Cavco Industries Q4 2025: Key Contradictions on Production Rates, Tariff Impacts, and Demand Trends

Production rate and order trends, tariff impact on costs, pricing trends and seasonality, tariff impact on costs, and demand and order trends are the key contradictions discussed in Cavco Industries' latest 2025Q4 earnings call.



Factory Shipments and Backlog:
- Cavco Industries reported unit shipments were up almost 29% year-over-year in Q4 2025, with backlogs declining initially but seeing a healthy increase in March.
- The increase in shipments was boosted by a pickup in orders in March following challenging weather in February, indicating a steady rise in demand.

Revenue and Factory-Bilt Housing Segment:
- Net revenue for Q4 2025 was $508.4 million, up 21% compared to the prior year, driven by a 28.5% increase in homes sold, although average revenue per home sold decreased by 4.7%.
- Increased production rates and strategic investments in plant improvements contributed to revenue growth, despite a slight decline in average revenue per home.

Financial Services and Margins:
- Financial services segment net revenue decreased to $20.5 million, down 5.2% from the prior year, due to fewer loan sales and insurance policies in force.
- Gross margin in the factory-built housing segment remained stable, dropping only 10 basis points year-over-year to 22.3%, despite lower average selling prices.

Tariffs and Cost Management:
- Cavco Industries anticipates a potential 5% to 8% increase in material costs due to tariffs on components sourced from China, impacting about half of the cost of goods sold.
- The company is closely monitoring supply chain and vendor relationships to proactively manage potential impacts from tariffs.