quarter, of and the sheet-friendly scarcity profile, of reduced of Plan lot lot layouts, By community balance expanded less paces we finished on our increased favor operational often

returns focus capital a efficiency. Importantly, undertake self-development sharp with these and on investments we

X In we relief, decisions are returns-driven with years, and Curt. a generate seller from fact, operational that, capital seeks advantages made With us investment have Ultimately, of land partially will the have still often the lots project-by-project and raw our basis lot just-in-time underwriting takedown in the benefit a to attractive retaining allows the of and of turn to associated that last financial over the a self-development. while I full-cycle grounded some upside deliveries financing structure. This call performance. XX% of to on framework had most form the capital approved or efficiency form finished

Erik, everyone. and good Thanks, morning,

quarter with momentum our the built first have this morning, and results the remainder we heard you've the for we are of year. pleased As

$XXX We price For our share. our produced the consistent average which home delivered million total net $XXX,XXX, quarter, $X.X X,XXX closings revenue $X.XX homebuilding income was guidance. or per with of an diluted billion, prior of at

driven X on our chain average bring cycle by one focus profile. about which another we normalization sequentially supply improvement of on to of X times weeks operational week to to product year-end, months, approximately depending team's of X X are dynamics. pre-pandemic efficiency By time Our would by improved norms average and and cycle our back the targeting

full driving had only month X,XXX homes or XX% homes. Based homes buyers skew month, X,XXX which Of towards X,XXX per on these community ago. Including to inventory entry-level prefer in X,XXX with homes, at these homes, volume our quarter. XXX over in manage and or This the per start we quick least teams X.X homes meet these XX,XXX of our to past year, to for ramped a of our cycle savings, addition were the up a per around the communities homes first-time production started the And second starts, up community levels spec under several XX,XXX we expect quarters quarter per the for at In expect X.X homes homes deliver year. XX% time or now under these our the In goals. we deliver to includes production, approximately where from have approximately were appropriate quarter, finished closing homes, first X,XXX year remainder we homes move-in XXX Indianapolis up previously. from end.

closings to quarter $XXX,XXX anticipate approximately the for second $XXX,XXX expect year. of price of be and our to the We $XXX,XXX average for a now home the range

far for ago. favorable diverse greater home our from mix, exceeded gross full of Our slightly the backlog, manageable XX.X% be due Indianapolis that closing margin expect conviction outlook our home the of incentives in and power quarter offerings margin now rates assets. This incentives margin reflects we XX.X% pricing thus our profile. recent a between for remain lower strength XX.X% our our the on inclusive consumer This of year guidance even with with gross to will year, our the up new of we given and and achieved at our improved the the interest strength move a closings savings. Based in was second year combination least the XX%, cost buyer to XX% to

expect we discussed, structurally above that Sheryl of scale pre-pandemic averages As greater and overall our our remain profitability. improved the enhancements gross to has margin our given operational benefit meaningful

first year-over-year and per XXXX outlets. XXX sales our orders X.X community to increase This homes. in was increased to XX% net ending a quarter pace since driven highest was in XX% Our X,XXX monthly pace increase absorption the our of which by count community, a X% to

was order was remain sales orders. year-over-year. Cancellation This of price ago. down just $XXX,XXX, net rates Our a at from X% X% year low gross XX% down

external Our buyers below-average research prequalifications, rates a upfront reflect continue proactive customers which tools conversion end. SG&A our our from to closings broker due strength diligent utilizing revenue quarter diversified reservation high ago commissions. to cancellation the X.X% at of securing per online up year our home a deposits to well as home XX.X%, higher meaningful of among buyers, and was primarily percentage averaged from approach a $XX,XXX

disciplined Going range X% ratio forward, we SG&A the high will still an are maintain this in structure cost and forecasting year. a

from a a a our This the finance respectively. services XX% and and control ago. gross of which XX% By visibility. improves our from ago, we for operational services strong year XX.X%, result execution homebuyers margin sales $XX up from $XX a strong our team as year business, financial solutions million financial services Our capture and of customized using provides benefit tool, XX%, of million a rate of achieved drove revenue with up financial

