LGI Homes, Inc. reported a decline in financial performance for the first quarter of 2025, with home sales revenues decreasing by 10.1% to $351.4 million compared to $390.9 million in the same period of 2024. The company closed 996 homes during the quarter, down from 1,083 homes a year earlier, reflecting an 8.0% decrease in home closings. The average sales price per home also fell by 2.2% to $352,831. The gross margin as a percentage of home sales revenues decreased to 21.0% from 23.4%, primarily due to a lower average sales price and increased sales incentives.
In terms of profitability, net income for the quarter was $4.0 million, a significant drop of 76.6% from $17.1 million in the prior year. This decline was attributed to lower home sales revenues and gross margins, alongside increased selling expenses, which rose to $42.3 million from $41.1 million. The company’s operating income fell sharply to $0.2 million, down from $18.7 million in the previous year, indicating a challenging operating environment exacerbated by high mortgage rates affecting affordability.
Strategically, LGI Homes has expanded its community count, increasing from 120 active communities in March 2024 to 146 by March 2025. This expansion included 17 communities under the Terrata Homes brand. The company is also actively managing its inventory, owning and controlling 67,792 lots as of March 31, 2025, down from 70,899 lots at the end of 2024. This reduction reflects a disciplined approach to land acquisition and development amid ongoing market challenges.
The company has also made significant changes to its financing arrangements, entering into a Sixth Amendment to its Credit Agreement on April 28, 2025, which extended the maturity of certain commitments to April 2029. This amendment is expected to enhance liquidity and support ongoing operations. Looking ahead, LGI Homes anticipates continued challenges due to high mortgage rates and inflationary pressures but remains focused on leveraging its expanded community portfolio and strategic financial management to navigate the evolving market landscape.
About LGI Homes, Inc.
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