PulteGroup (PHM) 25 Apr 232023 Q1 Earnings call transcript

Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the PulteGroup Inc. Q1 2023 Earnings Conference Call. Today’s conference is being recorded. time, Jim like Investor Zeumer, this conference turn Relations. At to over Vice Instructions] I to would the [Operator President of Please go ahead.

everyone Audra. want you, morning. for thank Thank call. joining Great. today’s Good to I

read are first of and corporate President operating Vice Ryan and exceptional and President, Marshall, you had Pablo discuss Participating CFO; results. excited earnings quarter Jim in Ossowski, this Executive release, Vice presentation President we press posted As PulteGroup copy morning’s on an pultegroup.com. financial to and are Senior have Finance. our this A morning’s and today’s and CEO; our and website release been Shaughnessy, slides to call at our

an post replay will call audio later this We of today.

to prior practices, the in industry as release gross can presented. on percentages, impact period be margin no revenues in had An and As reported webcast to price in home well included associated press average more impacted be cost for associated noted sale earnings. reclassified in effective revenues but the quarter sales and comparable of periods current call. slides is on the our company’s our as the this analysis reporting, impacts today’s morning’s SG&A sales XXXX consistent and reporting year this home company quarter has incentives found and net all first closing release, earnings of with sale reclassification with cost This reported morning’s with

differ suggested comments future performance. everyone Our the expected statements today’s results forward-looking periods The Also, could discussion about comments referenced. I want today reflect that today. materially to by inform changes these key and part all earnings those are annual for affect company’s detailed our factors from our other summarized are Actual filings, within accompanying These SEC quarterly in and risk of risk reports. that the future our results significant slides. presentation including most information today’s factors release could as includes

Ryan. turn over me call the Now, to Ryan? let

into market combined improving the in to in that teams to demand of per expand field extremely continued actions of to our point stronger strong our on the and included drive quarter we growth share. fourth Based – quarter by year, a increase position in implemented morning. basis good quarter helped I building home and a last the first with revenues, that the conditions, heading results experienced Today’s pleased dynamics our outstanding sale a in Jim XXXX. first began QX Thanks, XXXX. optimistic am we increase competitive enhance first momentum cautiously market XX% into report earnings XXX operating in XX% margin that were

homes, taken implementing Among of XXXX. the of strategy increase in our spec began production actions we the have back a to been half has we

opportunity strategic discussed we starts the mortgage a our production, rising units of homes made move-in we are in to can previous quick within As increase spec saw the realize on number operations. meet rates. hedge as homebuilding as benefits as more a seeking buyer calls, demand against decision consumers earnings we to more better With

our cycle. first available more can The consistent efficiently turn assets quarter to a homes practices our said in directionally alignment cadence. Of be almost valuable was negotiating level business seen the more homes. critical when gross these X,XXX and strategy today’s with high which spec production basis clear this starts, start to spec I an in units a to of right to our and so to a both over is delivering appropriate margin Keeping decision trades maintaining environment we on year is allows the our sign-ups, balanced sign-ups, assets can is maintaining believe We last returns XX% approach over of which to the that housing By starts sales, the were inventory is while This starts spec these That to consistent turn increase better X% historic us suppliers. with keep to increased importance demand. spec commit in of allows particularly be profile. one. market having us want with in

Our show while that successfully delivering this executing margins first quarter gross exceptional results realized strategy we strong we as against XX.X%. sales are still of

proud, can demand being won’t heard that not have won’t we more oversupplying while to. starts By the don’t measured say sacrifice we profits also You in me have meet margin be buyer but we if our market. we cadence,

we increase flexibility first the us quarter. with quarter volumes, fewer started important trades suppliers. maintain and production we in point, market the is in ended with which lever Case an or production to than gives when This X,XXX specs today’s in working

to recent housing in mortgage relates a benefiting home to As just general also rates, stability overall sales consumer from I confidence. but are in of declines important rates demand, think having it is sense

inventory improvements Given see our starting to as on selling in the ease many the we interest in homes, generally demand a limited of well of existing rate prices in broader environment conditions are markets. pressure as

found In our back we our many of opportunities communities. fact, have well on higher over incentives of pull and in and/or to markets, half move prices

changes see ownership the price desire demonstrates people modest, are the when While home and value. are that to they willing it buy point

which raised there that shortage depending this the the Journal in to article at houses. Earlier ranges X shortage you that the this Wall month, housing country. The looked from Street in upon housing expert million point million X ask, article the was an

to homebuyers eased. broad debates number, housing While affordability the are when one about agreement is I there shortage. we are is I that quick can the believe this a have be there respond think certainly pressures of reasons

industry, to is given short among recent impacts any call to minute in experienced particularly disruptions the me regional take Bob, let on a turning banks. banking address credit that the not The disruptions. the have over availability we Before answer

financing. homebuyers are On the routinely of having require between advantaged financial XX% we operation captive that that for originates a by to services mortgage side, mortgages XX% Pulte

have team the proud in end, recent we financial as am In more match. been $X delivered that add the of demand that typically project April. maybe remained sector our exceptional the work. than conditions may liquidity in two PulteGroup by big smaller the I results banking to for has very through PulteGroup total improving the in operating builders its to it few demand the I highly I opportunities over first access the or put billion builders side, also capital disturbances On quarter. am cannot would PulteGroup, create of that self-fund experiencing such as have And and weeks encouraged quarters. past buyer to strong

performance we changing the continue overheads production to our steps focused will measured take repurchases, and position success market PulteGroup disciplined in over From remain and and land share and have dynamics, we spends on best for rates actions. to remain long-term. within While today’s we delivering to

