Smith Douglas Homes, the No. 36 company on the 2024 Builder 100 list, reported double-digit year-over-year growth in home closings, revenue, and orders in the fiscal second quarter.
“Despite ongoing affordability challenges for our home buyers, we have achieved another robust financial quarter due to our team’s unwavering commitment to operational excellence, combined with strong market demand,” Greg Bennett, vice chairman and CEO of Smith Douglas Homes, said.
During the quarter, the builder closed 653 homes with an average sales price of $338,000, representing a 17% increase in closings and a 4.3% increase in average sales price compared to the second quarter of 2023. Smith Douglas generated home closings revenue of $220.9 million in the quarter, a 22% increase compared to the prior-year period. As a result, the company reported profit of $24.7 million in the second quarter compared to profit of $30.7 million the second quarter of 2023.
During the quarter, Smith Douglas reported net new home orders of 715, a 17% increase on a year-over-year basis. The company’s cancellation rate in the quarter was 11.8%, compared to 8.7% in the year-prior period. The builder ended the quarter with 1,173 homes in backlog and an active community count of 75.
“During the quarter, we have continued our prudent capital deployment in support of growth while maintaining our disciplined commitment to our land light strategy. We grew our total controlled lot position by 12% for the quarter, with 96% of our unstarted controlled lots being controlled via option agreement,” said executive vice president and chief financial officer Russ Devendorf.
At quarter’s end, Smith Douglas Homes had 15,842 total controlled lots, an 81% increase compared to the second quarter of 2023. Devendorf said the company expects its lot supply will remain between a targeted range of 3.5 to 5.5 years supply.
“We feel good about the current state of our operations. We believe we have the right strategy in place in the right markets to allow us to grow our home building operations beyond what they are today,” Bennett said. “The macro environment remains positive and there continues to remain a strong desire for homeownership in this country. As a result, we believe we are well positioned to achieve our goals this year and beyond.”