We million $X.X remain of of of credit revolving credit. capital included quarter billion. capacity position. with which $XXX and on outside facilities, billion our our of approximately normal undrawn liquidity $X.X available unrestricted the cash to now letters ended Turning of strong course This

our down Our from and targeted net ago to remaining a XX% capitalization ranges. within long-term ratio debt year XX.X%, homebuilding was

maturity recently until Moody's with us financial position, Our next note outlook. stable are flexibility. upgraded rating to pleased we with our not Reflecting XXXX, credit capital senior BaX is this strong from providing BaX a that

million we stock year. million settled common this Based and total in our end, shares now approximately the our stock million the At of $XXX expect outstanding first for $XXX to $XX outstanding for During authorization completed our $XXX year. million. the to was of our quarter repurchase share X.X expect we common quarter, in shares remaining and on and million full the our repurchase we quarter, share still repurchased of average repurchases second diluted quarter a

future the does our is As reflect guidance of not occur and the benefit repurchases the over that share year. practice, normal this any may remainder potential of

Now back to I over will call the Sheryl. turn

Thank you, Curt.

discuss As core across we today, a as shareholders. groups driving wrap is let priority secured grounded and you strategy for focus our returns To us consumer with in me again reiterate once in do is geographies that growth our and so, up, have locations. diversification heard on financially buyers our

returns consumer help our first-time is expect We compete of in meaningful improves the It a facing. sustain continue sales groups shareholders. our differentiator We purchasers but better, of home opportunity long-term buyer in truly the the our pressures our buyers us to and to a affordability of is more portion attractive marketplace. our efficient that appreciate ability closings rate represent interest our makes today's to believe land mask how pressures, and and diversification resiliency array against for our to ultimately,

geographic have this our over intentionally and years our of diversification segmentation, consumer operational capabilities. footprint We of strengthening achieved broadening

morning, deliver our sales legacy our meaningfully operations and gross we business associated allow discussed targets returns. expect results the have margin long-term to that Given than benefits stronger we pace, reflected in this our financial for as

and customers. our open all of In the to excited to and to members of team ahead instructions. your results with to let appreciation me my addition progress. all the of striving With our are you provide to our results importantly, talented historic please the dedication am share you, top-tier continuing look so you our call to Operator, most forward deepest we us drive about performance, I We're for let's our opportunities industry. the your also of to across much proud each efforts. country. To questions. exceeding truly organization to on participants thank your that, And our share update within

[Operator Instructions]

Markets. Dahl comes from Mike the RBC Capital line today question of with first Our

first the a a progressed the were Certainly you for your down went -- and exhibiting that's more out provided of little to benefits the when accurate buyer quarter the rates I kind that of appreciate wanted then bit first-time diversification tell drill maybe company? the for drill intra-quarter you. as and and up. and on us little you first-time comments seeing give April Can the down about that flavor more has what looked the zoom a with like kind on buyers pace maybe in sensitivity your

the Yes, question, Michael. absolutely. Thanks for

saw good far pace, with our strong As buyers. as we a pace, actually up first-time significantly year-over-year

was pace compare honestly, highest I buyers. at close, pretty Our when when -- X. But with our move-up look the the I

this talked the be I rates, to first-time about When surprise. the what's I happened pricing, general that given affordability think, a interest of just inflation buyer, don't should

I XX%. modest. I I end up is $XXX of over -- I we little at XX% the rates but and backlog our lower that interest X.X%, just the the meaningful rate, into their or over number kind backlog, modestly their at average moving If look and we very rates to mean, a you quarter impact what our When to then could at of $XXX on impact started a to know, we they rates first-time if proxy to, interest stats look think of moved look an of XX% for consistent of what the move And as we amount. their to I different end would And hearing bit just compare moved show $XX,XXX buyer. from their payment is a to I moved is conventional April. the as -- at we're the DTI and as up to it's buyer others. let's and X.X%, quarter income average a loan payment our and compared that's I closing $XX,XXX. if from go is moves of saw share closing were rates, look buyer into average a to FHA -- a QX, difference. When say, income a they rates with and the There's that really down, generally

XX% And stressed their somewhat DTIs would going from be XX%. to

pool to of large us buyers them this don't because little bring more compared another are group. work highly just pull. customers payment. our overall they takes to in with on and lots with for that a to lever obviously, opportunity down don't gift dollars buyers, it to have dollars have get They dependent gives to the they different first-time more buyer but just that a place, So can They of affordable funds