Now, the for Bob call turn review over let detailed of the a me quarter. to

Thanks, Ryan and good morning.

sales An my As sales the $XX home periods comments, reclassified referenced are sales cost Jim analysis sale and incentives million of the Where home this future for and reported of prices revenue amounts this of The webcast million slides. $XX reported prior as percentages. have first year. quarter presented. all past the margin last quarter our cost periods first in in as SG&A we current impacted inclusive our call, closing total This net noted reclassification in and gross included from and appropriate, at reclassification is the of any in well year current, to in year quarter revenues numbers beginning this of is reclassified incentive of or associated the of impact today’s average reclass. the

increase XX% average a over gains review to started a adult. in homes get now quarter year-over-year record Home across for $X.X groups, sales of with by first billion. price to prior me a and the we Higher revenues results. a year revenues in both sale buyer closings Let quarter our in reflect first and to a period increased higher basis, quarter On first in average move-up led the increase of all double-digit sales X% X% X,XXX realized active prices $XXX,XXX. the

comparable which over a year quarter, period. In X% X,XXX represents reported we closings, increase the the prior

our demand us in extraordinary we market period. of thank like trades above an spec teams areas our close capitalized for on that homes last and guide stronger construction for to in to select the instrumental the working Our a in with the in were contributions during quarter of and our their closings I’d chain supply partnership the to time homes, over a came have efforts take volatility suppliers allowed operating achieved. procurement several we moment as to quarters. Their additional success for our improvement

business active the adult. In availability mix that closings production our our several spec first-time in the over increased first-time, mix of our decision from move-up XX% last higher included active well spec to to from as the of part at buyers investment percentage XX% from first-time of XX% of from last buyers, years reflects our increase back the XX% first-time and buyers the the as our increase XXXX. year, closings results in XX% move-up an first of half XX% quarter communities, was quarter, closing our in and Looking for adult. resulting the homes The of in

X% totaled orders is X,XXX our new net prior down year. at in quarter, which from Looking our homes, orders the the

rate beginning year. basis Our from from in which is sequential XXX basis, as On quarter, was fourth last points of quarter. than cancellation less backlog a a first XX% cancellation X% XX% up is rate the percentage the up the

to beginning stabilize. are cancellations So

XX% X,XXX on orders unit active in cancellations X,XXX decreased By and while to to from the basis, to a homes, quarter. by X,XXX XX% homes. fourth new net homes, which sequentially X,XXX buyers orders X,XXX lower homes, increased fact, to In down prior homes XX% group, amounted quarter is year this move-up in were adult by first-time orders to the over buyer

in count increased the Our $XXX. XX% average quarter to last community year first over

communities homes communities year, on Based for in increase was rate, we last second expect prior approximately second line pace investments would the sales of opened which period, which X.X over to the our averaged but year. of X-year made the the an period in on XXXX XXXX. of out in land down represent from to X.X in quarter, the our quarter per pre-pandemic the absorption from with XX% Based XXX prior we operate of month years,

count the the Looking quarter. over to XX% prior growth of expect X% of over year, continue community to balance comparable the year we

improving for backlog the environment. market within positioned first compares homes of $X QX Given our record This is billion. quarter had last a of the last specs homes and year increase that count, of quarter, expanding its consistent our valued billion. a which of ended demand $XX.X total year’s XX% end community homes production, have to XX% first sooner. with value We finished. up our represented with At we close XX,XXX with Spec were XX,XXX XX,XXX demand from homes to well with of a can PulteGroup of the of share units under backlog is to the at construction, meet which available buyer strategy

the to production quarter stage of last as Over to was of production, the drive focus first XX% on rate turning assets. continue started basis we homes. quarter. of as and the in XX,XXX the roughly our quarter construction X,XXX up but start X,XXX the first homes fourth on approximately we we on cadence expect start This between from appropriate their have on deliver we course from sequential under of down X,XXX a an homes second the quarter, Based about and XXXX we year,

able the the improvement are to to been pleased the of we environment, by we the ongoing operating in overall have thanks realize, level our operating outstanding teams. efforts of production Given

also few these a few generally the upon our to weeks, range unit market, days depending addition production shortening At beginning are stages the are of in but trends a volumes, the the gains a point, seeing this to from just we In higher positive. XXXX potential in Based to XX,XXX results of XX,XXX the available to is has QX for homes potential times on gradually will our guide to XX,XXX, our increased initial and loans. cycle homes. production This improve, have the of strong from up close cycle.

