M/I Homes, Inc. (MHO) Q1 2024 Earnings Conference Call April 24, 2024 10:30 AM ET
Company Participants
Phil Creek - Executive Vice President and CFO
Bob Schottenstein - President and CEO
Derek Klutch - President, Mortgage Company
Conference Call Participants
Alan Ratner - Zelman & Associates
Jay McCanless - Wedbush
Operator
Good morning, ladies and gentlemen. And welcome to the M/I Homes, Inc. First Quarter Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]
This call is being recorded on Wednesday, April 4, 2024. I would now like to turn the conference over to Phil Creek. Please go ahead.
Phil Creek
Thank you. Joining me on our call today is Bob Schottenstein, our CEO and President; and Derek Klutch, President of our Mortgage Company.
First, to address Regulation Fair Disclosure, we encourage you to ask any questions regarding issues that you consider material during this call, because we are prohibited from discussing significant non-public items with you directly.
And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements contained in today’s press release also applies to any comments made during this call. Also, be advised that the company undertakes no obligation to update any forward-looking statements made during this call.
With that, I’ll turn it over to Bob.
Bob Schottenstein
Thanks, Phil. Good morning and thank you all for joining us today. We had an exceptional first quarter, one of the best quarters in company history, setting first quarter records in homes delivered, revenue and income.
Homes delivered increased 8% to a record 2,158 homes. Revenue increased 5% to a record $1.05 billion and pre-tax income increased by 33% to a first quarter record of $180.2 million, equating to 17.2% of revenue. Gross margins for the quarter were very strong, coming in at 27%, 360 basis points better than a year ago and up 200 basis points sequentially, and return on equity equaled 21%.
Despite a volatile interest rate environment and continued macroeconomic uncertainties, we were very pleased with our new contracts. For the quarter, new contracts increased by 17%, owing to the strength of our communities and product offerings, and very solid across-the-Board execution on the sales front. During the quarter, we were operating, on average, in 10% more communities than a year ago.
We continue to benefit from strong housing fundamentals, including an undersupply of homes and low inventory levels in most markets. We have seen a slight uptick in used home listings in certain markets, particularly Florida. However, the use of below-market financing incentives, where necessary in select markets and targeted communities, has been and continues to be an important driver of our business.