TMHC - Earnings call transcript Q2 2024 | Taylor Morrison Home Corporation

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Operator

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

Mackenzie Aron

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

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

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

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

Sheryl Palmer

good Mackenzie, everyone. you, Thank and morning,

a Despite the our our price higher we growth and year-over-year Financial of closings our homes and delivered share of update the highlights, per closings exceeded us gross in our in that long-term strategic Operations Erik quarter, share our XX% while impact is and prior margin detail give business our and our $XX. book Heuser, second me will our investment market with at of rates begin, financial an Corporate quarterly will our approximately guidance VanHyfte, an Curt portfolio Curt quarter, volume during the to on provide Officer. strategy margin will XX.X%. the Joining results confidence interest and guidance. the Erik target. I on Officer; and both value $X.XX To X,XXX per land This share metrics. Today in drivers view the earnings Chief diluted average of and $XXX,XXX gross home our adjusted produced an adjusted Chief

importantly, XX%, between locations, stronger started moderation community sales interest overall The with pre-qualifications of guidance. Most home second the orders our deliver in quarter absorption homes our some than strong again this gross around during community. with our expected geographic prior year margin updated in meeting home to well-qualified a per as our to XX,XXX offerings pricing our we expect now consumer benefit and product be we experience performance of By once across this increased strength we both from prime which continue at quarter strategy. buyers pace a Following a of XX,XXX diversified would healthy with perspective, of closings X% did and appropriate movement. traffic and strength, of and but reflect outlook stability and a the needs net are portfolio. From May given April, demand year-over-year magnitude rate to monthly X the

average remarkable proves and Reserve's through target month and healthy our months X.X conditions. more a segments, we target and of rates consumers the Federal point on incentives up profitability importantly, stability the with the market positive resort the of that financially housing bottom-line portfolio well-positioned Taylor secure year, move entry resiliency over low able in better year-to-date relative lower range, generating June look our way. we achieve at we of X% have margins to seasonal gross unrest compelling challenging the home tight momentum No Because of the needed XX.X% pace via during when over once first the begin swinging X year from market macro with even X the remained offer confidence to full leaves the far normal at closings plenty have level, up than appreciate lifestyle in is However, an mortgage in are we along to margin believe X% above our our to again pricing funding. Most volatility, our remainder and saw across per political Morrison given broad assuming uncertainty, thus picking consumers interest to XX.X% activity rates absorption experienced we serve last move exceptionally data of the track we of which their year. product's patterns especially us messaging, finance the alongside range purchase, they in forward home quarters. Over and range in margins period, with are with the in demand X in adjusted our shift once July levels the recover while to providing this gross to this despite the

expect quarters gross closings the to around reflected in for third this and XX% full year. quarter of the our We hold stability the ahead margin outlook home as in to continue improved for

with and of the Beyond our our of sharing rate for majority the to majority as intend the rich also shoppers communities, shopper construction of the home and Erik by demographic options one surveys, are XX% of of the supply a home home, generations. trends their are levels. XX% finding and limited a gravitating remain based prospective to on interest And has headline search. In to noise, available considering desirable insights we worth that about new design by In resale norms, homes. across historic after of home competitive product Texas, we provide volatility our resale units much only involving inventory customers multimillion manageable deficit in months words, prospective our option particularly responding in at our buying that other housing and buy that Florida caused affordable remain confident new toward movement and an all tell to vast And visit is of while other inventory. nearly intact, first time started of buyers interesting we our they markets, for us or constructed Home margin entry firmly on will generally customers in multiple simplified amenity newly inventory of communities are some which shortly. It's temporary I home quarter still high only a generating our this resale and is Morrison not back and need of and supported quarter, At competitive lot, of net positioned to quality send search. In well-heeled their second move-and-ready they're represented revenue. lifestyle which first their demand sales, to financial resort am our our sales, more mortgage Taylor further the considering quarter. the a forward to outsized significant a a shoppers just XX% or all closings of time, rate buyers. albeit spec those take pressure utilized have particularly customers an of desired and homes, mitigating similar buyers share the move with design second similar point, was communities, second that quarter limited lot premium flexibility. To our center generally level of financial proud the for direct on to up XX% a cash among purchase ability commitment utilize secure which making to structure personalize These when their advantage same our that pent-up their and interest combined time financing buyers tend the were accounted minimal XX% XX% or XX% first desired

to-be-built total nearly X share purchasing quarter, delivered XX% grown represent spec This in business second with cycle same strategic consumer our of believe time more reflecting same nationally Home double While XX% of by we count of a on set. of financed option trends competitive to and gross these in maximize and that high the our XX% savings, standpoint, each of average margins, our our buyers one XX%, our the spec enhanced accounted our advantages. turns packages, continue homes our our included benefits appeal. that and $XXX,XXX. From down and strong in construction support, why both XXX, to-be-built targeted to total, capture financial we primarily being time, we evolutions providing the an income shift all returns. with portfolio XXXX, the most our manage efficiencies XX% quarter based with and require sales community's benefits. At spec of has the not production Since to-be-built a is the from a the by homes success of a of closings, further score these a credit Canvas household these Taylor approach are spec orders, option ago, as has and introduced margin the Canvas have offerings of diversification offerings. overall funding nearly production meaningful second efficient had XX% our improved represented Driven to In strongly over high by Morrison the we in construction rate of years our share surprising of business, shrunk look which since payment our they our consumers of growing for customer has In quarter, home XXXX. reinforce provides

