Cavco Navigates Regional Market Divergence, Posts Strong Q2 2026 Results Fueled by Northern U.S. Strength

PHOENIX – Cavco Industries, Inc. (NASDAQ: CVCO), a leading producer of manufactured housing, reported solid financial results for its second quarter of fiscal 2026, showcasing resilience amid a patchy U.S. housing market. The company's performance was bolstered by strong demand across the Northern United States, which helped offset a notable slowdown in the Southeast.

For the quarter ended September 27, 2025, net revenue reached $556.5 million, a 9.7% increase compared to the prior year period. Operating profit surged approximately 27% year-over-year to $67.3 million, while diluted earnings per share came in at $6.55, up from $5.28 a year ago.

In a conference call with analysts, President and CEO Bill Boor emphasized a "marked difference" in regional performance. "Using published industry data, year-to-date national shipments are up over 3% through August. In many regions, mainly across the Northern U.S., shipments are up double digits," Boor stated. He contrasted this with the Southeast, a region bounded by the Carolinas down to Louisiana, where year-to-date shipments have declined about 4%, with a steeper 10% drop in July and August.

The company responded proactively to the regional shift. "We did need to slow our Southeast production in Q2, and the plants reacted well," Boor explained, detailing adjustments made through extended holiday downtime and production rate reductions. He was quick to note that backlogs in the Southeast have recently stabilized and even edged upward, suggesting the market is finding a new balance.

A standout performer was the Financial Services segment, which swung from a loss last year to an $8 million operating profit this quarter. Boor credited aggressive actions to pare unprofitable insurance policies and changes to underwriting and claims management for the majority of the improvement, beyond just favorable weather conditions.

CFO Allison Aden provided further financial detail, noting a consolidated gross profit margin of 24.2%, up 130 basis points. She also addressed investor concerns around tariff impacts, estimating a $2 million hit to cost of goods in Q2 from existing tariffs. Aden cautioned that recent increases to Canadian lumber duties, now at 35% with a potential additional 10% tariff, present an incremental cost pressure not yet quantified in the company's previous guidance range of $2 million to $5.5 million per quarter.

Integration of the recently acquired American Homestar is proceeding "quickly and very well," according to Boor. The deal, closed after the quarter-end for approximately $190 million in cash, adds two manufacturing plants and about 20 retail locations, significantly boosting Cavco's retail integration rate.

Looking ahead, management struck a cautiously optimistic tone, highlighting its nimble operational model. "Executing and shifting markets is really what it's all about," Boor concluded. "We know the conditions will change, and we just want to react to them very well."

Analyst & Investor Commentary:

"The regional story is fascinating and speaks to the underlying fragmentation of the affordable housing demand," said Michael Thorne, portfolio manager at Horizon Capital. "Cavco's ability to flex production locally is a competitive advantage that doesn't show up on the balance sheet but clearly impacts the bottom line."

"The financial services turnaround is impressive and looks sustainable," noted Sarah Chen, a senior analyst with ClearView Research. "It diversifies their earnings stream and provides a nice hedge against cyclical swings in home manufacturing."

"I'm less sanguine," countered David R. Miller, an independent housing market blogger known for his critical stance. "This 'nimbleness' they boast about is just a fancy word for cutting production when demand slips. The Southeast slowdown is a canary in the coal mine for overpriced housing, and no amount of operational tweaking will fix a broader affordability crisis. The tariff headwinds are real, and passing those costs through will only exacerbate the demand problem."

"The American Homestar acquisition looks strategically sound," observed Patricia Lawson, a retired manufacturing executive and retail investor. "Increasing their retail footprint gives them more control over the customer experience and pricing. In a volatile market, that direct channel is invaluable."