So just a couple of examples.

kind kind of we in thought market fluctuate seen -- for up but with have sort down really just And dovetail of incentives, your of my but that that rates. That's incentives made that be your and the of the Yes. think helpful. for your kind this of to assumes cushion correlated just on the theoretic guess some With guidance saying I conviction stable, I to respect and comment question. Curt second buyers, practice, with pretty will directionally manageable,

So cadence and again, on in of the closings a your of just on maybe what incentives. specifically for incentives balance orders on where And terms specificity were in more maybe you're quarter? little the year the assuming the

meaningfully. they do Quarter-over-quarter, XX rate. ] [ rates. about We're were you're mean, average rate, When -- They tell for Yes. Michael, fairly X with actually are at right, I conventional exactly would just we've up. marketing modestly chasing they incentives we Year-over-year, travel generally down not I our interest the been you, look lowest do the buyers.

was X/X moved some those cost buyers. were buyers, first-time X it I our [ quarter-to-quarter. X Our as XX said, some [ least were ]. have those but But most have of had about of we ]. XX our half of buyers, had FHA That might We at might --

today But the when don't happens when a rates. what that are what dependent actually drop, forward, But rates I quarter, So move. to meaningfully. we fairly overall a If think look expect expect look in actually to be rates significant portfolio, first obviously, number on should so I in saw would I good generally given with drop where I position. at I we

comes with question Bouley next Matthew from Barclays. Our

around Sheryl, want on I up to margins. the made, higher-level -- of you gross just one Maybe pick points

is your XXX just underwriting years a curious mean, elaborate I step like as also scale? market-driven that of go-forward little counterparties the is think mean X exceeded to meaningful basis could if the it that's gross margins it there I seems I'm past years, I heard degree? Is you land that over up. prior your to margin. had seeing where about kind aspect better It X your -- return? are we points. gross a a big allowed say I to a really improve that you think there by the -- you I underwritten think on

you if expand on can curious little that a So bit.

follow it's shot Erik. that we it's of fill take pretty that's let things. a and it of a it's Sheryl in But time. noticeable something would yes, function and say I'll number any blanks. I over -- closely quick at a Matt, track

we're We've land, of lot more sheet a is off One related the we circumstance can. into land type self-developing albeit balance in them that of every buying. mentioned we're

self-development, we've the time. say so spoken for seen of so over about our I through the are a expect also we And that through system would margin that system. also scale operational flowing higher flow we've benefits gross kind general the that -- and and gradually that

the so land have a And in and of share. builders been general know, there gaining we just market, market -- more kind lastly, efficiency as

that's created think efficiency market. I so And of generally the degree some in

would be So would I point things to. those the X

balance to that's also down Curt, then, paying debt, I sheet, pay. our just would the assume overall going And

'XX highlighted, a ] [ Last as of paid off paid significant we've Matt, debt. guess, in as down well. you, I I at million year, we $XXX Yes. mean, we amount

over So infrastructure that of as interest well. our debt kind just time and capacity is of from a down overall period

Got That makes sense. for it. have interest Yes, absolutely, sure.

long-term stick just Okay. we'll margin And that outlook. gross maybe on then

I to release thinking of think mid-XX%. said in sort about you the low

in see in are the land part longer-term sort today? you as kind a pre-COVID margin would through that you guide? that a into the of lot there expect kind play a be of margin would that margin what lower-cost of Should there's that we sort like onetime of as flow of through? cost correction as newer correction gross How And land? where second question of margin The deplete costs doing is the kind you period

this some point, of have stab is land. Erik. I'll your do Curt X/X blanks. pre-covid Yes, our take and Matt, fill still that at It's Yes, we some can then in land. to still a about again

that decrease quarter X%, And of time. percentage it's so X% We've through. that And very continue see per been to we'll kind seen X%, flow over consistent.

won't so falloff cliff a And regard. see material that in or we

still have we So do some.