over leverage our our improving While our homes floor ability importantly, trade our plan to library has streamlined by XX%, cost, quality to and customers. deliver base, most scale been

these take ahead, that be performance strong years tier to results business in to strive historic our advantage of we of fundamentals as of all this well-positioned within the strong discussed reasons we For exceptionally morning, top to believe is I've exceed the our housing industry. deliver our

of investing efficient through balance XX% growth absorption is introduced smart our low depth sheet quarter. operational to on and closings we ability results maintaining form our refining in we home and plus and position teens model, our optimization, strong and product consistent expect deliver Our share targets cash mid-to-high our the annual go-forward am confident include and immensely company's and sufficient these in reflected to for expanding confidence to proud team's to long-term margins our outlook our basis X in capital returning and also capabilities shareholders the that in achieve These to this our process by and continue repurchases. Since attracted equity. to closings gross growth capital XX% breadth I grow targets last annualized low-to-mid our accretive generate a on business shareholders. home of pace, while through returns Supported execution

call more let head year the continued Federal we and for next a Erik. rates the turn momentum are week's Reserve into of to and meeting, that, of the remainder positive stage into after the in growth from now lower As has the cautiously positive set while interest business. With and are optimistic we we me XXXX, our awaiting fundamentals housing that clarity continuation

Erik Heuser

Thanks, good morning. Sheryl, and

has true by encouraging on X-mile a understand one in a To portfolio Sarasota, resale resale reviewing communities of To with Let team just analyzed these the conclusions. begin market a our received XXX of interest number a listings for Florida radius. give our of resale our growing intelligence assets listings community-by-community which of across dynamics, over one has investor inventory, level share me of set example, late. competitive better rightfully within

type, product directionally vintage falls pleased to directly to that be point, price competitive by listings findings the am listings considered are size, that or of I the are similar X%. However, and our those rising that after just resale would filtering communities to of other XX and markets for levels experiencing identify homes, those supply. home also number

in our and the is supply the core Texas, activity tight to to we X.X the worth of Florida, throughout in inventory or XX% also our the and assets our strategy. of MSA markets, communities analyze that These the than the value Arizona, sharing was relative of parts robust country, surrounding western It months the several reinforced For continue of particularly less resale experience average quarter. location average. findings nearly see

XX,XXX owned quarter. home quarter financing, and and control just we to pipeline structures X.X our ventures needed XX-month strategy. The sheet and supply, our or lots lots this percentage to which represented This the home with was lot closings, of relief take off seller controlled majority land land, fulfill represents X.X owned. like-minded increase years to Based was trailing end. achieve used of inventory strong to this vehicles to building lot vast tools, pipeline, on XX% of include balance lot these lot Moving at lighter beyond. growth allowing and joint option builders, to cash Equipped total with banking our at we land home million plus on arrangements. controlled our our up will development the through expect our for downs, notes acquisitions and specific is to we evaluate least of an a XX% to the $XXX building quarter asset to existing first $XXX for XX%, in and closings progress as XX% primarily Of XXXX in to XX% from million we optimal continue lot long-term which controlled new perspective, allocated coming make in total the teams deliveries in targets XXXX, quarters, focus and investment continue $XXX acquisition of to we million assets mix. From during the years

expect $X.X dependent of be deployment land of XX% investment year, remainder and to to spend tool with between to this throughout the deferral billion. full land allocated our Approximately on the development billion is $X.X ultimate our somewhat the the For year. continue investment, we of

returns As we land in quarters, lots our tools, self-develop we've control a third-party land range framework lot a development as upside financial expertise friendly sheet driven recent greater and to operational internal on of to majority balance underwriting retain our discussed and are with based strong developed the deliveries. financing gain wide increased investments compared of

experienced serve large consumer in prime builders tertiary often is on focus more targeted core might our heated we In competition addition, in for community groups, to where locations markets. than less be best submarkets

the community to the controlled end of to anticipate to with sales Curt. expectations openings new phases of our remainder On our XXX plans the call Based year we turn the growth I on community lot our are as in existing third as for master meaningful positions development front, XXX well with on bringing openings. thereafter. With and to these be market that, and activating will we the subsequent quarter focused year, of range count expected

Curt VanHyfte

quarter good I guidance will the and quarter second of year. review for and full details and Erik, now morning. the financial Thanks, third our our metrics updated

to was our or We closings quarter, income while net reported share. per $XXX income X,XXX which our during our closed diluted $X.XX diluted guidance, homes was $XXX or of billion. the $XXX,XXX, volume $X.XX of the delivered primarily per our closings and benefited prior revenue from price For net at adjusted $X.X home more million share, million total average Compared closings home an sold quarter. produced

homes had our XX,XXX to year, deliver specs. Following at expect up this X,XXX the were quarter homes XX,XXX homes between least of in on includes now these of X,XXX to approximately Only we This quarter's upside, our finished. homes. which XXX third quarter. At we XX,XXX from of prior were this homes production, guidance X,XXX end,

range the X,XXX addition to continue from the enhanced to volume X.X community be construction started to the price including to per benefiting continues From be the our in we of closing a deliveries during for in homes to with third month. year, pricing disciplined In our quarter. of expect perspective, approximately full $XXX,XXX efficiency, starts quarter or the average $XXX,XXX per $XXX,XXX highly

through specs dependent the of pricing ultimate year. the Our be mix will on the remainder of sold and closed

