Century Communities, Inc. (NYSE:CCS) Q2 2023 Earnings Call Transcript

Dale Francescon: Nothing that’s consistent right now, Alan, but it’s really more from our perspective looking forward and just being in the business for a long time, knowing how things work. And we’re seeing it obviously right now on lumber, but we think we’re going to see it in some other categories as well. But nothing that I could say, it’s on the ground happening today in numerous areas, that is not the case. But on the other hand, we’re flat from basically net-net flat from where we were on a sequential quarter basis. So, certainly, it is not going down at this point.

Alan Ratner: Got it. And just a strategic question on this. So, on one hand, demand is strong today and surprisingly strong, and it feels like you guys definitely have some pricing power as evidenced by the incentives pulling back. Let’s say costs were to claw back-up a bit here. How aggressive would you be on trying to pass that along to the consumer? Or are you perhaps a bit more cautious given where affordability is today than perhaps you would have been two years ago, let’s say, when rates were half of where they are today?

Dale Francescon: Yes, I think rates today clearly impact this. But I’m not sure it’s any different than where we were going back a year and a half or so ago. As our costs were rising, we were moving along the additional costs wherever we could. We would try to do the same thing going forward. Now, there’s obviously with the higher interest rates that would be more difficult to do. But to the extent in a particular subdivision we can do it, we will. And if we can’t in another sub-division, then we’ll just have to absorb it.

Alan Ratner: Got it. Appreciate the thoughts. Thanks for all the time.

Dale Francescon: Thank you.

Operator: Our next question comes from Michael Rehaut with JPMorgan. Please go ahead.

Andrew Hassen: Hi. Thank you for taking my question. This is Andrew Hassen for Mike. Nice quarter. I just wanted to ask — yes, of course I just want to ask in terms of the absorptions you saw this quarter, it looks like you were doing a little bit better than you would historically. And kind of just given your confidence going forward, do you kind of expect that to continue in terms of just beating your historical seasonality a little bit or any puts and takes there?

Dale Francescon: Well, part of that is all driven by what we have available for sale. And it still comes down to as things are nearing completion, we have been selling them and we have very little in the way of completed inventory. So, with that in mind, some of the seasonality is impacted by what we have available for sale as well as the same thing with absorption rates. So, as we look at it, as Dave commented earlier, some of our sales pace is going to be impacted on when homes are nearing completion and where they are in the construction cycle. So, that kind of affects the actual absorptions as well.

Andrew Hassen: That makes sense. I appreciate it. Thank you for that. I also wanted to ask maybe, I don’t think I heard earlier in the call about kind of what you saw month-to-month in terms of demand trends and maybe what you are seeing in July so far?

Dale Francescon: Yes, I would say that month-to-month, we saw some of the seasonality moving through the quarter from April through June. Then as I look at July, on a sales basis, we are up 15% or so over last year at this point and continue to see some of that seasonality play into our numbers going from June to the end of July.

Andrew Hassen: I appreciate that. And then as you continue to invest in land to support growth, where do you aim to be maybe long-term in terms of your optioned lot percentage?