Beazer Homes concluded its 2024 fiscal year with strong growth in community count, home closings, net new orders, and home building revenue.
Despite a “challenging operating environment” for much of the fiscal fourth quarter and full fiscal year, Beazer ended the year with 162 active communities, a 20.9% increase on a year-over-year basis. Chairman and CEO Allan Merrill said the community count growth contributed to revenue growth in both the fourth quarter and the full year.
“Despite higher mortgage rates, our October sales grew more than 30% versus the prior year, as we benefited from our growing community count and an improvement in sales pace,” Merrill said. “For the full year fiscal 2025, we expect further expansion of our community count to lead to growth in revenue and double-digit return on capital employed."
In the fiscal fourth quarter, ended Sept. 30, home closings increased 21.3% year-over-year to 1,496 while the average sales price for closings increased 0.7% to $523,900. As a result, home building revenue in the period grew 22.1% to $783.8 million. Net new orders in the period increased 2.6% to 1,029 despite a 13.0% decrease in orders per community per month to 2.2. The fourth quarter cancellation rate for Beazer Homes was 21.9%, up from 16.5% in the prior-year period.
For the full 2024 fiscal year, closings increased 4.8% to 4,450 homes while the average sales price of closings declined 0.5% to $515,300. Home building revenue for the full-year increased 4.3% to $2.29 billion. Net new orders increased 9.2% for the full year to 4,221 despite a 5.6% decrease in orders per community per month to 2.4.
Moving forward, Merrill said Beazer Homes does not project “significant reductions” in mortgage rates over the balance of the 2025 fiscal year, which will likely lead to a larger share of spec sales.
“As such, our outlook contemplates the specs which carry somewhat lower margins will represent more than 60% of our closings, the highest level in a decade,” Merrill said during the company’s earnings call. “Having addressed our most price-sensitive markets, we expect to improve sales paces to something closer to historical levels in the range between 2.5 and 3 sales per community per month.”
At the end of the fiscal year, Beazer Homes had 1,482 homes in backlog, a 13.4% decrease compared to the prior year. The builder’s backlog dollar value of $797.2 million was down 10.1% compared to the prior-year period.
The company generated profit of $52.1 million, or $1.69 per share, in the fourth quarter, compared to profit of $55.8 million, or $1.80 per share, in the fourth quarter of 2023. For the full fiscal year, Beazer generated $140.2 million in profit, or $4.53 per share, down from $158.7 million, or $5.16 per share, in fiscal 2023.
The company allocated $776.5 million to land acquisition and land development in fiscal 2024, up 35.5% compared to fiscal 2023. At the end of the fiscal year, Beazer controlled 28,538 lots, a 9.0% increase compared to the prior-year period.
“We have a clear path to ending fiscal 2026 with more than 200 communities. We’re on track to end this fiscal year [2025] with a community count around 180, and we have a land pipeline sufficient to ensure double-digit growth next year,” Merrill said.
In addition to financial results, Beazer Homes shared that the company is on its way to achieving its environmental goals. In the second half of the 2024 fiscal year, 92% of the company’s starts met the U.S. Department of Energy’s Zero Energy Ready standard; Merrill said by the end of fiscal 2025, the company is on track to be 100% Zero Energy Ready.
