Champion Homes (SKY), a Michigan-based manufactured, modular, and mobile homes builder, posted better-than-expected results during a difficult homebuilding sales environment. Amid a challenging market, the builder is leveraging its strong reputation and continually expanding product line to grow its customer base.
Champion’s stock shot up more than 11.0% on Wednesday after the builder released better-than-expected Q3 2026 earnings. The company largely relies on manufactured housing, an industry that has been challenged as of late with declining sales. In November 2025, HUD-Code manufactured housing production fell by more than 16.0% year over year, reflecting a challenging sales environment.
While Champion Homes’ backlog fell, net sales increased 1.8%, the average sales prices ticked up and margins fell by 190 basis points, a more modest decline than most of the stick-and-brick public builders.
During an earnings call on Wednesday, executives noted that they aim to attract more consumers who may otherwise be priced out of market-rate, stick-built single-family homes. Executives focused on the importance of building a trusted brand, Champion’s expanding product offerings, an emerging federal legislative push to streamline manufactured housing development, and how the company is planning for the upcoming spring selling season.
The importance of building trust
Skyline Homes, a Champion Homes brand, was named America’s most trusted manufactured homebuilder for the sixth year in a row last week, based on a survey conducted by Lifestory Research. All three of the most-trusted brands in the survey were Champion Homes brands, with Champion Homes ranked second and Genesis Homes third.
“Building trust with consumers is one of the most impactful ways to build awareness and referral,” Larson said. “This recognition underscores the strength of the Champion portfolio and our relentless drive to deliver a great experience for the families that purchase and live in our homes we design and build.”
In an industry still plagued by a broadly negative perception — that manufactured housing communities, which provide housing for 7.2 million American households, are dilapidated, ugly, or unsafe — building trust can be a key differentiating factor. This reputational lift correlated with relatively strong performance for Champion Homes despite a weak-demand market.
Introducing more product offerings to capture market share
Champion Homes aims to attract new buyers and expand the market for off-site-built homes. Introducing new products and floor plans across varying sizes and price points is a core part of Champion’s strategy to achieve this goal. The builder offers home models ranging from under 400 square feet to over 2,700 square feet.
Last year, Champion Homes launched the Concord Duplex Series, its first national manufactured duplex series, offering 1- to 3-bedroom floor plans ranging from 576 to 960 square feet. The builder is also focused on delivering more 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, selling for about $185,000, plus land costs.
Champion’s average selling price per U.S. home sold increased 4.6% sequentially to $99,300. This higher price point is largely due to a different product mix targeting a broader range of buyers. An increase in larger, multi-section homes was a big contributing factor.
As the spring selling season approaches, Champion Homes is working with its community channel partners to ensure adequate inventory levels. One strategy Champion executives are pushing is a temporary increase in captive retail inventory, which refers to homes that residents own while renting the land.
“It’s really in preparation of the spring selling season that we’re gonna see that uptick in inventory. So it’s more of a seasonal dynamic than an underlying dynamic within the business,” said Dave McKinstray, Executive VP, CFO and Treasurer.
Larson added that Champion Homes plans to be cautious as it rolls out inventory ahead of the spring selling season, relying on close communication with partners to ensure appropriate inventory levels.
“If you remember, years ago, there was quite a bit of build-up, and then it took a while to have that come back. What I’m encouraged by is we’ve been very calibrated with our community channel partners,” Larson said. “If they see an opportunity, we’re gonna be able to move quickly versus having that kind of languish in terms of the timing of their inventory. So our approach there is to stay in sync with them and make sure we’re flexible as we go through the spring selling season in our community channel, specifically.”
A legislative boost in the works
Congress is working on bipartisan housing legislation, including the Affordable HOMES Act, that aims to streamline the development of manufactured housing. Larson spent much of the call discussing federal legislation in progress and the importance of off-site built homes in addressing America’s housing crisis.
“I think it plays an important role and frankly, a critical role when it comes to the price point. As I talked about in my remarks, we’ve got products now that really zero in on that, expanding the addressable market for off-site built. And when you combine that with the legislation that’s being discussed, that’s really focused on affordability, it’s a great time to be in this business,” he said.
The goal of the Affordable HOMES Act is to restore HUD authority over energy standards and to lower manufactured home prices by up to $10,000 per unit.
Larson voiced his support for this policy momentum, as well as the Trump administration’s focus on manufactured housing as a solution to the housing crisis. In January, for example, Larson toured Champion’s Burleson, Texas, plant with HUD Secretary Scott Turner’s leadership team.
The bipartisan legislation would also allow manufactured homes to be built without a permanent chassis, a heavy-duty, permanent steel I-beam structure that supports the home’s foundation. This could yield additional cost savings and is a policy proposal Larson endorsed.
“We’re encouraged that the ability to have a HUD-code home without a chassis is still part of the legislative process,” he said. “Obviously, you’re seeing out of Washington, a lot of focus on housing affordability, increasing the supply of affordable homes.”
Tariffs, on the other hand, are often seen as a headwind impacting builders. However, Dave McKinstray explained that tariffs last quarter accounted for “significantly below” 1% of material costs.
“We’re assuming those same dynamics into Q4. Now, of course, on tariffs, it’s an evolving situation, so that can change based on the next potential news on it,” McKinstray said.
Looking ahead
As housing affordability worsens, executives are betting that a more diverse product offering and assistance from federal legislators will attract more buyers to Champion’s off-site built homes.
Looking ahead to Q4, Champion executives expect revenue to continue to tick up in the low single digits compared with a year earlier, although the company’s gross profit margin could fall to the 25%-26% range.
English