“We continue to project an adjusted gross margin of approximately 27.5% for the full year.”

In context

“ered 2,407 homes and generated homebuilding revenues of $2.2 billion, up 6% in units and 19% in dollars from 1 year ago. The average selling price of our 2,874 signed contracts in fiscal year 2022’s second quarter was $1,075,000, up nearly $200,000 compared to last year’s second quarter and up $53,000 over Q1. Our second quarter pre-tax income was $296 million compared to $170 million in the second quarter of fiscal 2021. Net income was $221 million or $1.85 per share diluted compared to $128 million and $1.01 per share diluted 1 year ago. Our second quarter adjusted gross margin was 26.1% compared to 24.4% in the second quarter of 2021 and 60 basis points better than we had projected. The improvement was due primarily to price, reflecting the strong demand environment over the last year. We continue to project an adjusted gross margin of approximately 27.5% for the full year. We expect the adjusted gross margin for our third quarter of fiscal year 2022 to be 27%, which implies an adjusted gross margin in excess of 29% in our fourth quarter. As Doug mentioned, we believe our fiscal year 2023 adjusted gross margin will be even better than this year’s. This is due primarily to the composition of our backlog and the pricing power we have experienced over the past year. Approximately half of our existing backlog of 11,768 homes are projected to be delivered in fiscal year 2023. And this backlog is solid. Our cancellation rates have consistently been the lowest in the industry for many decades, which speaks to the financial strength of our customers and our build-to-order model which allows our buyers to personalize their homes, becoming emotionally invested in thos”