Cavco Industries Posts Record-Breaking Year Amid Industry Headwinds
Cavco Industries, a leading manufacturer of manufactured and modular housing, has reported an impressive fiscal year 2026, despite a slight decline in total industry HUD shipments. In a call with investors on May 22nd, the company's leadership highlighted several key achievements that demonstrate their commitment to growth and innovation.
In a year where many predicted a decline in the industry due to market fluctuations, Cavco Industries managed to ship an all-time high of 20,842 homes. This impressive feat was coupled with a 14% increase in operating income, excluding a non-cash write-off from the previous year. The company's peak-to-peak ability to deliver homes has also seen significant improvement due to ongoing plant modernization projects and the acquisition of American Homestar.
The company's President and CEO, Bill Boor, attributed this success to their multi-year strategy to transform their go-to-market approach. By rolling out a nationwide product line framework in Q4, Cavco Industries has made it easier for potential buyers to shop their homes and for dealer partners to help customers find the perfect fit. This unified branding under the Cavco name is expected to contribute to market share growth in an industry that is anticipated to grow in the coming years.
Turning to the fourth quarter specifically, revenue was down 5% sequentially but up 8% compared to last year. Operating income was down 6% sequentially but increased by 33% year-over-year, excluding the non-cash write-down from Q4 2025. While Q4 weather is expected to be challenging across the northern U.S., Cavco Industries managed to navigate these headwinds and finish the quarter with almost 25% more floors in the backlog than when it started.
The company's capacity utilization for the quarter was approximately 70%, and their production pace was generally in balance with orders through most of the quarter. However, a large pickup in wholesale orders in March led to an expansion of backlogs late in the quarter. The order pickup was significant enough that Cavco Industries finished the quarter with five to seven weeks of backlog, which was growing as they closed out the quarter.
Despite average selling price being down about 2% sequentially, the company's leadership remains optimistic. Their retail sales were healthy but down from a very strong third quarter, while wholesale orders and backlog growth have shown promising signs. The combination of these three positive signals gives Cavco Industries the opportunity to push production where lower backlogs had been holding their plants back.
