Meritage Homes Corporation (MTH) Q2 2024 Earnings Call Transcript

Meritage Homes recently held its second quarter 2024 earnings call, highlighting a period of growth and strategic refocusing for the company. The call was led by Steve Hilton, Executive Chairman; Phillippe Lord, CEO; and Hilla Sferruzza, Executive Vice President and CFO. The call provided insights into the company's performance, growth strategies, and market conditions.

Strong Second Quarter Performance

Meritage Homes reported a robust second quarter with sales orders of 3,799 homes, marking a 14% year-over-year increase. The company's strategy of focusing on move-in ready homes and quick turnaround times contributed to an average absorption pace of 4.5 net sales per month. This strategy has proven successful, with home closing revenue reaching $1.7 billion and a home closing gross margin of 25.9%.

Market Conditions and Strategic Evolution

The call highlighted Meritage Homes' strategic pivot towards move-in ready homes and quick turnaround times. This shift has allowed the company to effectively compete with resale inventory, targeting the largest segments of homebuyer demand. The company's focus on realtor relationships and 60-day closing guarantees is expected to further enhance its competitiveness in the market.

Financial Highlights and Guidance

The earnings call also provided updates on Meritage Homes' financial performance. The company's strong second quarter results were underscored by a 16% year-over-year increase in book value per share and a return on equity of 18.3%. Looking ahead, the company is projecting full-year closings between 14,750 and 15,500 units, with home closing revenue of $6.1 billion to $6.3 billion.

Recognition and Awards

Meritage Homes was recognized for its corporate stewardship, receiving the Avid Cup for exceptional customer satisfaction scores for the third consecutive year. The company also celebrated its longstanding partnership with the EPA, accepting the Market Leader award for certified homes for the 11th time. Additionally, Meritage Homes was named one of America's Climate Leaders by USA Today and added to the list of the 2024-2025 Best Companies to work for.

Looking Ahead

The call concluded with a look towards the future, with Meritage Homes expressing optimism about its strategic direction and market positioning. The company's focus on move-in ready homes and quick turnaround times is expected to continue driving growth and enhancing competitiveness. With a strong balance sheet and strategic evolution underway, Meritage Homes is well-positioned for long-term success.