Legacy Housing 2025 Q1 Earnings Misses Targets as Net Income Falls 32.1%

Legacy Housing (LEGH) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The total revenue saw a decline of 15.7%, down to $34.95 million from $41.47 million in the previous year. Legacy Housing's earnings per share (EPS) also fell to $0.43 from $0.62. These results were below analysts' expectations of $0.57 EPS and $44.13 million in revenue. The company did not adjust its guidance but emphasized efforts to enhance operational efficiency and strategies aimed at future growth.

Revenue
Legacy Housing's total revenue for 2025 Q1 fell to $34.95 million, marking a 15.7% decline from the previous year. Product sales accounted for $24.29 million, while interest from consumer, MHP, and dealer loans contributed $10.65 million. Other revenue streams added $725,000, bringing the total net revenue to $35.67 million.

Earnings/Net Income
Legacy Housing's EPS declined 30.6% to $0.43 in 2025 Q1 from $0.62 in 2024 Q1. Meanwhile, the company's net income declined to $10.28 million in 2025 Q1, down 32.1% from $15.14 million reported in 2024 Q1. The decline in EPS indicates a challenging quarter for the company.

Price Action
The stock price of Legacy Housing edged down 1.53% during the latest trading day, increased 2.53% over the past week, and rose 8.06% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Legacy Housing (LEGH) shares after their revenue increase quarter-over-quarter on the financial report release date and holding for 30 days resulted in moderate returns, albeit with considerable volatility and risk. This approach yielded a compound annual growth rate (CAGR) of 14.25%, which trailed the benchmark by 1.17 percentage points. Despite these returns, the strategy was marked by a maximum drawdown of -58.87% and a Sharpe ratio of 0.33, underscoring the need for diligent risk management in the face of such volatility.

CEO Commentary
Duncan Bates, President and Chief Executive Officer, highlighted that while inventory finance sales exceeded expectations, the first quarter results were adversely impacted by lower-than-expected shipments to communities. He emphasized recent strategic changes, including simplifying the product offering and introducing a new financing solution for community owners, along with adding industry veterans to key manufacturing and retail positions. Bates expressed excitement over these developments, noting that Legacy’s book value surpassed $500 million for the first time, and conveyed optimism about the company’s direction for the year.

Guidance
Legacy Housing did not provide specific quantitative targets for the upcoming quarter. However, the CEO indicated a focus on enhancing operational efficiency and leveraging new strategies to drive future growth. The company aims to improve shipment volumes and maintain positive momentum in inventory finance sales, reflecting a commitment to strengthening market positioning and addressing current challenges.

Additional News
In recent corporate developments, MetLife Investment Management LLC increased its position in Legacy Housing by 18.5% during the fourth quarter, while Advisory Research Inc. boosted its stake by 34%. Moreover, Vanguard Group Inc. raised its stake by 14.9%, indicating continued institutional interest in the company. In terms of insider trading, Curtis Drew Hodgson made 13 stock sales in the past six months, selling 148,487 shares for approximately $3.79 million. These moves highlight active engagement and investment interest in Legacy Housing's stock.