Hovnanian Enterprises, Inc. reported its financial results for the first quarter of fiscal 2026, revealing a total revenue of $631.9 million, a decrease of 6.2% from $673.6 million in the same period last year. The decline was primarily driven by a 12.4% drop in home deliveries, which totaled 1,099 homes, compared to 1,254 homes delivered in the prior year. Despite this, the average sales price of homes increased by 1.6% to $523,894. The company's net income for the quarter was $20.9 million, down from $28.2 million a year earlier, resulting in earnings per share of $2.80, compared to $3.88 in the previous year.
The company's financial performance reflects significant changes compared to the previous fiscal period. Homebuilding revenues fell to $612.9 million from $656.7 million, while financial services revenue increased to $19 million from $16.9 million. The gross margin percentage for homebuilding decreased to 10.1% from 15.2%, attributed to increased incentives and concessions aimed at maintaining sales pace in a challenging market. Selling, general, and administrative expenses were $84 million, representing 13.3% of total revenues, slightly up from 12.9% in the prior year.
Strategically, Hovnanian made notable developments, including the acquisition of a controlling interest in a previously unconsolidated joint venture in the Kingdom of Saudi Arabia, which contributed to a $26.8 million gain on consolidation. The company also reported a significant increase in customer deposits, which rose to $176.8 million, primarily due to stage payments received from the KSA operations. The total inventory, excluding consolidated inventory not owned, increased to $1.3 billion, reflecting the consolidation of KSA assets.
Operationally, Hovnanian's domestic contract backlog decreased to 1,335 homes valued at $782.7 million, a 16% decline compared to the previous year. The company reported a 3.1% increase in net domestic contracts, indicating a slight improvement in sales pace despite ongoing market volatility. The company maintained a strong liquidity position with $471.4 million available, including $339.9 million in cash and cash equivalents and $125 million in borrowing capacity under its senior secured revolving credit facility.
Looking ahead, Hovnanian remains cautious about the housing market, citing ongoing economic uncertainties, including inflation and fluctuating mortgage rates. The company plans to continue leveraging its inventory of quick move-in homes to meet buyer demand while managing costs and construction timelines. The outlook for fiscal 2026 remains uncertain, with management emphasizing the need to adapt to changing market conditions while focusing on maintaining sales momentum.
About HOVNANIAN ENTERPRISES INC
Hovnanian Enterprises, Inc. is a leading U.S. homebuilder and provider of financial services, designing, constructing, marketing, and selling single-family homes, townhomes, and condominiums across multiple markets. It offers diverse housing options for various buyer segments, manages land development and construction, and provides mortgage and title services. The company emphasizes quality, customer satisfaction, and strategic land acquisition to achieve growth and operational efficiency.
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