second determining go of actually the converts how production XXXX long way quarter will a in much of this strength the sign-ups into Obviously, in closings. universe

first-time we to $XXX,XXX, which in be sales average scheduled is the that well sales estimate our backlog closings lower our to expect the reflects primarily the price both to $XXX,XXX. the That impact in average homes anticipated of second are quarter as have a closings, spec price $XXX,XXX currently sales average as close the range of homes price. mix While to of

gross year. to the and Please first reported sales was the XXXX benefited our been adult points homes. closing The was benefited in selling margins our our quarter gross quarter from and compared XX first our on reported gross move-up last incentives basis highlight relatively where of XX.X% business approximately which prices revenue. margin net our quarter, to of XX in by the quarter would basis impactful that that pressures XX We below basis active benefit first with level points. margins I points cost reclass less margins note current entry of from have

we on After quarter, plan several adult trend we close in margins historic of the across mix to buyer years in move-up are to be to and of gross seeing in the the a range groups, business. gross Based margin parity to our active second of XX.X% reversion XX%. homes of we the margins expect higher

and lower in quarter in lumber that costs deliveries quarter, margins will our reported flowing first As benefit with of the the our the second through are operations. closings reflect

drove year’s volumes was expected sales prior quarter the reported higher, staff, overhead million are expense revenues. Higher revenues last our relative expense period, we $XXX we but of guide. X.X% leverage expect adding in SG&A production XX.X% closings sale SG&A the or carefully quarter, and home improved of comparable first XXXX In home or million $XXX year leverage. to our to the overhead of revenues. this maintain and sale and still year associated first moving With In construction

second X.X%. we the SG&A expect in be range to X.X% As to quarter such, of

under capture used In in incentives In operations loan income dynamics industry. XX% the first which $XX was is million, last our from year. reported the QX, quarter, income was lower the mortgage pre-tax in competitive impacted XX% higher $XX million compared rate with our year. on we period Market by financial clearly the volumes, were Pre-tax down services conditions pricing and being prior throughout of routinely to review in process, but deposits all from Based as that we associated approximately this in planned improved, continue own first our and million off under wrote market positions and do held and have land X,XXX we lots conditions, the walked reassess previously costs. pending quarter, pre-acquisition away $X option transactions.

our million quarter, reported of the effective In an was rate tax first or $XXX tax XX.X%. expense

We the quarter second expect our rate tax XX.X%. in be to

the $X.XX for $XXX net quarter million income first from per million $XXX which net income per share, year up Our share. of was or is prior $X.XX or

repurchase per income, earnings share significantly to the program. net addition In from higher our share benefited company’s

plans additional per continue the repurchased quarter, we Consistent million billion an with share. a available cost returning or excess under to business. an In our our share of continue repurchase in of returning first total approved $X.X to Along to program at shares X.X has the billion $XXX Board authorization, common to of the price our $XX.XX strategically billion. we average our to $X funds funds bringing with shareholders, invest our shareholders,

in quarter, of first $X.X acquisition invested land from the year. $XXX development, million and we In billion QX of down last

down period development consistent from expect XX% environment the between stronger the billion construction and demand and ended we invest lots and with XXX,XXX billion $X.X year. year-end to increase This the our now land in $X in acquisition Given is overall with control. XXXX. activities, under We in last

are activity and options. past XX% several are our the lots XX% on of those quarters, owned over Based

optionality continue of Reflecting to will associated a financial our target XX% strength our up with land cash of we via increased We seek bank being results flows, from quarter last XX.X% our lots the quarter first XX.X%, debt-to-capital a to option. of end cash, and at controlled the year. $X.X ratio first our our of ratio which net basis, of ended down debt with to On the gross of X.X%. was lowered capital the quarter billion of

call some Now me comments. final let to Ryan the turn back for

Thanks, Bob.

we’ve least increase and/or watermark construction optimistic towards incentives have Overall reduce high At conditions and seen of our cycle of experienced quarter we improved be that continued first higher point, many including driven I market are results, improve are and overhead we this to positives a at leverage. to opportunities an times. think have closings, gross to conditions prices of delivered chain finding first we times. the initial stabilizing, by are as continue margins earnings, market-specific a been strong we in communities. shorter but are turn taken and in strong demands there Supply lot cycle terms seen quarter out record gains

local repurchase We’ve to billion of XX% the over have the over our because is systemic shares increase we which approved and cycle national and back to back shortening our an due another clearly construction driver days, to our strides $X production bought universe. company’s and authorization. bonds bought XXXX time are share Our critical teams Board PulteGroup’s expanding – of is return our making important remain shareholders. climb to committed

One positive last to ranked XX employees on prestigious list most PulteGroup I we from fry number climbing XXX year what again XX based to Companies this third ranking. is included about higher, list the their our Fortune year highlight Work was and part once other our say among that experience would on the moved Best recent is in This PulteGroup for. being on the it and is as take number because We this of again team.

quality ends chance, it the our focusing care in X,XXX employee around comes a of PulteGroup quality and customers, with doing to resident lifting committed a delivering thing, by from rather success happen teammates every starts homes by dedicated create doesn’t delighting our and and culture. to the on effort customers them. taking culture but amazing world-class The of our Our employees right

another I financial our for trade I am want along extremely results. outstanding helping partners of quarter and proud and in employees, of tremendous work to deliver of suppliers thank and our their operating our team all with to

back me turn the call to Let now Jim Zeumer.