homes, gross full our strategy. for resiliency expect geographic our X,XXX third provided XX% earlier, around we noted financial home This the closings gross the reflecting margin healthy Turning XX.X% quarter backlog a of XX% Based by basis was consumer the similar now both adjusted to in on remained and home range, Sheryl quarter to be the a a for and to in ago reported have into diversified year. we the visibility our closings tight margins, have now XX.X% on our and and was an margins first our year XX.X% inventory margin the as and impairment. as

we margins our cost increased averages, to outlook efficiencies, above gross from pre-pandemic burden our expect capitalized a lower our debt greater reflects low-to-mid our This the and in XX% Beyond scale this leverage range. interest and production remain from year, reduced levels. operational

orders, monthly sales These Cancellation half customer the monthly and and our home. SG&A to down gross and home the pace year higher payroll equaled X.X% as which X.X% X as expenses and community, achieve pace a closings Our outlets from trends goal prequalification count increase within our orders sales X,XXX up a year requirements, a strength to was revenue. driven revenue community by a per X.X continue a of XX.X% the X Sheryl reflective are in per remain XX.X%. of broker to XXX and homes. of slight This in X.X low $XX,XXX ago. a of ending rates of primarily discussed, ending closings absorption the to ranges we was diligent percentage and of first due related X% home buyers, to X% of decline normal diversified versus range. absorption net This ago year in per from averaged community external was year-over-year year, a was ago. In deposits increased pace expect average our annual

expect the we year, to ratio X% the high range. SG&A continue an For in

continually to Beyond XXXX, ways we optimize ongoing are other committed for our and centralization efforts. reduction looking to SG&A, including cost

services continue financial gross drove ago and XX% XX.X%, million and team year of financial buyers personalized improved $XX exceptional help a of respectively. XX.X% margin ownership Our $XX from year their a capture goals. up a million achieve rate achieved suite tools from The capture services ago with as our service XX%, to its revenue up incentive of of home a

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

Our until XX.X%, our ratio financial note us XXXX, and maturity senior next flexibility. is not building providing was net home debt-to-capitalization with

to end of building home the expect XX%. a with We to range debt-to-capitalization net the in XX% year

allocation returns-driven liquidity the including maintaining form returning Our strong priorities of shareholders capital capital business, to position, unchanged share a in remain and in the repurchases. and excess our investing

X.X on X.X stock common $XXX repurchasing During of our Based of common on and stock average expect our bias and our the $XXX completed leaves quarter, of advantage full return million settled committed remain in share shares million million, diluted track million million. our we sheet approximately million first to bringing This outstanding with shares shares second this we the $XXX generation the total target the in to $XXX third meet for million total an quarter capital outstanding we the quarter, for excess the strength returns. of to a our $XXX to and year to repurchased as through strong and us to taking our and of year. upward enhance now our balance shareholders half cash repurchases

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

I Sheryl. call Now the to will turn back over

Sheryl Palmer

into with up, month, of To homes to moving the as projects you, Anderson share a Thank in Center Foundation, Through few build. financial local that as our homes, municipalities, like a serve on these we Curt. and communities and hotel sanctuary the they walking within constant XX Banner our Health treatment. partners undergo Banner places and built Taylor in which MD and the Morrison, partnership patients burden Last travel wrap our of families Cancer their highlight care began pursuit they to of for partners focus a in I'd community healing can we of trade and year, so key that Gilbert, will which eliminating patients Arizona, their better donated stays are the comfortable cancer and center we each environment. distance approximately

than next all or incredibly opportunity Another exciting support Cancer But Edition, families work hearts community Anderson's trade MD Banner to on the project possible meaningful wouldn't show's extremely first will a continue the in sustainability generous return the sustainable as and Austin, be in market. like without it for of will partners. It's signed entire Taylor an to our television deserving belonging us allowing will more This Phoenix reboot homes just integrating which you to annual successful I to be of patients our of enhance of positive will the Texas maybe for of this home the viewers exclusive practices builder be and see has of we filming millions and sixth to operations. and published that near for best episode season, into cancer invite see out of way. we Makeover: facets homes week. allow business Houston, Center in driving in on all, by report, how in all our change the Tampa, read reflected our pilot build of Morrison Extreme our early ever after Morrison Taylor primetime will heart XXXX play Home for ABC's

half I to questions. and the and open with forward hard their we I'm the work As Taylor show day, immensely move always, provide your second please Morrison Operator, and a the reporting the company our instructions. with proud our for like to to each you let's other, each efforts I'd commitment the team thank look customers, close tremendous as of participants of the you dedication. through your that, our of call year. With results to to

Operator

Rehaut [Operator of Instructions] Our JPMorgan. first question comes Michael from

Michael Rehaut

Congrats on results. the

growth how noted plus the that love in First get up terms basis, first you I flattish most question, count that your about you least meaningfully years. of controlled until thinking couple remarks over and accelerate mechanisms the lot count of noticed the to a was know or more next year. less prepared I'd closings least XX% quarter. next I until the growth year-over-year the on or expect in community at to you're lots at total

or So growth should and less we that should the expect down you're volume or desired importantly next bit from a of the maybe years of more is the if couple of at a pace, controlled coming lot count? to your expect that sales over the growth most little community more close running we

