Cavco Profit Falls Even as Revenue and Backlog Climb
Cavco Industries closed its first quarter of fiscal 2027 with a backlog of $298 million, up more than 50% from three months earlier, even as per-share profit fell for the second time in three quarters.
Cavco Industries (CVCO), the manufactured-housing builder, reported net revenue of $610 million for its first quarter of fiscal 2027, up 9.5% from $557 million a year earlier. Diluted earnings per share fell to $5.43 from $6.42, a 15.4% decline.
The gap between rising revenue and falling profit has now shown up in two of the last three quarters. Pretax income dropped 16.9% in the third quarter of fiscal 2026, rebounded with a 22.4% gain in the second quarter, and has now fallen again, down 14.6% to $55.8 million from $65.3 million. Full-year fiscal 2026 pretax income had risen 15.9%, making the pattern this year one of quarter-to-quarter swings rather than a steady trend in either direction.
Revenue growth itself has been more consistent, running at 9.7% in the second quarter of fiscal 2026, 11.3% in the third, 8.2% in the fourth, and 9.5% now. Home sales volume has not kept pace with that revenue growth. Volume rose 5.4% in the second quarter of fiscal 2026, slowed to 3.2% in the third amid a broader industry pullback in HUD-code shipments, fell 0.7% in the fourth, and grew 4.4% in the latest quarter. Revenue has outrun units sold in part because net revenue per home sold in the factory-built segment rose 4.7% to $103,584, extending gains of 4.4% in the third quarter and 8.9% in the fourth.
Margin has moved in opposite directions across Cavco's two segments. Factory-built housing gross margin compressed to 20.8% from 22.6% a year earlier, the fourth straight quarter of year-over-year contraction in that segment following declines to 21.2% in the fourth quarter of fiscal 2026 and 21.7% in the third. Financial services gross margin moved the other way, expanding to 52.4% from 40.9%, continuing a run of large gains that included a jump to 69.4% from 36.8% in the fourth quarter of fiscal 2026. Factory-built SG&A rose 17.1% to $73.97 million due to integration costs tied to American Homestar, the manufactured-housing dealer it acquired on September 29, 2025. American Homestar contributed $42 million of revenue and 343 homes in its first full quarter last September; by the latest quarter it was no longer broken out separately, folded into consolidated results and a driver of the factory-built segment's 9.4% revenue increase.
Backlog offered the clearest signal of forward demand. It jumped to $298 million, representing seven to nine weeks of production, up more than 50% from $195 million at the end of the fourth quarter and from $210 million and $160 million in the two quarters before that. The prior year's backlog had been shrinking, falling from $197 million to $195 million over fiscal 2026, making the sequential jump a reversal rather than a continuation.
Capital expenditures nearly tripled to $25.5 million from $9.0 million a year earlier, a step-up tied to construction of a new facility in El Mirage, Arizona, first disclosed in the fourth quarter of fiscal 2026.
Cavco slowed its pace of share repurchases to roughly $30 million in the quarter, down from about $44 million in the third quarter of fiscal 2026 and from roughly $160 million across all of fiscal 2026. The company had $188 million remaining under its buyback authorization following a new $150 million program approved May 18, 2026.