Ryan. Thanks,

Andre, do questions get the call the we started. the time you that many process can remaining get during possible want as call. to Instructions] to open for We’re so now to questions as prepared of [Operator the

for Q&A. prepared We’re

UBS. question Lovallo We will Instructions] first at our from John [Operator you. Thank take

questions. taking Good morning, my Thank guys. you for

talked in prices ability the selling is even about on raise and some one pressure markets. prices easing back on first you some incentives or guys to pull of The maybe the

markets – us on markets little help just maybe the this and incentives you bit I think opportunity maybe you to the of a kind frame can of the it’s challenging greatest which back XX% the pull where said you’re seeing at point? markets more

John. Yes. Sure,

We’re seeing regions I would in Southeast markets Florida highlight in be three markets, strength. the would kind strength the of the continued Texas with that

in markets, a the continues would areas terms the that really in markets Midwest being that challenging, steady coastal and the Our particularly to ones California of probably performer. be western the would – And are Seattle, more high-priced two business Northern it then highlight. be the I

That’s you that help then it. I And Got Pulte see builder, be on meaningful. mean, helpful. it’s than slightly been recognizing will going? And the Maybe today? move-in helpful, bigger historically? a you of business sort outline effort spec us that it’s your – and perhaps are could this of you just guys a been thoughts do piece been it not Where the has this has

we Yes, I that which certainty to really rate, to when alleviate business, alleviate the John, we’re things alleviate have that. to interest year, to helped and pressure in put I help spec ground. And that were around going opportunity of more around specifically interest rates. really It to first-time the shows more decision rising strategic it of the to was think this – homes deliver made pressure helped exactly there with that think it last sooner talking when we’ve entry-level an demonstrated started about we middle deliveries,

been X% It point, business. bigger always of much our a been business, to the high had builder, business, our which piece. with we’ve as it’s but I our make matches but XX% as got business, of part entry-level made about decision a To We’ve as specs process historically your never a spec. that our it Centex the buyer. catered John, And not we up well of overall is in number, total with highlight which that towards about XX% is our pretty as of work first-time inventory because spec

It’s we So as goes remarks, we’re And to match we – in demand what prepared highlighted the in market think our done. great in continue recent is. it example terms spec I production of quarter’s that’s now, what results for going strategy right historically a this future, where most our with the is spec to than that maybe us. certainly are of we’ve working And higher working. production think how

Thanks, Ryan. Great.

to next Zelman. Ratner We at will go Alan

quarter Hey, guys. Nice morning. time. for and Good thanks the

where the like that similar in you the spec say have you last ground. obviously, BTO was homes business you the was of Following build-to-order? market momentum overall seems or saw you for as inventory guess, and the those just desire Would saw see inventory question, kind still currently of the versus the towards more skew on quick more demand for spec in a your do I it strong a you of well you a moving function on had

a sell. likelihood question. good have a strength you, being point we would higher in price I transacting at a the entry-level saw it’s tell there this broadly, they because points. all home Alan, buyer Yes, time of That in don’t to said, is

And hampered happen things But not certainly job that their different the they well. may need for we’ve from a are adult they to potential to and continues relocations, they with home. marriages, by whatever active buyers, rate on into are think move home in as reason, hanging a benefiting that existing in that so business, create prior promotions kids, life family buyer our I be up calls, look, our all a for move more talked for the to low interest as a

pull easing adult And SendTech entry-level we’re active for on a We us. we’re the of moderately seeing first-time pressure debt and group. the when to the it’s intentionally with build in strategy, seeing. first price move-up They and find lot that prices the sales But have incentives. model. those segment, moderately in are buyer more back it both leaning points. in the business, spec us I some is build-to-order which and don’t our We of think We raise price demonstrates prefer the comes to allowing to of spec working strength

and think stronger the point sense. a segmentation bit guess near-term. of about level makes that note, the That I entry it. if in lot we And a seemingly Got price on

to to turn this the differential margin alluded lower is talked the margin of norms the margin historical forward, business should when mix back bit think you you. a about kind a of more for How going reverting about where end business we kind the level of of assuming You but higher bps trajectory? continues which on look for of here be some You like that can impact would margins probably exactly this sequentially, steady XXX mix there. that current guided and is the looks to about if overall you down what for this like today mix holds mix quantify But what it business?

Bob. Yes, Alan, it’s

a haven’t market. given the There guide. in We out a is moving pieces lot of

adult in book of different differentiation of availability, lot pricing is more you our backlog that So now What a of business, got good we’re first-time last several characterize if we’ve see in our in the things. than as margins. move-up The is margins folks you visibility our they about compression had years, that pretty of activity historically that and we’ve entry-level in in sort the on market, both and what broadly several the the it think of selling was dynamics, obviously, seen margins. sort peers quarter I saw would most seeing. have active and I there were norm our results where from in years based consistent still some – the between margins based and the us, on very strong commentary would for higher with think pretty ago, recent it And was sales a you been –

both in and guide. can see in results our our You it

was heard our forward, at Ryan entry our was conscious level. about you on as ago that X say targeted for it little you XX% go business That a X, us. than That’s part. bit richer So of is years

little over margin a underwrite perspective, about don’t you see we contribution a so the highlight to from more we mix adjusted worthing always think And time, if will bit margin.

focused that I are little the That’s on with you. point, return. spins business typically agree a faster. And a We made you

to the coupled business of to by of margins we’re velocity that So that generate. the able that virtue we’re get with able out returns

guys. a that. Understood. Appreciate lot, Thanks

Thanks, Alan.

