Company: HOVVB
Filing Date: 2025-08-29
Form Type: 10-Q
Source: 0001753926-25-001413
Chunk: 12

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-08-29
Form: 10-Q
Item: Part I, Item 2
Chunk 12
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 homebuilding gross margin percentage decreased to 11.7% and 13.5% for the three and nine months ended July 31, 2025, compared to 19.1% and 18.9% for the prior year periods. Total homebuilding gross margin percentage, before cost of sales interest expense and land charges decreased to 17.3% and 17.6% for the three and nine months ended July 31, 2025, compared to 22.1% and 22.2% for the three and nine months ended July 31, 2024. The decrease in gross margin percentage for the three and nine months ended July 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

Nine Months Ended

July 31,

July 31,

 (In thousands) 

2025

2024

2025

2024

 Land and lot sales 

$
1,193

$
14,230

$
20,623

$
15,783

 Cost of sales, excluding interest 

241

11,907

10,475

12,789

 Land and lot sales gross margin, excluding interest 

952

2,323

10,148

2,994

 Land and lot sales interest expense 

-

1,965

618

1,965

 Land and lot sales gross margin, including interest 

$
952

$
358

$
9,530

$
1,029

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

33

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 $16.0 million and $3.1 million in expense for the three months ended July 31, 2025 and 2024, respectively, and $20.1 million and $3.6 million during the nine months ended July 31, 2025 and 2024, respectively.

Inventory impairments amounted to $7.6 million and $8.8 million during the three and nine months ended July 31, 2025, respectively, and $2.7