Champion Homes exceeds expectations with a diverse product mix, product strength
Houses of Champions (SKY), a Michigan-based manufacturer of manufactured, modular, and mobile homes, posted better-than-expected results amid a tough home building sales environment. In the midst of a challenging market, the manufacturer leverages its strong reputation and continuously expands its product line to expand its customer base.
Champion’s stock rose more than 11.0% on Wednesday after the builder posted better-than-expected Q3 2026 earnings. The company is heavily reliant on manufactured homes, an industry that has been challenged recently by declining home sales. Through November 2025, the production of HUD-Code homes has declined more than 16.0% year-over-year, reflecting a challenging market environment.
While Champion Homes’ backlog fell, net sales rose 1.8%, average prices rose and margins fell 190 basis points, a more modest decline than most brick-and-mortar community builders.
During an earnings call Wednesday, executives noted that they intend to attract more buyers who may be priced out of market-rate, single-family homes built on sticks. Executives focused on the importance of building a trusted brand, Champion’s expanding product offerings, growing federal regulatory pressure to guide the development of manufactured homes, and how the company is planning for the upcoming spring sales season.
The importance of building trust
Skyline Housesa brand of Champion Homes, was named America’s most trusted homebuilder for the sixth year in a row last week, based on a survey Life Stories Research. All three of the most trusted brands in the survey were Champion Homes, with Champion Homes ranked second and Genesis houses the third time.
“Building trust with consumers is one of the most effective ways to build awareness and referrals,” Larson said. “This recognition underscores the strength of the Champion portfolio and our relentless drive to deliver a great experience for families who buy and live in the homes we design and build.”
In an industry plagued by negative stereotypes — that manufactured housing communities, which provide housing for 7.2 million American households, are outdated, ugly, or unsafe — building trust can be a key differentiator. This reputational boost is associated with Champion Homes’ strong performance despite a tough market.
We are introducing multiple product offerings to capture market share
Champion Homes aims to attract new buyers and expand the off-site housing market. Introducing new products and floor systems across a variety of sizes and price points is a key part of Champion’s strategy to achieve this goal. The builder offers home models ranging from less than 400 square feet to more than 2,700 square feet.
Last year, Champion Homes introduced the Concord Duplex Series, its first nationwide production duplex series, offering one- to three-bedroom floor plans from 576 to 960 square feet. The builder also specializes in delivering solar powered homes, as well as models with stylish and modern designs.
During the call, President and CEO Tim Larson pointed to the 1,600-square-foot Emerald Sky home, which Champion debuted at the Louisville Home + Garden Show, as one of the company’s newest models. It offers customers an affordable price, retailing around $185,000, plus land costs.
The average sales price of each US home sold increased 4.6% sequentially to $99,300. This higher price point is due to a different product mix that targets a wider range of consumers. The proliferation of larger, multi-story houses had a major impact.
As the spring selling season approaches, Champion Homes is working with its community channel partners to ensure adequate inventory levels. Another strategy being pushed by bureaucrats is a temporary increase in real estate, which refers to houses that residents own while renting out land.
“It’s in preparation for the spring selling season that we’re going to see that increase in inventory. So it’s more of a seasonal change than an underlying change in the business,” said Dave McKinstray, Executive VP, CFO and Treasurer.
Larson added that Champion Homes plans to be vigilant as it releases its inventory ahead of the spring selling season, relying on close communication with partners to ensure proper inventory levels.
“If you remember, years ago, there was a little bit of structure, and it took a while for that to come back. What I’m encouraged by is that we’ve become more comparable to our community channel partners,” Larson said. “If they see an opportunity, we’ll be able to move faster versus that kind of inertia in terms of their inventory timing. So our approach there is to stay in tune with them and make sure we’re flexible as we go through the spring sales season on our community channel, especially.”
Legal development at work
Congress is working on bipartisan housing legislation, including the Affordable HOMES Act, which aims to facilitate the development of affordable housing. Larson spent much of the call discussing ongoing federal regulations and the importance of off-site housing in solving America’s housing crisis.
“I think it plays an important role and frankly, an important role when it comes to the price point. As I mentioned in my remarks, we have products now that do not enter into that, which expands the addressable market for off-site construction. And when you combine that with the legislation that is being discussed, that is focused on purchasing, it is a very good time for business,” he said.
The goal of the Affordable HOMES Act is to restore HUD’s authority over energy standards and lower manufactured home prices by up to $10,000 per unit.
Larson expressed his support for this policy push, as well as the Trump administration’s focus on affordable housing as a solution to the housing crisis. In January, for example, Larson visited Champion’s Burleson, Texas, and HUD Secretary Scott Turner leadership center.
The bipartisan legislation would also allow manufactured homes to be built without a permanent chassis, a heavy-duty, permanent I-beam steel structure that supports the home’s foundation. This could yield additional cost savings and is a policy recommendation endorsed by Larson.
“We are encouraged that the ability to have a HUD coded home off-chassis is still part of the legal process,” he said. “Obviously, you see in Washington, there’s a lot of focus on housing, which increases the supply of affordable housing.”
Taxes, on the other hand, are often seen as a windfall for builders. However, Dave McKinstray explained that the prices for the last quarter accounted for “well below” 1% of the cost of goods.
“We’re taking that same strength into Q4. Now, of course, in terms of costs, it’s a dynamic situation, so that could change based on the next issues that might come into it,” McKinstray said.
Looking ahead
As housing affordability worsens, executives are betting that product offerings and help from state legislatures will attract more buyers to Champion’s off-site homes.
Looking ahead to Q4, Champion’s management expects revenue to continue to increase in the low single digits compared to last year, although the company’s gross profit margin may fall to 25%-26%.