ISI. Kim Stephen to next go will at Evercore We

Yes, of encouraging guys. very much, Thanks interesting stuff here, lots news.

curious, course or as so, Let – of your you of with per be roughly what literally time. I’m production cycle absorptions any start $X.X I’m that over or to month year orders. does let’s over capacity this not in course you times me right whether the about did that the you – the last of curious XX,XXX, next continued the the if think the $XX from to community way this year the stayed whether And improvement just kind than can higher or pre-pandemic. talked billion they now? you we things are per said assume is a up But with of exactly

start So Stephen, let me community. with per absorptions

the we that we today, the it absorptions at able turned a that. – share Going back prepared about, think proud over market margin and we the and as not us highlighted work And remarks I be turn and we’re that heard outstanding of the last are several to out first to quarters, with margins we’re our out turned take do were assets. pleased going you’ve me that absorbent very in we for community to do talk my that going And I you’ve seen quarter. well.

I there. So both on fronts we were successful think

what we to follow important continue continue we forward, think turn going to to and per with same historically will that are Going has to it’s that absorptions community. have approach. to really the profile. best-in-class reasonably We combine high been high continue margin – assets And to

got think our of strategy working and we’ve lot of playbook so And the well. our we elements a

your part cycle – times. question, the terms In of second remind of

to to homes. to we’ve delivery, allow will year will our we potentially in universe that us for got highlighted what XX,XXX we’ve with and to that it give start, total XX,XXX production process us – Stephen, a So a is process what expect what’s close universe up in

assumed currently have that seeing. cycle the we We times are

improvement. So not incorporated we have any

improvement, have We we’ve that. incorporated seen and

more goals we’re improvement. hard haven’t even back and that to take suppliers. our trades to We cycle lot incorporated endeavoring a but time, we’ve And going teams that’s further got lofty certainly, claw our and of by work

encouraging were an production what last if lower on quarter. your lighter of to much close follow-up starts just quarter $XX,XXX sort expecting is this we had I thinking. of And relative you’re the number, point, certainly been Great. obviously. little on next that what capacity $XX,XXX side to a And yet, than that And could to

can So was? of you rise number That here? from confidence And helpful. would very where that was can bit number be kind gives why talk a the that, about Thanks. little start you what it

program I the well difficult months ground the of businesses put Yes, Stephen, what the our look our weather – the tend and Midwest on it’s more especially think a that cadence to widely multi-month be quarter for terms and of at X it’s in in we kind first of the the Northeast. we starts that side, the into known

a impact a of our kind wrapped on terms production being XX,XXX up starts the probably to cadence, of number range in plans but of bit unit all XX,XXX our into little So the guide. an forward lower, that’s tad

So not I’d entirety, was the its we we in in QX, but what of started plus in backlog, implied just what in kind rate. probably look QX, at start what what in was QX everything production, started

all works that all way into the the we’re I running that think that business.

Okay.

helpful starts that forecast did had – remember actually it? there expect to starts a if you I’m that for So XQ give XQ, because Bob, would you be hearing don’t increase. you I

number a provided, not Stephen. That’s we

Okay.

Okay, I that’s all have.

guys. thanks, Okay,

We next Anthony Citi. will to at Pettinari go

rate any there or it in backlog quarter? Cancellation normalization was morning. the step just smooth where sharply thoughts more maybe the was of down good working rates pretty particular a wondering, throughout overall I’m Hi, that pretty if was through, maybe change biopsychology there? kind most or quarter-over-quarter. significant came down the cancellation month of just is kind reflects of wondering in Just itself a

point a rates oriented talked that wasn’t has that good shock It but consistent contracts much largely cancellation half impact And they that around signed at table a it Couple and when think, with think the has as the backlog is folks are back were rate system. the closing moving they to were moving, and stability in and – wasn’t a cliff. largely the year. the much The your I most There I through they one. of of near anywhere back was lower themselves worked pretty higher and much the the fact consumer cadence. a as about, kind of are that from not that and last Yes. rates Brian now the got

I the for why total seen first you’ve we movements has reasons. year. had I I today in think less combination sensitive the quarter customer fourth, contracted people half those base rate contracts two of did we the in rates. the the to we that’s we the less So than back current provided than reason things are it, think all And the of can think this saw candidly, in signing those those cancellations and And

Okay.

without Was Okay. at about versus maybe side, just you primarily That’s your big sort look then just cost the expectations. gross the when very what drivers most helpful. a perspective, stronger picture executing quarter your the from the beat pricing it finally, margin around quarter? wondering too cutting And you of it of the and on think or surprised I’m

that stuff those that it Yes, we in. for I’d was cost, in baked costs closed to like I mean quarter, tell it’s the wasn’t. were you the really but

with to efficiencies knew benefit, Lumber our find working but that. obviously We’re going a we trades was forward.