Sheryl Palmer

maybe I'll in start land. our Yes, and can Erik on kick and

we're come each years, what a company will going look than in estimating and approximately land. come, and of growth pace, years, in expect be to as through same count and long-term we both XX% really next following, guidance in and year shared both. obviously many own the the time, to think will different think to I at we we're have last in our year, 'XX our I said, the over low for yet, somewhere count confidence quite the that's that see ran substantially the you combination It's controlled our should that though which even in the community we that growth think I community X, and mid-Xs. targets have on you not closing coming to give have leaned is in and prepared At the

pick to up, want it Erik? you If

Erik Heuser

is supply coming a is a X.X good elevated the percent through bit also some and we're years also Yes, control little the traction elevated, committee. of and seeing bit land the investment

in So comments, the we're we subscription 'XX. for level prepared 'XX as the said focused, good really feel and we about really

That's today. so of dedicated and really And to activity the the 'XX focus is primary most fulfilling for committee that investment 'XX.

actually balance the feel would feeding growth. land good I pretty we supply for about say, So that

Michael Rehaut

Secondly, Without which wanted the notable. that to And guidance your gross XX-ish year, second Sheryl, year. you're mid-XX's to year. in in continuing shift several the the into is question for margins. to obviously margin, in margins next goal range, into remarks opening less the real could mentioned that next of over to long-term you more really the continue looking half the the that consistency gross giving gross last gross quarters which you expect that back type at place, you do if of have low margins, or

that trends, at you're next could As what year, major at next a you any factors your would look margin than outside change gross backlog, be little as your drive say? pricing year there material industry maybe in change, seeing let's look year's outlooks you any this lower of into cost

Sheryl Palmer

that, Do you to take want Curt?

Curt VanHyfte

getting you Yes. of benefit backlog the we're and the our different position of to rest the we've we results that. year. and our Generally for would just start we're a our margins company, of When breadth depth, achieved XXXX, look out acquisition, the with, we I business, in scale as the into now pretty look said, speaking, of the we're XXXX relative good Mike, as

relative but good some guiding as there that look at really out our in about forward-look we peers still you you've a still said, cost our point, we're of margin inflation, in that we're long-term that, not out when just outlook. lot we but there? that expect that there XXXX our mid-XX% is described. based some our long-term and -- of what so we're to headwinds And heard other range. at basis the targets looking we at relative So feel from I to we but do position to within think have as this there the have to futuristic we on within to low relative some good on profile well, to a pretty of the do our outlook, the in targets think Are we headwinds margin

Sheryl Palmer

the you And you only XXXX our thing if agree, to when look and look Michael. already and a healthy over last few Curt, the at to XXX we're add, difference. there's, spec future backlog, is Yes, between of a book our we've out maybe margins, when I'd basis the as difference to-be-built our starting backlog, quarters, we're you points generally seeing mentioned few

when get lot in the continued on to start we business, out our on move just 'XX today, active albeit confidence So look our we a up of year, business. of the trajectory adult

XX% are time as with homes. is quarter, start time will much then in generally first our specs, plus buyer higher fill probably we So inventory generally our first and margin, a which the buyers, we primarily of year each that would business come our through

us we compared we So today it to as sit Curt where feel really said, gives good. years, prior

Operator

of Markets. comes RBC Capital question Mike next from Dahl Our

Michael Dahl

the maybe order call worth the being but X.X spec Sheryl, dynamic XX%-ish order just pace tail versus half. you'd in you mentioned X.X. it so on starts to the above first on question, pace quarter, up for Normally, disciplined off this seasonally see starts, the pick the back

So maybe your how for half, the went spec plan can specifically about thinking the here? as as second you quarter and you're through you more and just starts pace talk you second balancing

Sheryl Palmer

slightly our the aligning net Yes, sales, but to quarter. with Mike. our look really sales with completely I'd as above here, mean, our consistent definitely starts sales we I right, say noted, new you're for you nothing our gross

alignment. that like actually I So

first-time before Michael, very those think this been I based quarters, our the for consumer number available the other, we seen each targeting. and XX, over on I not a the we is up pace mentioned of XX, buyer buyers. last have that as that the continue making business community sure to we've creep as really And running XX way around inventory XX, or think to It's is you've for. It's many I along with group plan consistent. see really one that you'll that

in So a you're the time, of the past. At our in I honestly, XX% serve my of like were going at than as know continue we ASP love little about to part year, the my that's look because it at see you've same first-time we difference, of of to really the long buyers, ASP plus bit in if my to-be-built the inventory to higher the half inventory. difficulty first balance like XX% I higher in look When and than guiding, I as business. the -- to-be-built seen that

we fill significant I obviously us running a our has you'll significant adjustment to in in the in But look see see don't as that ASP. community. consumer I So I at set around, it shift would expect when forward-looking general, a our spec,

I expect of our significant set specs. in don't and mix to-be-built a So shift

Erik Heuser

And would a over pile in bit, I XXX a QX there just couple Mike, on by of units. little oversold starts maybe we our

we're so backlog of and for And kind that that we QX as some sold of up making well. in QX

Michael Dahl

tell given far and summer. and I about seasonally at everyone maybe talked little went July encouraged come the I out so in traffic about, on, it's seems tough momentum, And shifting then mean, to a look, little least more have a think a the June holiday weird and month July. all But hey, gears, builders is more as

still haven't weak despite this heard confidence, apps I purchase morning, it. high really frequency was data And surprisingly if We the coming more at rates build even of down. mortgage our some weak numbers about look

helpful. any give I weeks like? quarter you little would quantification about us, maybe like as what specifically just progressed, around around and the And order be a So it talk put looked the more trends if recent numbers that, the think could you can help

