LGI Homes (NASDAQ: LGIH) reported Q1 EPS of $1.67, $0.44 better than the analyst estimate of $1.23. Revenue for the quarter came in at $454.7 million versus the consensus estimate of $432.4 million.

First Quarter 2020 Results and Comparisons to First Quarter 2019

• Net Income increased 133.7% to $42.8 million, or $1.69 Basic EPS and $1.67 Diluted EPS
• Net Income Before Income Taxes increased 153.0% to $54.9 million
• Home Sales Revenues increased 58.1% to $454.7 million
• Home Closings increased 49.4% to 1,835 homes
• Average Home Sales Price increased 5.8% to $247,808
• Gross Margin as a Percentage of Homes Sales Revenues increased 30 basis points to 23.4%
• Adjusted Gross Margin (non-GAAP) as a Percentage of Home Sales Revenues increased 40 basis points to 25.5%
• Active Selling Communities at March 31, 2020 increased 29.9% to 113
• Total Owned and Controlled Lots increased to 50,273 lots at March 31, 2020

Management Comments

“Coming into the first quarter we saw continued strong demand for LGI Homes supported by an attractive interest rate environment and a limited supply of affordable new homes in the markets where we operate,” said Eric Lipar, the Company’s Chief Executive Officer and Chairman of the Board. “We delivered record-breaking closings in January and February and had significant momentum going into March. However, efforts to control the spread of COVID-19 resulted in a global economic slowdown, motivating us to take proactive measures to position our business for the coming uncertainty. The combined impacts of social distancing, stay-at-home orders and other COVID-19 related dynamics in our markets slowed our pace of sales. Despite these headwinds, our pipeline remained strong and the efforts of our dedicated employees enabled us to close 795 homes in the month of March and deliver a record-breaking 1,835 home closings in the first quarter.”

“Due to the ongoing uncertainty in the US economy and the effects of COVID-19, the longer-term economic impacts to our business are impossible to predict at this time. Therefore, we are withdrawing our previously released 2020 guidance. We expect to provide new annual guidance when we have a clearer view of the timing of the easing of COVID-19 restrictions and better visibility to when our markets will stabilize.”

“Despite the challenging environment we encountered at the end of the first quarter, our business was stronger in April than we had originally expected and we are seeing positive momentum in recent sales trends that leads us to believe the impact from the COVID-19 pandemic may be less severe than we had originally expected. We are building, selling and closing homes across the nation every day and our customers are telling us that they are more ready than ever to move out of densely populated living situations and into homes that offer more space and privacy. As a result, our outlook for the coming months is tempered, but positive.”

Lipar concluded, “On a final note, I want to thank the dedicated and talented employees of LGI Homes. Because of your tireless efforts over the last two months, our financial position is strong and I know we are well positioned to navigate any additional challenges that emerge.”

Outlook

Due to the uncertainty regarding the effects of the COVID-19 pandemic on both the U.S. economy and the Company’s business operations and financial performance, the Company has withdrawn its previously issued guidance for 2020.

For earnings history and earnings-related data on LGI Homes (LGIH) click here.