in that our was guide. So

It – it our strong of and the really It was we was demand. highlighted it this think our ability relatively was to incentive manage in I remarks, our the load. sales environment. reflective

since year. to use had And a do able in beginning another we’ve we’ve been buydown that is mortgage what national selling So as program of rate effect the tool. the

low it’s, And people, so for get some get my as hey, can you it. as rate

to want and offering I want bit, that, with rate I before nice highlighted replaced as we reducing closing incentives that and others, you opposed than the my to were incentive is stop part For added prices increase The you that a prices in were help little that costs. to actually down that started we able it. more communities. half the that to And we our to fact couple with you then of

for aren’t quarter. Now the strength increases, was the better sales but we psychology in relative these guide margin showed than forecast the of and the massive quarter up it’s that our had in for

very it that’s helpful. will I Okay, turn over.

Anthony. Thanks,

We at Michael will JPMorgan. move to next Rehaut

morning, Good everyone. Thanks.

if First possible, in pricing little question, a to I just on wanted trends. the bit, zero

before, about said you your had increased XX% maybe As you you markets. mentioned prices of that in

seen in that far the get increases. year-to-date or that wanted between reduction well price maybe the and as sense to incentives base Just of so a as some between moderation you’ve

of pricing to how sense from net XQ a XQ us give much end? could – you If end pricing has improved

of haven’t that level granularity. we given Yes, Mike,

continue, had think if our that pretty increases, that’s of definitely January sales of on still December been starting year-end back buyers. of we’ve take has in but seen, really from momentum price are the to market half previous that report did I what momentum change see building question kind or answered that we we’re into and that which just moderate the tough, build allowed a It’s pull November, kind comment going on we the we The year. back us to highlighted it’s but Bob of January, that seen seeing some some we’ve a us sentiment in you remember of and incentives. allowed was to December in back to very last January

interest think I some is rates that stabilizing. of

of a that some have is that and I that done, the lot to, got back as changed. then I shortage go we’ve hasn’t kind thing And is I of a incentives think country, this that of think we biggest in the buyer interest housing rate psychology.

some we’ve worked balance from hard I the in able demonstrate projections on heard value, where the April. some very forward to be seeing bullish things we’ve seen so start do, into of anticipating us and the the allowed year. And been to be places we’re the And that and to do to we’ve we’re with think sales continue that optimistic momentum able our that’s for floor. to of And you’ve nice which us,

that that, if to to lagged at quarter, if And heard – secondly, right, the just of appreciate get about mentioned just a I that XXX also due is the the year. Ryan. that back you if believe gross because half I impact of didn’t, incentives I feel that if in higher will higher of second there driver last and expecting of apologies, the – from the by half but I XXX quarter, looking or the in guess you impact bps the margins wanted second sense I quarter. played you’re potential contraction, negative incremental that’s from back itself that Great. is could lumber have costs see benefit you lower of be of are second – if back the out mostly impact to mostly do incentives ‘XX? also half of that of ‘XX, the But to lagged going for

Well, in that parts little I while are got reason a still or moving year. be think And lower into looking we We pretty the go quarter, again. market. The there environment, we worth are next the we but That that going QX. lot only see still a year cost one a have ticking beginning of at It’s year, mentioned than to the in that haven’t projected increases out is probably guide we lumber. is feeling will cost and given particular in the beyond we up at bit inflation. we it’s sticky. It’s of in rate labor the later

is production move at if obviously, land through look cycle, We And you have typically expensive the as about we our talked that. time. more

quarters, against So, two decreasing some at pricing. flat have incremental cost points a during we last the relatively got

to the actually and been we to-date. we margin this Mike. think that’s those produced are the largest in we of reflection that reality had the is what’s The year in before, I year-over-year. last offset market strength decline a just And up, haven’t saw never costs So, of seen all resulting able that

Thank Great. you. Okay.

Thanks Mike.

comes question Matthew at next from Bouley Barclays. Our

Thanks for taking Good questions. everyone. the morning

impact kind about housing a regional see trending there any few sales perhaps thinking rates kind color for curious the to on there where of as X% of you during those crisis periods, those you. look And sort did of again. pace Pulte’s some have kind April through is impacts on We of moved back pace sales just was and during the how we uncertain the the strength from I weeks. your sales sort over activity am kind reached obviously relative had a of sort the So, pace into perspective, on of of mortgage quarter, the that, periods March quarter? own where cadence past of kind to period quarter, exit banking of quarter? of was during the to Thank some

