Taylor Morrison Home Corporation reported first quarter 2025 results, with adjusted diluted earnings per share increasing 25% year-over-year to $2.18, exceeding prior guidance. Home closings revenue rose 11.8% to $1.83 billion, driven by an 11.6% increase in homes closed to 3,048 units. The adjusted home closings gross margin improved by 80 basis points to 24.8%.
Despite the earnings beat, the company experienced a moderation in sales velocity, with net sales orders decreasing 8.5% year-over-year to 3,374. The monthly absorption pace moderated to 3.3 per community from 3.7 a year ago, and the cancellation rate increased to 11% of gross orders. These trends reflect the impact of higher mortgage rates and macroeconomic uncertainty.
In response to market conditions, Taylor Morrison revised its full year 2025 guidance. The company now expects to deliver between 13,000 to 13,500 homes, down from the prior range of 13,500-14,000. The home closings gross margin is anticipated to be around 23%, at the low end of the previous range. Planned homebuilding land investment was also adjusted down to approximately $2.4 billion from $2.6 billion.
Chairman and CEO Sheryl Palmer acknowledged that 2025 is expected to be a "speed bump" on the path to 20,000 closings by 2028. The company emphasizes a disciplined approach to balancing pace and price through its diversified portfolio, aiming to generate low-to-mid 20% gross margins and high-teen returns on equity over time.
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