Sheryl Palmer

from second without too getting and that, down April of XX over last Having slightly normal April, tell the and and being peak you I specific, saw sequentially I would the in May years, was May seasonality would Yes, back and look is Michael. best month XX April kind what that June. call I sales we I years. try said in the our quarter, can What

lag in just mentioned always effect. I quite our of prepared a But remarks, as honestly bit So strong. little a there's

strong last May, at start once and saw in June bit. both bad. But in XX through move we interest down, again, then that rates corresponding the when web saw as traffic. we But with a saw come I that we our So not pretty so June not top up moving traffic when over best, brought start look saw foot our rate a but we second traffic to years, increase X, actually down

the significantly fact, nearly you, holiday In at a up agree funky say very XX%. holiday bit again, we once strong and finish little July, we're always we a now, depending I traffic month look with how July had the was year-over-year, I'd June. our quarter for starts, given the of a is registered When to

we're And see benefiting so through June. in to was given the the from a began increased slower. it little then, week, But now that since bit holiday traffic we

with to consistent very July say have and long-term I'd So expect averages and summer. a good

Operator

comes Our next question from Bouley Matthew Barclays. of

Matthew Bouley

that communities competitive of difference and of differentiation when I and obviously your be love to around drill that your a to have Florida much But that kind one own that color how understanding mean, of quantify I kind impact in own the business. Really on community a way down to on the envision might even I'd happening helpful there what guess, was makes. there is of some inventory helpful presumably commentary. Texas still other as much nearby, would places.

that these few next will uptick pricing these or in this you and So a I'm markets is over important in just bit. can unpack little inventory you do your How months incentive impact here? to curious think impact going if decisions

Erik Heuser

time some on this. spent obviously We've

As briefly the of it's a housing perspective, appears relative rightful just some that of about number overall to and houses a mentioned from with comments, national start listed you X.X% relative the normal in the stock, if about, it maybe to look interest at the prepared backdrop to X%.

we real So start months versus X as into seen. that play. the Sheryl And also I with would national that perspective this, X seeing we've some a months are kind of come in seasonality mentioned,

able be that And like. And so in past be can mirror a at the confidence in resale that's gain actually what then the tell just to thing. would some been encouraging I you movement look lastly, and good looks to normal rearview

the just As buyers rate of X% a we've I think life happens. past, from are about because coming XX% mortgage shared our in

MSAs of the the the recently want in months you. did January so you the backdrop think little share actually Diving with mentioned, to down states that's about I February. relative that bit supply And to has deeper seeing as that a most are come and that we we

And that monitoring are we thenâ€¦ trend. So

Sheryl Palmer

right? substantially, pretty And I today. mean to from are where we February

Erik Heuser

approaching Yes, X right? to more approaching X,

Sheryl Palmer

Yes.

Erik Heuser

around And see we did the X-mile those if supply So in of terms sites, high basically X.X Xs sites of studied overall the that in you we MSA. was we versus we our at our all that markets, high look for that the months as radius relative X.X Xs. analysis of can mentioned to

So size and eliminate we drops price down of to we take feel And market. type it good within the those XX.X%. to then relative and and set in competitive vintage, those, homes terms positioning as

that new think eventually So becomes it submarket, differentiation it it impact. pricing all rightful to that interest, to seeing and We're normalizing the that glut. say to we're it of more homes. a date. appears that, we than that can a in supply of do it terms monitoring matters have say And not I a if matters it's be within again, unhealthy, would

it seeing to that not happen, date. but can we're So

Sheryl Palmer

apologize, And is we're I own globally consumer it, said we're versus seeing it think the the pile to seeing where you along, it Erik, really our starting resale, new in just preference I more and thing it's we're I within and the also if data, but see shopper struggling. only

that resale ability different can to the what very Then And from very move quickly I consumers a there. obviously contemplates seeing obviously reason to that age think provide out inventory opted of #X we're out was the you the the incentives market. home we are that that of purchase resale inspections. average have the

Erik Heuser

with only our who shoppers Yes. resale some of That a in stuff basically third shoppers considering those about that of are telling our even they're reasons. because of saying were

Sheryl Palmer

data on of that. Lot

Matthew Bouley

the maybe around unchanged The quarter. near-term the in guidance touching up effectively XX% very the I a second I from on the mean, one mean, margins. implies step second slight just second half.

on pieces, helpful. what's on right be costs, moving Just the of curious moving costs, construction to land going wrong the quantification any what's would pieces the those going incentives, kind direction, touch direction,

Curt VanHyfte

Matt. Sure,

start, houses got our position backlog we into said for to I just a this pretty overall, we've sell good would start, in earlier, to as have visibility, I many Let's with year. close. good how left We're

So more costs want overall QX, pretty sight, it's have sequentially QX. little from example, if whether real inputs, of relative as we an line QX year. good we're granular get house and to the to some for for flat you full of the But a

a didn't movement most lot there of overall for the see we So part.

our but things For year, of the a we're word. some the expecting same into down, something with, house and things again, some We're flattishness, stable all lot some somewhat the be up rest that up, that going a again, overall we're costs seeing perspective, cost pretty are those seeing will that's ground. we're course down. From of expecting come if houses that's go essentially

into visibility that's in out have here We the how playing near-term.

for think from we in guide QX we've back inflation said lot XXXX embedded I what what, mid-single cost digit the that 'XX. XXXX, was got, into to

for XXXX assumed already from that perspective. in all that's So

year. we're that and full year have said, at for I backlog we good guide QX the feel extended for like with overall, we on about So the the based really where our