Yes. perform saw really Matt, in sales weeks February got stronger. first paces we was as a March. have seen move to pace then April the to strong at of what a January February, weeks, X.X sales And Sequentially, continue to we to the we of level. strengthening three continue quarter April

the seeing. buyer your impacted West certain banking So, banking, certain than particularly more we think others. in To think on groups are crisis, markets, point, psychologically I cities during pleased we Coast certain are with regional what probably in the I were

momentum I resulting that and the sales we things force. think see we are that most the were from continuing of dissipated have seeing good to on

amount. the ground am constraints guess secondly, it. what smaller these at today perspective, your hearing you how from Got builders eventual for seeing and Thank that take you builders? smaller if kind might perspective you on opportunities I some curious liquidity from shape are versus of to your a to competitive then I that. put credit top, And the with work mentioned of sort

yet, Nothing Matt. necessarily ground Yes. on the

lines smaller gotten operating some has that more the we I provide talked widely credit about responsive the that and been are tighter. have written to of banks financing, about think and that that being things project-specific

We are we position use where not in project-specific financing. a

the and capital We are self-funded do, to have given the tap for almost everything ability that so size we to if our needed. public markets, into we

to was advantage It’s have that appear. the the we the the that are to I our send to think that do might when give capitalized. not And that we have create credit land open put mindset, way So, I into than kind opportunities a always-on got gotten that to potentially more to message think dislocation it crisis, banking take opportunity development, of always have us flexibility spec other decision desire could might land an had, of ground, us. acquisition, tremendous any any which got we comes there or ears the there and for we trying tighter, of a kind any of has because

Got guys. it. luck Ryan. Good Thanks

Markets. we at And will RBC next Dahl Capital move to Mike

morning. taking Good my for Thanks questions.

land your is did bit spend land raise [ph] and quite you market quarter. follow-up on Just the versus dynamics, on a top up dynamics last the end a

more in acquisition more either going something penciling development spend of you care walk from take that away year, to So, you increase of I any acq ask, of with something of look advantage is that spend would thought is either of kind in just this deals core incorporating terms and flex in or disruptions spend? kind on as later that the else or highlight you forecast that wanted you or a potential that to potential changed, to

That is ground. Yes. just Fair our question. we see what the projection of on

it deal increase for in bit us we more as relative confidence absorptions of gives anything have in would transactions, M&A not we little land in happen the that so we looking at from the that are we haven’t projected – does increase. and sort any some that, anticipate or that that it. pricing evaluate separate the flow the or a seen, incorporate that we of overall And would stability But

it. Got

up which you was called order you interesting. buyer the out community absorption follow-up, trends by you but segment XX% that help Okay. in in on I Thanks the total segments. Bob. active adult? maybe think then then said down or the time, segment, us Could first two And other move understand was time our my XXs count up maybe by the pretty the first

that while. We haven’t level a of given detail in

perspective, count we community heard are investing entry a you from the in say, think level. I have us

quite is – was But have first as a And all, you of buyer first positions, largely the the XX% time. count. the across those flexibility and time. we the was bigger had saw, – then time. So, adult growth community all It lot don’t oriented so to are towards it spread segments across active they those our in but much our the three interestingly, we next more move-up in that growth was over in the don’t

Thank Got it. you. Okay.

Thanks Mike.

Sachs. We will move next Maklari at to Susan Goldman

Thank you. Good morning everyone.

SG&A. the is question bit a First talking about

you do you deliveries the just level you Can trending? are of over there. you expect headcount cautiously can as adding that some You where think time And targeting? some about of sense mentioned that how go you that’s give are that,

with the think Susan, Yes. for highlighted in prepared Bob in his potential year. production remarks, just the I increased

our raised have production We potential by to X,XXX. X,XXX

up the to bit. been of added and where headcount So, construction matches just we have that able sales in we the little right volume kind have up a turn there locations

so highlighted, I there, will as message will you see maintain of hidden our no to that an there nor – think be dilution percentage revenue, a to continue We leverage should would we Bob leverage SG&A expectation rates.

you this Okay. quarter the any bit the authorization here? talk as of forward? a well. Can And buybacks increased And are stock the your that on you you of how buyback to about on thoughts the appetite going thinking cadence

of But made guidance, we Yes. don’t our Susan. forward Board increase appetite, decision the I provide the billion. authorization are in increased very pleased think terms We the authorization, which by $X to

shows it allocation a think nearly a philosophy, going which for been years. part that for part I has we XX on of have got be capital consistent a continued our appetite to this

that not, if for living the we to virtue, make consistency it’s we allocation virtue, a our up if capital is think have should shareholders. philosophy articulated that consistency we demonstrating are I are we So, of

Thank and good Okay. luck. you

Suisse. Oppenheim We will Credit go next to Dan at

tougher you just am handling per it’s spec you wondering terms the curious much. higher spec West Are conditions, I price if can community some Hi. where – in thinking have Thanks talked and more about you are other do of you very in about in much of you I West how talk points at just challenging? are the you have was doing the where you about less than that? how regions?

terms Seattle, Colorado, also for Vegas, includes New Las Nevada, Dan, Yes. us, and markets, Mexico. of but California the the coastal it in West, encompasses

a different and multifamily So, the lot a we cities types in we of coastal West. three get four-story into build When markets, of geographies there and product mix is product. and the

