Nobility Homes Sales Drop 13%

Key Points

• Revenue declined 13.0%, from $13.8 million in Q3 FY2024 to $12.0 million in Q3 FY2025, reflecting lower retail home sales and a shift toward lower-margin dealer sales.

• Net income decreased to $1.8 million for Q3 FY2025, compared to $2.2 million for Q3 FY2024.

• The company remains debt-free with a current ratio of 7.5 and authorized a buyback of up to 200,000 shares for fiscal 2026.

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Nobility Homes (OTC:NOBH), a Florida-based manufactured home builder and retailer, reported third-quarter fiscal 2025 results on September 12, 2025. The company saw both revenue and profits declined from prior-year levels in Q3 FY2025, mainly due to softening industry demand and higher costs. Despite these challenges, it has maintained a strong balance sheet and announced a new share repurchase authorization. The period was marked by lower retail sales, margin compression, and persistent supply and labor challenges, while company leadership did not offer quantitative forward guidance for the rest of the year.

Company Overview and Strategic Focus

Nobility Homes designs, manufactures, and sells manufactured homes mainly within Florida. Its production facility is based in Ocala and it operates a network of retail sales centers spread across north and central Florida, focusing on markets within a 350-mile area to manage delivery logistics and costs.

This localized approach exposes the company to regional economic shifts but allows it to tailor its products and sales strategies closely to the Florida market. Over recent years, navigating persistent competition, and managing costs across volatile labor and materials markets have been key priorities.

Key Developments and Quarter Details

The period saw a notable decline in both sales and profitability for Q3 FY2025. Revenue dropped 13.0% year over year in Q3 FY2025, mainly due to a decrease in retail home sales at company-owned outlets during the first nine months of FY2025. Management attributed the sales shortfall to a reduction in retail sales volume, partially offset by an increase in homes sold to independent dealers. Dealer sales come with lower profit margins, adding pressure to overall profitability.

Gross profit slipped by 16.5% in Q3 FY2025 from the comparable period last year, with a gross margin of approximately 32%. This contraction reflects the impact of inflation in both materials and labor, as well as increased operating expenses from a shift in sales mix. The company indicated that higher interest rates and continued uncertainty in the economy led many prospective customers to delay or defer purchasing decisions. Florida’s manufactured housing shipments fell by 12 % over the industry’s comparable period.

The cost base was managed tightly. Despite these efforts, selling, general, and administrative expenses fell 17.8% compared to the prior year. Both operating income and net income declined by more than 15% from Q3 FY2024 to Q3 FY2025. The results emphasize the challenge of offsetting softer demand and margin pressure through cost reductions alone.

Production delays and increased costs persisted, stemming from back orders, price increases, tariffs, and ongoing labor shortages. Management stated, “labor shortages which continue to cause delays in the completion of the homes” highlighting that these supply constraints as well as input cost inflation in building products remain unresolved. No new regulatory issues surfaced, but compliance with U.S. Department of Housing and Urban Development (HUD) and Florida Building Code standards remains an operational necessity.

The company’s dependence on Florida is both a strength and a risk. All significant revenues come from within the state, and although leadership cited Florida as “one of the best long-term growth areas in the country,” this footprint leaves the business vulnerable to local economic slowdowns or weather-related disruptions. Competitive conditions remain intense, with many other regional and national manufactured home brands vying for market share.

On the capital allocation front, the Board authorized the repurchase of up to 200,000 shares for FY2026. This buyback represents about 6% of shares outstanding as of September 2025. Nobility remains debt-free and reported cash, equivalents, and short-term investments totaling $27.1 million at quarter end, with working capital of $44.8 million and a current ratio of 7.5.

Notably, customer deposits declined over the period, possibly signaling a weaker sales pipeline ahead. Inventories also shrank, which can indicate either better management discipline or lower sales expectations. The company’s strong equity base grew to $58.7 million as of Q3 FY2025, with book value per share rising to $20.08.

No unusual one-time expenses or windfalls were highlighted this quarter, though the company again outlined its ongoing exposure to cost pressures and interruptions in material supplies and labor.

Looking Ahead

Management did not provide revenue or earnings guidance for the rest of fiscal 2025 or for fiscal 2026. It stated that marketplace challenges are likely to persist through the end of fiscal 2025 and into fiscal 2026, referencing ongoing supply chain disruptions, labor shortages, and margin pressures. The leadership reiterated its goal to maintain a strong financial position and to leverage its regional expertise as industry trends gradually recover.

For the coming quarters, investors may want to watch for signs of stabilization or rebound in Florida home shipments, improvements in the sales mix favoring higher-margin retail sales, and updates on how supply costs and labor conditions evolve. Strategic capital deployment, including the recently announced share repurchase authorization, will also be a point of interest.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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