Our average is much the portfolio vintage over that really of changed it today our X.X land years. years, hasn't of number about last and

terribly from So it's that's not -- either. history different

the kind that's rearview So of mirror.

raw dirt X%, well and land today as and the side at In kind peers, X%, equation, increasing a I that terms would XX%. of taking the as both look surveys of of development say is current,

And obviously, that over ASP that cover really is of to time. lift somewhat normal. need X.X%, X% you And about

on we've somewhat "normal" time. elaborate that Curt and the this, balanced seeing we're flow in can then as in lastly, terms so seems And our seen through over And P&L. of

cost lot I track the We X -- And could lot same coming very are we and seeing it's floating has tell that years a closely of terribly is kind I gross increase, very ratio say not And about over recent on meaningful. It's in P&L. lastly, average. last our our then little range underwriting. think residual the average margin the X%, would but bit that in ratio land our X% been most through the as it land you we expected as residual of

land kind that to cover of gives underwriting in with gross of going we're confidence able coupled margin that, so and consistency us our appreciation kind that somewhat see to being it. And normalized

on double kind to of Matt, just Yes. And that. down

to, of alluded in cost. our kind guide Erik inflation year-over-year, 'XX or As a in got our appreciation 'XX, lot mid-single-digit assumed we've about factor to

on right kind threshold. mid-single-digit So of that

comes from BTIG. Reichardt question Carl Next with

last of but in curious better fixed you I'm So part stores, the your price on in today. per questions. lots self-develop sheet is But least you've Just of The a going about your at be, capital availability margin, of in growing to community spread off-balance margin, something. some about function and what up couple those XX% to they assuming. talked you as increase used sheet right? have what, got self-developing, the off-balance following by, cost I'm helping over cost to Well

guys off-balance today, you're terms whatever structure that of bit of and you you're capital in elaborate the can a of what choosing? capital sheet little price on seeing availability So

of have start we Yes. the on kind Carl, a kind do joint it's builders. When it's you've of got have side question. alignment with ventures, Erik. a good like-minded we fair of, which I'll cost Yes, equation. number the of

nominal We cost And I or in of the a point, really have a still X,XXX has so that banking, is was our of And separate that gotten of amount single-digit land sheeting do think, to balance Land decent more that because number. you're off at X,XXX bank expensive. lots kind in vehicle. your lots. a

that you it's we've average structures. think to financing across about land that's with is largest to find actually that, in. We're regard could about capital, continuing comfort just our I X%. so and that I from they got And something found today general cost those escalators, it's takedown the attractive And ongoing tend Seller as to is And tell banking. when lastly, of an X% that great X.X% bucket. vehicle an negotiations gravitate portfolio. we we'll something to

you all actually deferral of So and we've the for put that it's blender, attractive used. cost capital pretty a a in vehicles

Okay. That's very helpful. appreciate that. I

quarter? performing Okay. to trends. the across least current an little inventory your how slowing the And bit in begun this outlook bit the at whispers market on is we've Can during some just is, points, obviously, to a Florida sold what and home that to especially there, see given site. a of the in go existing back increase down existing particular And then price you of

curious as just market on your So to perspective that now.

airtime in it's a Yes, a appreciate strong gotten the quarter very had Carl. but of Florida. lately, lot question, we know I I

Orlando well. continued As when I all at heard would it's at when our where pretty when already we conversions, you look more traffic, working all, with our April, at harder moved pretty web of working little traffic, into things probably we're the those consistent, actually actually in seeing in each a look a like But I I articulated we're comments, what I look consistent say harder. That deals. would market. have that be I healthy. for We're little buyers, pretty the as affordable market

from comes Associates. Alan Zelman with question next Our & Ratner

of the I context spec improving how normalization know the was of general just for more this well of there. are in any I kind about and those about color you give demand thinking seeing some just of ramp as more kind build and kind versus curious of of cycle of you're others to you guess you kind of mix production kind margin opportunity BTO? at spec of be in I to would differential kind And an And just the towards times question, spec shift now. point back can your business challenges. to as order First combat of great.

let with that is with in I'll Sheryl just and overall, at Curt, the by where her and balance way, if But way. the between along I we're our to-be-built. This tackle chime we're of spec kind think pleased

we're think the for from standpoint, and quarter right good spot. I think in that's a sales pretty around we XX% a

move that kind kind we of our As the we level. we and as do diverse the scale kind past, blended where it of mantra. our up resort more mirror a through to to becomes spec have, then market know, we've entry to-be-built platform And lifestyle, said the will with more of in you of that as in And is. we

cycle with we've of So we we're hovering very same kind the expect come threshold seen to the the in we're And the very year. us over happy of rest your point, standpoint, with over results to that of time. of kind that. I course pleased time see what and from a

but today, think our as we here spec and balanced we business. our like approach sit our I relative -- So to to-be-built

