Cavco Industries, Inc.

What they do

Cavco designs and builds factory-built homes on an assembly-line process across 33 homebuilding production lines, 31 in the United States and two in Ojinaga, Mexico. Homes are distributed through independent distribution points in 48 states and Canada and 92 Company-owned U.S. retail stores, 57 of which are in Texas. CountryPlace Acceptance Corp. originates and services conforming and non-conforming mortgages and home-only loans, and Standard Casualty Company writes manufactured-home property and casualty insurance primarily in Texas, Arizona, New Mexico and Nevada.

Revenue drivers

• Factory-built housing — The dominant segment: $585.97 million of the $609.96 million net revenue in the quarter ended June 27, 2026, up 9.4% year over year on 5,657 homes sold at $103,584 average revenue per home.
• Financial services — Smaller segment at $23.99 million of net revenue in the latest quarter, up 13.3% year over year, comprising CountryPlace mortgage origination/servicing and Standard Casualty insurance.
• Home sales volume — Cavco sold 9,507 factory-built modules in the latest quarter, up 6.8%, and 5,657 homes, up 4.4%, with capacity utilization approximately 75%.
• Financial services gross profit — Financial services gross profit was $12.57 million, or 52.4% of segment net revenue, versus $8.66 million, or 40.9%, in the prior-year quarter, driven partly by increased loan sales and unrealized gains on the equity portfolio.

Recent performance

For the first quarter ended June 27, 2026, net revenue was $610 million, up 9.5% from $557 million a year earlier, with record shipments. Factory-built housing gross profit was $122.02 million, or 20.8% of segment net revenue, down from 22.6% a year earlier. Consolidated gross profit was $134.59 million, or 22.1% of net revenue, versus 23.3%. Income before income taxes was $55.8 million, down 14.6%, and net income per diluted share was $5.43 versus $6.42. Backlog rose to $298 million, or 7-9 weeks of production, from $195 million a year earlier, and the company repurchased about $30 million of stock in the quarter.

Strategy

Cavco operates on a decentralized basis, giving local operators autonomy to respond to regional demand while holding them accountable for performance. Marketing targets entry-level and move-up buyers, buyers aged 55 and older, manufactured housing community owners, subdivision developers and vacation home buyers, with an emphasis on customization within a factory production environment. Growth has included acquisition, with the American Homestar acquisition cited as a driver of higher home sales volume. The company returned capital through roughly $30 million of repurchases in the latest quarter, leaving $188 million available under board authorizations. Management also points to regulatory change, including the 21st Century ROAD to Housing Act and state zoning legislation, as supportive of factory-built housing.

Risks

• Industry shipment decline — Manufactured Housing Institute data showed industry home shipments of 41,453 in the calendar year through May 2026, down 7.7% from 44,927 in the same period last year.
• Consumer financing dependence — Cavco states that sales of affordable homes are largely dependent on consumers' ability to obtain financing, which depends on employment status and other economic factors.
• Emergency and macro disruption — The 10-K risk factors cite local or national emergencies, severe weather, natural disasters, health epidemics/pandemics and financial institution instability as potential adverse effects on demand, supply chain, labor and liquidity.
• Margin pressure — Factory-built housing gross profit as a percentage of net revenue fell to 20.8% in the latest quarter from 22.6% a year earlier, and consolidated gross margin declined 1.2 points to 22.1%.

Outlook

Management describes continuing strong order momentum and a backlog of $298 million, representing 7-9 weeks of production, up from $195 million a year earlier. CEO Bill Boor cited regulatory progress, including the bipartisan 21st Century ROAD to Housing Act and increasing state legislation to improve zoning access at the local level. The company still characterizes the macro-economic environment for prospective homebuyers as challenging, while stating the future is bright for factory-built housing solutions.