Hovnanian Enterprises, Inc. (NYSE:HOV) Q1 2023 Earnings Call Transcript

Ara Hovnanian: I would say the QMIs tend to have little lower margins, more incentives, especially around the mortgage rate buy down or other discount closing costs. The QMI builds have been able to hold up, and it remains to be seen, hopefully, those will hold and take it to the end of construction and delivery. But right now, we are seeing a better margin on the build orders.

Larry Sorsby: It wouldn’t surprise me, given the increase in demand to see that trend reverse. Because we’re seeing an increased demand for QMI highest and I think part of it is we just have not been a big QMI builder in the past, and we are in the process of reeducating our sales team about charging more for QMIs rather than less, per QMI given that increased demand. It’s not fully in place yet, but I think we’re going to reverse that trend.

Jesse Lederman: That’s very helpful color. Thank you again.

Operator: Thank you. This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to, Mr. Hovnanian for any further remarks.

Ara Hovnanian: Very good. Thank you very much. The results we just reported in terms of profitability and deliveries are lagging results was really key or new sales, gross margins on our new sales and website and on-site traffic. I’m happy to say those leading indicators are really moving very — in a very positive direction. So we look forward to giving you improved results in the near upcoming quarters. Thank you very much.

Operator: Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.