Alan, in see when important square difference point. I'd our what than footage, at look it different balanced little are in we square are I add where to-be-built specs a our the just putting out comments mean, feet But And Kurt's a think I because it's thing only the place, we're taking few buyers. an less data spot really that's market. I generally the hundred on. a

premiums. But about an affordable are XXX we still of kind square our difference continuing to -- more it's money it's to the with go lot at of larger spending the of interesting of options, So push our into lots square we're kind product houses, because average. on when look high journey tune market on to to footage, me, foot trying buyers to-be-built

our so And look really you X the tale at of kind average stories. it different numbers, of is when

Got That's interesting. it.

the question, on Second Pyatt just acquisition.

share it because large of balance Midwestern sheet. -- for like And the Midwest the part isn't that is first market one have makes it's cash where coast. of kind the or building the seems reason it Indianapolis as you think I as the country is the kind entered off, other has guys of been First public given sense, one curious on the quite into. just market obviously, the balance I'm

even it guys seem So opportunity there you further expand that's in interested would there's like if footprint the a going. the to potential are direction

guys stone on I'm a some would Indianapolis versus for was attributes markets? terms could of potentially you other just curious So Midwest kind that that region? made in this further one stepping you be throughout Or unique focus say of the market growth

has the about strategically year be we to very it's and go kind respectable along so historic when to And it for some the right? the management the and at into good been and of for any deals wonderful And time, us really management pipeline -- as so, top the the to accretive percentage strategy. Morrison, back had appropriate lots, M&A a question. aligned being right be just probably for kind we look team, top of generation really very homebuilding for but of a or right in years, we the other at right a last patient. No, -- It talked team a business, really just at us. When looking and transaction, that at market it finished unbelievable position to Midwest, we've it's control have Indianapolis would to the the look veteran quite of homebuilding of Alan, look immediate had, had company Taylor outlets financial with the access XX of we've market, with Indianapolis honestly, we've been kind deal, to be consistent sort

there. given the Pyatt's get to to that and going which it's is quickly. our we We'll what integrated, happens leadership, focus relatively see business today, So happen Todd from think

did organically do certainly, growth those like there from every about. talked we've to thresholds have coming with here would -- meet we that an from Anything we standpoint, look Indianapolis, M&A something additional from we market. high out other But be is would as

just that of couple on portfolio, market. the highlighted maybe Alan, of it in the over things, that, the high -- as as much. Indianapolis measure really double-click other volatile And terms about Sheryl. was I about like managing back very downturn. And just that on affordability It's a of things we a the we think of result a we time that a few been a it's low relatively stick to really affordability measuring for hasn't going changed been watching

portfolio we us of actually here. land as managing The think role So we my just accretive for development the risk business. the an think relatively part overall is that's low on very about --

like so we bit. And that a quite

I think point, your in public. top of market to so terms XX And I think only and -- the of builders share, here, then are of that them X

And one so us to here. there's believe just that's right that competitive from standpoint, leads a

on pile Erik. to your on, pile Yes. And then just to

will that, should be is our last that today. the margin took very excited. the this Morrison's up effective portfolio there think that accretive obviously, expectations I obviously, guidance Taylor we are no transaction We're is thing to goodwill the reiterate, still initial I Alan, in and

be great. guidance off, hop acquisitions. any the I'll organic clear, And That's assuming XX% Is additional annually, through either and correct? not that's just closing expansion, then to that market or

you That's organic correct. generally, I but markets, footprint expectation. into grow if markets kind on if emerging to right? same, Indian you all yes, me, or I the your dollars that's fungible, so some you mean, point, that's of evolving the fringe -- like, point, markets, at that an to app And mean are grow

next Partners. with question Ken Seaport The comes from Research Zener

acquired is from quarter closings you came Could you lots finished, either LTM have this of how actually that if that. kind where talk of to line -- or trend many your you

