TROY, Mich. - Skyline Champion Corporation (NYSE: NYSE:SKY), a prominent producer of factory-built housing, reported a downturn in its fourth quarter financial performance, missing analyst expectations for both earnings per share (EPS) and revenue. Following the earnings release, the company's stock experienced a modest decline of 1%.
The company posted an adjusted EPS of $0.62, falling short of the consensus estimate of $0.68. Revenue for the quarter also lagged behind projections, reaching $536.4 million against an anticipated $560.9 million.
The fourth quarter results represent a 9.1% increase in net sales compared to the same period last year, driven by a 15.3% rise in U.S. homes sold, which included $108.1 million from the recent Regional Homes acquisition. However, the average selling price (ASP) per U.S. home sold declined by 3.1% to $89,800, attributed to changes in product mix and a decrease in material surcharges. Despite the increased sales volume, the company's gross profit margin contracted significantly, with a 1,040-basis point drop to 18.3%.
Skyline Champion's net income for the quarter plummeted by 95.2% to $2.8 million, primarily due to a $34.5 million charge related to water intrusion issues in homes sold from one of its plants prior to fiscal 2022. Adjusted net income also saw a substantial decrease of 37.7% to $36.0 million, and the adjusted EBITDA margin contracted by 560 basis points to 9.9%.
Mark Yost, Skyline Champion's President and CEO, acknowledged the challenges faced during the quarter, including market headwinds and destocking by channel partners. "Fiscal 2024 was a transformative year for our organization, marked by strategic investments and expanding our market presence," Yost said. "Despite some significant market headwinds, we made substantial progress."
The company's full-year net sales also saw a 22.3% decrease to $2.0 billion, with a gross profit margin contraction of 740 basis points to 24.0%.
Looking ahead, Skyline Champion remains focused on integrating its strategic investments and enhancing capabilities to capitalize on growth opportunities. The company has also announced the approval of a new share repurchase program for up to $100 million of its common stock, reflecting confidence in its financial position and commitment to delivering shareholder value.
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