Tri Pointe Homes Delivers Strong Q4 Results, Sets Stage for Continued Success in 2025
Tri Pointe Homes, a leading homebuilder in the United States, has reported strong fourth-quarter results, capping off an exceptional year of growth and profitability. The company's quarterly performance was marked by significant improvements in key metrics, including new home deliveries, sales revenue, and gross margin.
In the fourth quarter, Tri Pointe delivered 1,748 new homes, generating $1.2 billion in home sales revenue. This represents a substantial increase from the same period last year, reflecting the company's successful execution of its growth strategy. The company's homebuilding gross margin improved by 40 basis points to 23.3%, while SG&A as a percentage of home sales revenue was 10.3%. These improvements contributed to a pretax margin of 14%, generating $129 million of net income or $1.37 per diluted share during the quarter.
These strong fourth-quarter results were the culmination of an outstanding year for Tri Pointe, with the company delivering a record high 6,460 new homes in 2024. The full-year homebuilding gross margin was 23.3%, and net income reached $458 million or $4.83 per diluted share, representing a 40% increase year-over-year. The company also achieved record operating cash flows, redeemed $450 million of senior notes, and finished the year with the strongest balance sheet and liquidity in its history.
Tri Pointe's geographic diversification strategy has been a key driver of its success, with significant gains in Texas, where deliveries increased by 60% in 2024. The company also achieved an 11% increase in deliveries in the Carolinas. With new start-up divisions established in Salt Lake City, Orlando, and the Coastal Carolinas, Tri Pointe expects to continue this momentum into 2025.
The company's financial performance was equally impressive, with a return on average equity of 14.5%, a 270 basis point improvement over the previous year. Through its strong results and disciplined capital allocation, including share repurchases, Tri Pointe increased book value per share by 14.5% in 2024. The company remains committed to its share repurchase program for 2025, having already announced a new $250 million authorization.
Looking ahead, however, the company is cautious about the current market environment, citing softer seasonal sales trends in the third and fourth quarter, leading to a lower backlog at the start of 2025. Elevated mortgage rates, sticky inflation, uncertainty around the election, and slowing job growth have caused some consumers to stay on the sidelines. Despite these challenges, Tri Pointe remains confident in its strategy to balance price and pace to enhance margin in the current market environment.
As the company plans for 2025, it is encouraged by strong demographics, particularly the growing millennial and Gen Z buyer cohorts, and a persistent supply shortage that continue to support long-term demand. While the macro environment presents some headwinds, Tri Pointe's well-located communities and measured approach will enable it to navigate these challenges and deliver continued success in 2025.
