Meritage Homes Corporation (NYSE:MTH) Q3 2023 Earnings Call Transcript

Ken Zener : Okay. That’s right. No, no. I mean, I just want to be focused on that one more time. All right. So look, here’s my main question. I’m glad we’re not focusing on monthly pace. You have your fresh target, it’s going to swing around. It seems like things are stabilizing. Could you talk to the gross margins you have now, I believe you mentioned a more normalized gross margin of 22%, given your pace concept. Is that — did I hear that correct?

Phillippe Lord: Yes. I think what you’ve heard is that historically, we feel like, over time, we can underwrite to somewhere between 21% and 22% direct gross margins when we’re buying new land, et cetera. Obviously, our margins are much higher than that today because we have cheap land flowing through, markets strong, et cetera, et cetera, but 21% to 22% is kind of our long-term outlook over time if things are normal.

Ken Zener : Right. And I appreciate that clarity because I’m going to tie it into your for target in terms of what that kind of implies from a return on capital perspective, if you would. Thank you very much.

Emily Tadano: Perfect. Thank you.

Phillippe Lord: So thank you very much, operator. I think that was our last question. We appreciate everyone being on the call today. Appreciate all the questions and interest in our organization, and we look forward to talking to you next time. Thank you.

Operator: Thank you. This concludes today’s call. All parties may disconnect. Have a good day.