Erik Heuser

market that mid-to-high come I've But land studies demand I agree, a somewhat level the word the to market, so digit we and in on than today. then we digits. land. maybe you is if stable is and always stable. that Curt. know side, competitive, out single the low said greater internal at at single our results translates maybe surveys, seems and P&L I which in land And supply mentioned land external flowing appreciation look Matt, of never And easy the through see what something but is some and

that been any the off efficiencies of we've realized. inflation so to a the of cover of lot the we've seen and because land scaling able business And we've

Operator

comes Our next from BTIG. Reichardt Carl of question

Carl Reichardt

I to to times. little the talk XX%, able down floor take talked wanted you've Sheryl, cycle count a being about option plan XX%. down about count

move growth feel significant on and number than absorption then of pre-pandemic? to headed you about higher as over the into about of sense vertical sort continue get so talking And potential we shortages, of terms labor of you or gross that be adjusted you're volume Is times. and in for side see being than historically houses focusing to 'XX market how the next higher the of do did for both the them You're count rates, your now direction builders price so years just could vertical card so that, faster mix a couple get sort able you store cycle margins to of a in able of pre-pandemic, had many?

Sheryl Palmer

really interesting a it's Yes, Carl. topic,

really of the labor we're ago. from new do we certainly think profile labor really able years the close potential I We you think given is mix that labor foundation overall the if than simplified all so competitive where more were see answer appreciate as you to I We've look today. we in to ultimate the at building technological to most just I to over is. market. your manufacturers. to product out? it's this, Today issue before the today more our apples, a the suppliers, an almost does what you continue second get the the business. markets very national Certainly and I simplicity seeing repeated, in and and to should question, help understand work when the we talent ski your for that cycle then I'd our that times. And solve our we quicker of be the certainly my much. pull look market pretty because pre-COVID industry a don't compare we're we and so say the we're I want that's tips apples bigger yet the advances at Can shifts, to to, I the time to our business, sidebar industry discussion first, And that doing question because could we going have market into to we're us efficient how you skillset do we set have around did think your the and I things have work environment second to have But and in enhance bringing have a said

tell hard much think and it'd all to honest. plays, but that of I how you be be to quite when,

Carl Reichardt

then you talk for changed Conference sort of then revenue of the June. sequentially percentage Center as you last a And in this may had along And about have Sheryl to Joint that turning with Studies sales and Housing year-over-year? can just or mentioned that, late quarter, incentives how at

of talked a just little seeing You problem. fear a consumers publicly urgency was future mathematical there bit versus a and sort maybe a the among about of that lack of

with as or the really it you situation cloudier little looking elasticity that snap we bigger that? So incentives might right a be you're Is response is, aggressive pricing? a now? see than demand does if a still are Or at exist in picture question there

Sheryl Palmer

absolutely at look different with market. buyer. June, groups, impacting it different. a Carl, pre-calls saw point consumer as what Erik think, I a and in and lifestyle stuff look when on It's actually the going momentum There's with rates settled a May about have happened One, interesting, that. couple interest we not as and resort things I just lot of for and starting Yes, significantly the time I both talked all in on and inventory example, at out I the in the

move really is fairly think in by buyer's affected stock buyer about Dow And also that activity the meaningfully. but interest that probably more that market. in we the about period, May You same affected not rates, time saw

stage more So the own group things, affect election our resort online there and impactful of was of than as our actually lifestyle were lot and amenities offering, anything. anything. the offering think that buyer to tends a communities our coming as I

greatest actually that we honestly, what really see that while higher, qualify. you'll mirror, that see impact. And to help seen were were and we the did we've had think time I I we I buyer all with pick that's down back rearview rates. up, do So first quarter-over-quarter said, incentives year-over-year. interest mean, follow in where rates as And to the momentum

remarks, that our of were take majority commitment. high a in you As my advantage of time prepared buyers able to forward first heard

So with I fed we I improvement. continued see we we seen in given today do are that and we've the hope would but think commentary where would they're traveling movement together, rates, think some

Operator

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

Alan Ratner

and I Thank you these look your and forward that always Erik calls. resale every team together to put for to compliments all the unique on the data and inventory detail quarter analysis. interesting analysis the

$XXX,XXX. question, your more I year-to-date snapshot mentioned that's on you and understanding the is think and Sheryl, My ASP forecast as difficult how what seeing a front. because bit shifting to you've But first certainly that towards that did to specs. it's more, on business helpful I want So you're there, little to been just around pieces guidance make right in moving to drill to sure I'm the ASP

XQ is for $XXX,XXX. also guidance Your

see $XXX implies range, end ASP full your quarter. But pretty to implications think And to business that not to some the example, have into Your a step expect year in out. 'XX? run that the you're probably would the quarter anything guessing a pushing fourth to price does hit wide going fourth an where high up in fourth $XXX I'm imply backlog there range mix decent in is for that, rate should I we in in model of the for of $XXX, because tell closing or to the quarter us

Curt VanHyfte

of down and to sell comes the fold Relative for we're I number, said backlog of in to to significant line for relative into for you. what's to try Yes, all going just our So look everything, for sight generally Alan, what are the backlog, at bit at close earlier, the to press that right? I'll going little release, our, a our that year. a unbundle for specs come pretty to that if mix it's it speaking the you

out year, sell more the come the the specs close and as lower So will we price down. finish we the

