Following a strong end to the year, LGI Homes remains committed to growing its business in 2024, spearheaded by a targeted community count growth rate of 25% to 30%.

“Our priorities this year are reflected in our full 2024 guidance and include increasing community count, growing closings and revenue, and further improving profitability,” Eric Lipar, chairman and CEO of LGI Homes, said during the builder’s earnings call.

Community count growth has remained a consistent goal for the builder, with LGI Homes increasing its total number of active communities 18.2% in 2023 to 117. Lipar said expanding community count “remains at the forefront” of LGI Homes’ objectives, and the land required to drive growth targets “is already owned and under development.” At the end of the 2023 fiscal year, the home builder owned 55,331 lots and controlled 15,750 lots.

According to Lipar, the builder anticipates closings will be “up double digits” in 2024 relative to 2023, while its selling prices will likely trend higher to focus on increasing margins and offsetting cost inflation.

“While inflation has moderated, current levels may prove to be more stubborn than previously expected, making the outlook for interest rates and the broader economy impossible to determine with certainty,” Lipar said. “Therefore, our focus remains on increasing leads through targeted marketing, controlling costs, efficiently building affordable, move-in ready homes at a disciplined pace, maintaining a strong balance sheet, and identifying opportunities to enhance our long-term growth and profitability.”

Quarterly Results

Home sales revenues increased 24.6% year over year in the fiscal fourth quarter to $608.4 million, driven by a 21.4% increase in home closings to 1,758 and a 2.6% increase in average sales price to $346,083. For the full year, home sales revenues increased 2.3% to $2.4 billion on a 1.6% increase in home closings to 6,729 and a 0.7% increase in average sales price to $350,510.

Lipar said the company’s top five markets for 2023 were Dallas-Fort Worth (9.1 closings per community per month); Charlotte, North Carolina (8.6); Northern California (8.3); Fort Pierce, Florida (8.1); and Las Vegas (7.3).

LGI Homes, No. 15 on the 2023 BUILDER 100 list, reported 1,561 gross orders and 971 net orders in the fourth quarter, with a cancellation rate of 37.8%. For the full year, the builder reported 6,617 net orders and a cancellation rate of 25.4%. The home builder ended the year with 590 homes in backlog, valued at $224.9 million.

In the fourth quarter, LGI Homes increased profit 52.7% year over year to $52.1 million, or $2.19 per diluted share. The results missed Wall Street projections; the consensus estimate from analysts surveyed by Zacks Investment Research for LGI Homes was earnings of $2.69 per share. For the full year, profit decreased 39% to $199.2 million, or $8.42 per diluted share.

“Our success navigating last year’s headwinds and delivering profitable results demonstrates the effectiveness of our systems and people and gives us confidence as we head into 2024,” Lipar said.

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