#United States #Scottsdale #financial results #Taylor Morrison #homebuilder

Taylor Morrison Reports First Quarter 2025 Results

On April 23, 2025, Taylor Morrison Home Corporation (NYSE: TMHC), a notable name in land development and homebuilding across the United States, released its financial results for the first quarter ending March 31, 2025. The company showed considerable growth in several key metrics, indicating robust performance and effective management strategies.

Financial Highlights

The first quarter of 2025 marked a noteworthy achievement for Taylor Morrison, with net income reported at $213 million or $2.07 per diluted share. Adjusted net income amounted to $225 million, translating to $2.18 per diluted share. Home closings revenue reached $1.8 billion, a 12% increase compared to the previous year, attributed to a total of 3,048 home closings—also up 12% year-over-year—with an average sale price of $600,000. The gross margin on home closings was 24.0%, with adjusted gross margin sitting at 24.8%, reflecting an increase of 80 basis points year-on-year.

Despite these positive developments, net sales orders experienced an 8% decline to 3,374 from the prior year. The monthly absorption pace showed a reduction to 3.3, from a prior near-record of 3.7, though this still surpassed pre-pandemic averages.

Operational Insights

Sheryl Palmer, the company's CEO and Chairman, highlighted the strategic responses to the fluctuating market. She emphasized that the initial slow sales in January gave way to stabilization in February and gradual growth in March. Palmer noted that their diversified consumer and product strategy has significantly contributed to both volume and margin resilience amidst the current market volatility.

For 2025, Taylor Morrison anticipates delivering between 13,000 to 13,500 homes, with an expected gross margin around 23%. This forecast underscores the company's adaptability and long-term growth vision. Palmer also mentioned that although 2025 might present challenges, the company remains on track toward achieving a target of 20,000 annual closings by 2028, emphasizing shareholder returns while maintaining balance sheet health.

Land and Investment Strategy

Taylor Morrison's land investment for the quarter totaled $469 million, of which 46% was development-related. The company controlled 86,266 lots, with a record 59% held off balance sheet. This strategic positioning in managing land and lot supply is crucial, especially given that total homebuilding lots represent a potential supply of 6.5 years based on trailing twelve-month closings.

Balance Sheet Strength

The company reported total liquidity of approximately $1.3 billion, ensuring it has the financial stability to weather economic fluctuations. The leverage ratio stood at 24.3%, indicating a solid capital structure. Additionally, Taylor Morrison repurchased 2.2 million shares for $135 million, reflecting confidence in its market positioning and shareholder value.

Looking Ahead

As we move into the second quarter of 2025, the company expects approximately 3,200 home closings at an average price around $585,000, alongside a gross margin of about 23%. This strategic outlook, coupled with the anticipated stabilization in market conditions, places Taylor Morrison in a favorable trajectory for the remainder of the year.

In summary, Taylor Morrison's strong Q1 performance demonstrates both resilience and potential for future growth within the homebuilding sector. The company’s diversified approach, coupled with strategic land management and a focus on enhancing customer engagement, positions it well for sustainable success in the competitive housing market.