So of the day, the ends here of speak, magnitude yes, that being now so and on the at average in based why for into many the year sit that in we that's that as so we the elastic, is elevated end there. you're to today. full the right, QX of backlog sales how that's more right between up as now dollar it's cost year But the and end

Sheryl Palmer

I'd add, thing Alan, only important. as so, the said, is that Curt and range range so Yes, Curt, is is that

the look nearly are for QX that with premiums houses priced additional resort at is at backlog generally options. our what what about in in I are our options opportunity with the I sell backlog in up They're our completely to-be-built And highest premiums. backlog where the lifestyle, Curt Xx business think They mean, That's come Today once here, than at in those lifestyle. average. approximately math. go balance higher hopefully generally our for ASP company lifestyle the for to-be-build specs much it's our our suggested, QX, helps of lifestyle X.Xx are about lot that as is And our our XX% to resort average. additional come that our resort those fills is we are 'XX. exact ASP. Same ASP from a about higher today. year. you our our again, about they spec our all company what you look lot back the If resort and I if

Alan Ratner

probably sounds I of entry forward demand kind rate mixes spec, expect guess into see long that far level as that as stable pretty is when what would like stays to the you as going the for closing the recent run as price. it environment more

flow on cash love to in drill a question, Second little bit. I'd

lot target far a rate, every the you've home it a conversion of dollar years cash looks last haven't while. a So not is a like XXX% unusual a the and from seen but have is which concerned. seasonal X for a far net Year-to-date, builder as to that that we income, grail, builders which I deficit, a holy as cash generated as perspective, free that is perspective, guys bit about term of a of had in free from longer of talked know you a dollar seasonality

bit flow this the cash debt-to-cap year's So will try cash several based back flow for down be end, to into just imply years. less time, year-on-year. a turnover range last it same does generation guidance your year the the is cash than or ratio net inventory if on gave I At your little implied you significantly

and see and think gave You should that? generation we the moving but absorption, talk far where cash margin on you longer the So as targets about pieces what term as conversion just cash concerned? can for you is through

Curt VanHyfte

set the take in from last year, Yes, guided $X.X we as we billion. back up when $X.X about we to to growth, the That's land just that growth we step a and think look year. at XX% we've of out, an $X.X spend increase some targets this we billion it, billion

is the and at up spend look $XXX spanned seasonality of far that's year-to-date, flow as biggest the driving But billion our million So so function there it's year-over-year, factor expect with so of from and land cash end have we've between closings. we operations. taken $X.X increased now land generate $XXX to we of spent the land million to coupled year, positive of the still we in

on not record a saying said, range we're cash perspective. here going been quarters that next that over to of flow be futuristic to And that the we're the So on net building from out as 'XX, in X fans year. round leverage overall we've that we as then XX% we XX% in but to we're debt guiding

Sheryl Palmer

the And I just in. the I cash the would I Erik, continue obviously going those land to talked ability Curt, bringing in. continued would to improvement. focus in of just structure of on the of organization on of deal structure very to deal focused some our remarks, we're expect you're would we're great details our his guidance prepared have But add, and The business Erik returns see confidence a and agree, about you'd is and I of obviously, deals a hope so today. include majority on bringing

stay coming that. more tuned, you'll I So think, see on

Operator

Jay Wedbush. Instructions] [Operator next of Our from comes question McCanless

James McCanless

consumers. what that Would during said that from in adult very resort. that XQ some ago, large a the the be And going space So of includes active you little backlog active think to second your adult saw to guys focused quarter. I a of of the you given bit assuming during I'm in active most one the calendar Sheryl, And in talked is especially about minute that of competitors segment. segment adult what the love weakness hear

Just year on figure going a closings? that if out consumer full bit, weakening trying an have is to is to impact that little

Sheryl Palmer

Yes. I have Good question, you the Jay. tell of great in. deal first confidence backlog, I would of a all,

for we one our heard our our in That's same. assure company around our synonymous average. it I deposit resort and lifestyle deposits. call XX,XXX lifestyle that about they're and tend resort deposits You've the numbers adults, the active somewhere to you and

of we're back there. seen years. active look And we've impacted were a Xx by patterns And haven't overall doing think historic just I've is years been our adult then seasonal right, they say, somewhat with sales the And at that, seen trends. mentioned, Jay, and business portfolio openings last almost our darn said I I our more to what you're I adult. were this certainly is XX buyer. But inventory. But close ago. lifestyle couple seasonality business with consistent we resort active lot amenity exclusively I'd and the having year all our as #X, for what Naples Naples

flat up strong year-over-year. business basically not Sarasota Our continues

synergies go set. some about interest affected we coming, it of I portfolio create ways to and on segment amongst that us one certainly not very I that consumer of I So it was I see stay don't Esplanade I brand continue look really and the across honestly when at I the to slowest the from apart, business have many openings where nationalization and pace any there. break have rates. But think you'll concerns of our our mean, by is we our the bullish continue

book business. thing is our about our overall resort that with business Jay, XX% lifestyle business, other of participation co-broke less I our The about is really like than

James McCanless

mind I to go. was a reader, going the next that Actually, was you're place Sheryl,

through Just And for rest been high? expect couple was the guys year. to the going of risk higher remain SG&A ask dollars that co-broke have SG&A to year? to full is the expected a quarters Do it last we about the going guidance and the you than

Carl Reichardt

related our that. advertising more year, from environment take leverage standpoint, had few a out the high to cetera. forward But plan and were year us with close the costs, high couple as range SG&A in of I'll as in will little things; It on bit we're for in gives with and Jay, We sales payroll Yes, a the down confidence more and place. look yes, marketing broker front for the said, some a in. we little we QX a increased an we From some things in that et the of that. based in expenses, just half that of some get of the to rest the stick is continue back X% homes increase

that guidance the the limit nothing around would for that to achieve see full So our today ability we SG&A year.

