Company: HOVVB
Filing Date: 2025-02-28
Form Type: 10-Q
Source: 0001753926-25-000367
Chunk: 15

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-28
Form: 10-Q
Item: Part I, Item 2
Chunk 15
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, 2025, compared to 21.8% for the three months ended January 31, 2024. The decrease in gross margin percentage for the three months ended January 31, 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 

January 31, 

 (In thousands)  

2025 

2024 

 Land and lot sales  
 
$
6,826

$
1,340

 Cost of sales, excluding interest  

4,545

765

 Land and lot sales gross margin, excluding interest  

2,281

575

 Land and lot sales interest expense  

618

-

 Land and lot sales gross margin, including interest  
 
$
1,663

$
575

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

30    

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 $1.0 million and $0.3 million in expense for the three months ended January 31, 2025 and 2024, respectively. There were no inventory impairments during either of the three months ended January 31, 2025 and 2024. We wrote-off residential land option, approval and engineering costs across each of our segments during the first quarter of fiscal 2025, and in our Northeast and Southeast segments during the first quarter of fiscal 2024.

Homebuilding: Selling, General and Administrative

Homebuilding selling, general and administrative (“SGA”) expenses increased $5.3 million to $54.3 million for the three months ended January 31, 2025 compared to the same period in the prior year. The increase for the three months ended January 31, 2025 compared to the same period in the prior year was primarily due to an increase in selling overhead from higher advertising costs and an increase in total compensation expense as a result of an increase in headcount and bonuses related to improved overall market conditions and specific company performance. 

Homebuilding: Key Performance Indicators

Net Contracts Per Active Selling Community

Net contracts per active selling community for both the three months ended January 31, 2025 and 2024 were 9.