Company: HOVVB
Filing Date: 2025-05-30
Form Type: 10-Q
Source: 0001753926-25-000907
Chunk: 13

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-05-30
Form: 10-Q
Item: Part I, Item 2
Chunk 13
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.3% for the three and six months ended April 30, 2024. The decrease in gross margin percentage for the three and six months ended April 30, 2025 was primarily due to increased use of incentives and concessions, including additional mortgage interest rate buydowns, to make our homes more affordable.

Land and lot sale expenses and gross margins are set forth below:

Three Months Ended 

Six Months Ended

April 30, 

April 30,

 (In thousands)  

2025 

2024 

2025

2024

 Land and lot sales  
 
$
12,604

$
213

$
19,430

$
1,553

 Cost of sales, excluding interest  

5,689

117

10,234

882

 Land and lot sales gross margin, excluding interest  

6,915

96

9,196

671

 Land and lot sales interest expense  

-

-

618

-

 Land and lot sales gross margin, including interest  
 
$
6,915

$
96

$
8,578

$
671

Land sales are ancillary to our homebuilding operations and are expected to continue in the future but may fluctuate significantly.

32    

Homebuilding: Inventory Impairments and Land Option Write-Offs

Inventory impairments and land option write-offs reflects certain inventories we have either written off or written down to their estimated fair value totaling $3.1 million and $0.2 million in expense for the three months ended April 30, 2025 and 2024, respectively, and $4.1 million and $0.5 million during the six months ended April 30, 2025 and 2024, respectively. Inventory impairments amounted to $1.2 million during the three
and six months ended April 30, 2025. There were no inventory impairments during the three and six months ended April 30, 2024. The impairment
recorded for fiscal 2025 was for one community in the Northeast segment.
We wrote-off residential land option, approval and engineering costs across each of our segments during the first half of fiscal 2025 and 2024.

Homebuilding: Selling, General and Administrative

Homebuilding selling, general and administrative (“SGA”) expenses increased $4.6 million to $51.1 million for the three months ended April 30, 2025 and increased $9.9 million to $105.3