Nobility Homes Reports Decline in Net Sales and Profitability Amid Market Challenges

Nobility Homes, Inc. reported its financial results for the three and nine months ended August 3, 2024, revealing a decline in both net sales and profitability compared to the same periods in the previous fiscal year.

For the three months ended August 3, 2024, net sales totaled $13.8 million, down from $14.7 million for the same period in 2023. Similarly, net sales for the nine months decreased to $40.1 million from $48.6 million in the prior year. The decrease in sales is attributed to fewer retail homes sold and manufactured, higher mortgage interest rates, and delays in production materials. The number of new homes sold through company-owned sales centers also fell, with 79 homes sold in Q3 2024 compared to 84 in Q3 2023.

Gross profit for the three months ended August 3, 2024, was $4.6 million, down from $5.1 million in the prior year, while gross profit for the nine months decreased from $16.9 million to $13.5 million. The gross profit margin as a percentage of net sales also declined, from 35% to 33% for Q3 and from 35% to 34% for the nine-month period. This decline was influenced by a shift towards lower-cost homes and a decrease in the number of homes manufactured and sold.

Operating income for the three months was $2.6 million, down from $3.1 million in Q3 2023, and for the nine months, it decreased from $10.7 million to $7.5 million. Net income for the three months ended August 3, 2024, was $2.2 million ($0.67 per share), compared to $2.7 million ($0.80 per share) in the same quarter of the previous year. For the nine months, net income fell to $6.5 million ($2.00 per share) from $8.6 million ($2.56 per share).

On the balance sheet, total current assets slightly decreased to $50.6 million from $50.7 million, while total assets declined from $65.7 million to $64.3 million. Notably, total current liabilities saw a significant reduction from $13.0 million to $9.8 million, contributing to an increase in stockholders' equity from $52.7 million to $54.5 million. Retained earnings also rose from $71.0 million to $72.6 million.

The company reported cash and cash equivalents of $13.1 million at the end of the reporting period, down from $13.9 million at the beginning of the period. Additionally, the Board of Directors authorized a share repurchase program for up to 200,000 shares during fiscal year 2024, although no shares were repurchased in the third quarter.

Overall, Nobility Homes, Inc. faced challenges in sales and profitability during the reported periods, reflecting broader market conditions and operational adjustments.