LGIH Q3 Profit Tops Estimates Amid Revenue Dip

**LGI Homes Navigates Challenging Market, Beats Q3 Earnings Estimates**

**THE WOODLANDS, TX – November 7, 2023** – The Woodlands-based LGI Homes Inc. (NASDAQ: LGIH) announced its third-quarter financial results today, reporting a profit that surpassed Wall Street expectations, despite a general decline in overall revenue and earnings per share compared to the same period last year. The performance suggests resilience for the homebuilder in a U.S. housing market grappling with elevated mortgage rates and evolving buyer demand.

For the third quarter, which concluded on September 30, LGI Homes posted earnings of $3.79 per share. While this figure is down from $4.08 per share reported in Q3 2022, it notably exceeded the average estimate of $3.71 per share from analysts polled by Zacks Investment Research.

The homebuilder’s revenue for Q3 2023 reached $747.8 million, a decrease from $819.3 million in the prior year’s third quarter. However, this figure still topped the $741.9 million consensus estimate from analysts, indicating stronger-than-expected sales volumes.

Operationally, LGI Homes closed 1,940 homes during the quarter, a slight reduction from 2,042 homes closed in Q3 2022. A significant positive, however, was an increase in net orders, tallying 1,757 in Q3 2023 compared to 1,607 in the third quarter of the previous year. This uptick in orders suggests a healthy pipeline for future quarters, demonstrating continued buyer interest despite market pressures. The average sales price of homes closed also dipped to $385,463 for Q3 2023, down from $401,232 year-over-year. This reduction likely reflects the company’s strategic use of incentives, such as mortgage rate buydowns, to make homeownership more accessible for its target entry-level and first-time buyer demographic in a high-interest-rate environment.

As of the end of the third quarter, LGI Homes was actively selling in 110 communities, a slight reduction from 112 communities at the close of Q3 2022. The company is known for its efficient, standardized building process, which allows it to offer more affordable homes in growing suburban and exurban markets across states like Texas, Florida, Arizona, and the Carolinas.

The broader housing market has faced headwinds from rising mortgage rates, which peaked near 8% in October, making affordability a key challenge for many potential homebuyers. Despite these challenges, new home construction has seen some advantages due to a persistent shortage of existing homes for sale. Homebuilders like LGI Homes have been able to attract buyers by offering new, move-in-ready homes and directly providing financing incentives to offset higher borrowing costs.

Prior to this earnings announcement, LGI Homes stock had already shown strong performance year-to-date, climbing 14% since the beginning of the year and outperforming the S&P 500’s 10% rise over the same period. Investors appear to be recognizing the company’s ability to adapt and execute in a volatile market.

For more details on the company’s financial performance, the official earnings release can be found on the LGI Homes Investor Relations page: ir.lgihomes.com.