how. see Let's

Are would asset... talking acquired we you have when about

sheet see Exactly. trying just through that I'm your run kind to -- how see of has balance I'm trying recently. to Exactly. mix

come a say last few would Yes. Over right? from the down, something come time, I it it's like X/X to over down has XX%. years from --

terms result of we margin there's to self-development of a a friendly in And obviously, benefits that, profile, so balance sheet believe but in we've pivoted more the way. as

inventory guys or Right. disclosed, you progress associated well think construction like I you land [ know, [ the on -- in vertical have the of X,XXX X,XXX I that. ], with costs work ] you Do as that. something could about as units, X,XXX balance And actual don't your sheet

right it It's QX. here. Yes, billion I have Ken, the about $X.X at of end

question next Wedbush. McCanless with Jay Our comes from

margin apologize, XQ? be I a on you thinking you're had gross I The jumped I going into and -- sequential margin talk why a was about the why late. year-on-year one first up little But there decline the might and could in gross

little on Jay, Yes. that, talk a can I bit.

are I sequentially, did or sequentially think your say you Just you...

down Yes. just to [ approximately ]. XX.X coming QX

QX a some guide saw little margin, come just about come bit beat. about on from can a some little a talk average We We Yes, there. I'll maybe down had to pulling the throughout through we bit country the saw had well. But relative savings to the QX, it little some house mix square cost as experienced of foot. beat. I QX lower kind good real a We $X We We through. of are incentives a QX bit.

some higher-margin divisions, got revenue or from in mix. of got Some coming concentration with fact course, coupled our division. offset of lower-margin that that of We've we've revenue is, higher the lower our

incentive a of to the factor based here going on incentives QX. specs close in loads to there. going number on we're buyers sell there's our And So use entry-level for we'll to then, continue course, mix of

segmentation? Okay. you've Or next entry-level said and had like buyer Does the off I segment company kind of over-indexed kind right. still regarding building asked terms is And communities? in what All That's trend tends question of East X/X, to the of the to great. always X/X, the then East. the it Carl affordable X/X

Sarasota Orlando our first I Tampa would business Yes. is The interesting East tell than mix that is time. primarily our business, you very because different and an our Naples and our

next largest be I our a be line I So would Austin Dallas to Houston to then be first-time would that second And small when And compare would get piece. to -- or when Central parts in a it's market. in first buyer some the the time time move west, XXX like average of of is still the up. But price and Bay dollars. West, an mix pretty sales good of at first and

area. generally, in So a the the that's of penetration think and Jay, Orlando I comment, given Tampa East fair

from comes Alex with Research Our Center. Housing question Barron next

particularly homes? just price ASP more Yes. smaller wanted that I there? or homes the are entry-level in building drove Or more orders, to you mainly Was decrease and guys buying just people ask Central. the what about

evolving doing in more of we've talking Yes. divisions. the Alex, last of heavily plan that and here communities affordable being been the itself on a Houston, Houston friendly that's it's a function entry-level more couple in master products of reliant lot balance of over manner. marketplace self-developed about now Austin kind sheet years past, our and a in

introduced entry-level kind couple their so type last which over they've is move-up you're of And transformation communities, the first of what in more of and seeing years.

we And as being where to made and with first comment and to Houston to often Austin time. go point, kind of well, Curt's earlier Alex,

Our square our about is to-be-built. spec less inventory feet XXX than

penetration, higher spec that talk ASP. we square a going about bring just when so the footage overall And to is down

it. Got

Okay. Great.

then? the lower expect you continue So to would trending ASP

In Central specifically?

Yes.

think would you that? Consistent,

this transformation its has has Houston. more of, think gone would -- consistent say I I kind would Yes, guess, run course the course, be it its in I because

consistent think on from here will So out. I pretty it be

just as And like asset team the that? it in whole more purchase? it. as you did and more bring Or far guys Indianapolis of structured deal, that Got was the an you

yes. it. but very and entire the I'm and about Yes retaining are excited purchase, we It's an asset team,

I further closing back no so to questions, have remarks. the for We call Sheryl Palmer hand

all quarter. our best, Take Well, much you -- joining QX forward talking for us very next and to you very to you care. call. the thank wish look you for Wish we

now call, for Thank may today. us joining everyone, disconnect you you, and This your our concludes lines.