And generally nature. actually by spec just start so as those buildings the

anything not spec there is necessarily concerned there So, about. and that is there we are

seen have markets started strengthening months, and Las and particularly trends in – Phoenix sales Vegas and highlight over two positive I three those actually up get back have some start to see positive to to pretty We footing. the and the firm we last – have we in would months West, some on to

we continuing some those the think markets that that probably are higher. and attention Southeast two the done still have on points of we pay so that California regional bank are whole, exceptionally pretty Seattle, is places relative price tech-heavy. our more markets West generally directly way and well. to by a areas optimistic Florida, challenged. the crisis, of Texas, of kind very positioned The are but to Affordability business Northern I are – are the just the impacted those is the Also about are couple more So, to

talked – the improvement to the say we time on Sure. specs? guess I coming driven cycle just think It shorter in makes you sense. times much and down. about much by cycle is And those about if conversion, some you from How contract specs the closing how versus times would

final. build time, made, being and Well, some buyer. us about side. Dan, to really spec It’s to particularly But close long to related talk when we the are looking where is, a it by take it on has from improved start overall way does we which time flow-through cycle a we are at we separate starting gains are looking pay And we at start the it’s the certainly, purely see from quicker attention to anything cycle on within front home, a that’s to from to how end. and independent

kind now ground as measure it into frame slab the that frank we So, example, to going for stage. homes are of from an

gains are the that the front finishing end end times, to expect – we still now, of those homes but longer out are of still recognizing see end. that currently starting cycle were they on some to extend that We on of are front meaningful The homes would back construction. pretty are gains the we

up those back would trades, time to expect end the As we there get as well. homes into pick

I about backlog Thanks much. thinking was issues. terms conversion in Yes. Great. two of the Great. from very those

Patterson move at Research. Wolfe will to we Next, Truman

Thanks for questions. my taking

just it XQ market, us just more in XX% spec that community us help you said entry-level Is line the etcetera, bring March? like overall a the result in I understand you location? than a Have little help little to is. trying early bit did were where could all with bit And stronger demand believe – up you year-over-year. easier orders, incentives the exiting absorption on understand that we First That’s you better. stood underlying Could a comps, in understand bit? then quarter you all think quite where entry-level

was that. hard to going it’s to say to I react

that we results we what incentive. speculative to reflected available, number year. them. we group. actually percentage a it population important appealing in only last They that They a relatively is things have I took of fair it think I mentioned of were that some is national huge characterize total our more other But buy-down, homes it that We as have small our most and to were wouldn’t started rate of have that. buyers. been are earlier, probably that probably a is buyer have seen and we may sell – signups to have I able

is price that would level probably tends highlight locations product I excellent. the think higher the of the side I that – entry-level Truman, thing to entry one our the band, are price on The be

appeals think I to so level within that that’s buyer. still And a we product affordable a first-time the entry got range well-located have

quarter, of far the strength those is maybe progress exceeds we quarter. of quoted. And exit kind previous entry-level I though as we the you our that’s as not communities. strength rate that a of did my probably highlight questions, we of kind one if locations have for absorption so that’s the we performance some And relative as the expecting, the a guess what have for are then on as on number saw move through excellent got basis,

sales quarter. absorption of March So, our the highest was highest and rate the

we seen April. continue We into have have moved as strength

Invitation? little update can environment current the strategic Perfect. have a higher in rates cap and an been higher am that provide pushed you just might I with rates. Thanks guys. on then if the relationship with And wondering back bit

Yes.

And would We Invitation. that are probably with happy about rental. broadly single-family the the we answer question relationship with more very I have

of part small production it overall made environment. have a our We

can Invitation at big very part that. where looking number deliveries to We operators, of the are our very, build-for-rent total small of provide opportunities a a being we

X% We about how are it’s we being with once So, get in our the annual we full talked to about of it performing. capacity of something happy range deliveries.

we with still get on comfortable be, about ramped that. as we up pretty are are will track that We it and this that’s what

Thank you. Alright.

We Jadrosich will question America. take Rafe our at Bank from final of

your for wanted Thanks about tighter taking would comments morning. I potential land Good impact on credit. developers? any have you my any for the And Are on of support some you on to question. to the just your out Hi. to impact you seeing the partners Can or yourself? talk stress follow-up take could that there? to or your on more ability have option, lots

Yes. that well of They that the Candidly, no, anyway. we pretty most of self-develop deal with their the truth work great are we control the capitalized. that land market. a And folks is big we developers in are

the majority – vast actually business is not of our are We self-funded.

we partners, have deals those they typically are for well but – where got capitalized. So pretty

stronger of on you like give gross sales mentioned quantifying helpful. you. expectation, both? the versus sort the upside initial to That’s to combination improving of that or conversion improving sales your of then or contributed expectation? a which better environment can margin your upside earlier drove you was one And Any Thank the color traffic those

I better better think our really that expectations, the contributed we which Traffic, had that we to get pretty outperformance. is Conversion conversion incentives than was Yes. were to with consistent provide to expected. the and what margin was what

Alright. you. Great. Thank

today’s back for Jim the question-and-answer closing turn will any that conclude And conference session. over to I remarks. does

I time appreciate today. everybody’s

We Otherwise, meeting we any quarter. with of to in day look you the certainly questions. follow-up forward available next are remainder for for the the

Thank your conference you call. today’s for conclude does that participation. And

You may disconnect. now