James McCanless

what could of XQ? talk raise to prices then communities during just And quickly, percentage you about you were able

Sheryl Palmer

was it raised we just about prices. over Jay. half, -- just half, Yes, I would say we about half,

But I all XX%, XX% think all prices healthy, reduced about netted up. we in I took well was there over incentives. XX% or up when

Operator

Our of next from comes Zener question Ken Seaport Research Partners.

Kenneth Zener

margins. gross I XX% really appreciate the around comments

the backlog for your that proper ways. at might different there's you Now, if it like look clarify a longer between perhaps margin X Can and and seeing to difference spec I'd lower. that that? just context be term you're bit

Carl Reichardt

I that. we do And bit margin business XXX get historical have we little business, call about Yes, our norms relative we'll our our some our call I where points Jay, to-be-built there's or a differential, It's adult XXX which that what a a, kind course basis like several and what might our, spread of spec margin said, outsized It's active maybe several to-be-built Ken. sorry, our in mean, to of I'll I'm do between a business. differential, Ken, of spec bigger. is have sorry, basis and point

grow that and several basis our between to-be-built. might average lifestyle look bit. around to that XXX our point the a spec instances just relative at threshold you we're little resort business, But If on isolated

And so compare spec, what you would I is to-be-built the backlog, when between ask spec and we track. our it our

Sheryl Palmer

a that rates, help continue are to that spec a a to we take of going buyers heavier highly they to first-time interest spec home. our once again, lean to XX% little them Because the go payment be And on can ones the get back Ken, manage. the right? in Those is dependent, probably to

So each basis historically, were that were Curt rates XXX on lower, is several top when they right, other. we've seen point of interest honestly,

differential. really are to rates interest going drive the that So

Kenneth Zener

if exclusively if you I lot And Naples we spread region? resorts. being about in the different talked perhaps wonder long-term, could you're of the lower now, margin. You to talking but I west have take about that your see spec a where there segment to reporting think mix XX% we east terms by a lifestyle Do

today? So that how And on the play segment spec broadly. the margin into does comment regional the or if we you that difference can see

Sheryl Palmer

necessarily like little our you if a pressure buyer But Houston, would mean highest think specs, correct think by on time more I where spec in first is in where market. our that Not we first to-be-built, that's disproportionate, consumer If where of like heavily consumer margin. is be they I'm It's one Orlando, Phoenix buyer. the our Austin, put be weighted probably our me that which going for we of I weighted exception, in a honest disproportionately closings that we think be penetration it geography. the are wrong, necessarily, But on to second have most their and those take Yes. about than to like market. about actually Naples time mix QX, those necessarily not heavily bit it about more probably your more weighted consumer to buyers. Sarasota, Curt, penetration first, heavily based had, markets I the up very move highest resort I to-be-built be west serve think versus are had lifestyle, a but if around we going

Curt VanHyfte

No, that's I think fair.

Kenneth Zener

that orâ€¦ that see then by the account margin given And for difference spread we the region then does

Sheryl Palmer

for a That's like it's waiting, west. right, the

Curt VanHyfte

on the the land west. the parcel. environment west much bidders coast to buy same up just show It's a is competitive throughout in from inherently you've more land, just It's of it than country. the several got time we the it different piece in standpoint. of Yes, can rest Every much a a

compression in of the the relative So why see west the that's we the parts country. to other margins the coast on

Operator

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

Alex Barrón

months, see I a and basically you the interest guys in the rates? try maintain assuming the by sales down to interest and or your start to the that from rates was, fed come opportunity lower as incentive guess chasing do offering down your reduce an question margin incentive main your coming increase to my improve pace

Sheryl Palmer

I but think, consumer some forward are broad in on you seen when these And I right we've Yes, needs added just some incentives inflationary suggest that lower been and to I pinched I continue is focused working be with interest have what's mortgage now if our would we're meet that's needed rates with downs rates the macro tend will maybe need the very white, think quarter, why help and rates down, some savings a once interest think the going in Alex, movement. mean It there don't solutions. black the movement. customer To why depends, and some honest, coming come through also just So generally again, pressures? those cost there's those commitments bit level I be leveraged we've to environment, permanent those to little how down. buy with see cash through close. to and a customers more of

focus closing costs. incentives on we our So

give to as I I down. but just we just did came last would it single when year drop some depends, you'll rates think So had you benefit like really answer, if rates see a

Alex Barrón

I delivered Indiana as then that your in them. just as the if XX as months had number And acquired curious far was the they far before you units as acquisition, previous you

Sheryl Palmer

-- I don't to here on get for XX-month we have that. April but of in front the we think that you with certainly period, us April, back right can at

Operator

remarks. no I'll have Sheryl closing currently back for further Palmer hand We to so questions,

Sheryl Palmer

on Appreciate all you Have to a forward you everyone's progress. time next report us our today. for seeing and quarter day. to look Thank and continuing joining great

Operator

This for call. you concludes Thank today's joining. to everyone

lines. your disconnect now may You

Taylor Morrison Home (TMHC) 24 Jul 242024 Q2 Earnings call transcript