By Warren.AI in May 2025 — May 27, 2025

Champion Homes, Inc. (SKY)

Champion Homes, Inc. is a leading North American factory-built housing producer reporting FY 2025 net sales of $2.48 billion and net income of $201.6 million ($198.4 million to shareholders). The company operates 43 U.S. and 5 Canadian manufacturing facilities under brands such as Champion, Genes...

Champion Homes, Inc. (SKY) 2025 10-K Review: Leading the Factory-Built Housing Charge

In March 2025 Champion Homes, Inc. (formerly Skyline Champion Corporation) closed its fiscal year with net sales of $2.48 billion and net income of $201.6 million ($198.4 million attributable to shareholders). This deep-dive 10-K review explores how Champion Homes built on its industry leadership in factory-built and modular homes, delivering robust cash flows, disciplined margins, and growth via strategic acquisitions—while navigating cyclical, interest-rate, and supply-chain risks.

Company Snapshot

Champion Homes, Inc. is a tenured, large-accelerated filer on the NYSE (Symbol: SKY), headquartered in Troy, Michigan. As of March 29, 2025:**

Revenue: $2.48 billion (up 22.7% YoY)
Net Income: $201.6 million ($198.4 million to shareholders)
EBITDA: $285 million (11.5% margin)
Manufacturing Plants: 43 in the U.S., 5 in Western Canada
Retail Centers: 72 factory-direct sites
Headcount: ~9,000 employees
Market Cap (Sept 2024): $5.35 billion (non-affiliate market value)

Champion Homes is the #1 modular homebuilder in the U.S. and #2 manufactured housing producer—shipping over 25,000 homes in FY 2025.

Market Position and Business Model

Factory-Built Housing Leadership

Champion Homes competes in the affordable single-family housing market by building:

HUD-code manufactured homes (single- and multi-section)
Modular homes (higher-end, site-like finish)
Park-model RVs, ADUs & cabins

Key competitive advantages:

Scale & Footprint: 48 U.S. & Canadian plants, serving 20 states + 3 Canadian provinces
Manufacturing Efficiency: Indoor assembly line, <3 months from order to ship
Diverse Distribution: 75% through independent retailers, 25% factory-direct
Financing Access: Co-ventures (Champion Financing) + FEMA disaster relief contracts
Brand Portfolio: 15+ brand names (Champion, Genesis, Skyline, Regional Homes, Titan, etc.)

Distribution and Services

Independent Retailers: Floor-plan financing, repurchase commitments spread across multiple lenders.
Company-Owned Centers: 72 locations, 18% of revenue; higher unit margins but higher SG&A intensity.
Champion Financing: Joint venture with Triad Financial Services for dealer floor plans and consumer chattel loans.

Strategic Pillars and ESG

Champion Homes organizes its growth around five pillars:

Customer-Centric Execution: Digital tools, faster workflows, retail penetration
Product Innovation: Standardized options, Energy Star® homes, site-like amenities
Omnichannel Sales: Acquisitions (Regional Homes, Factory Expo), online configurators, post-sale service
Brand & Demand Gen: Digital marketing, social media engagement, referrals
Operational Excellence: Cloud ERP, automation, continuous improvement

ESG Focus

Champion Homes’ environmental, social, and governance commitments include:

Factory Efficiency: <50% site-built cost, 7–15% material waste reduction
Energy Performance: 5,500+ Energy Star® certified homes in FY 2025
Reforestation: 1M+ trees planted since 2021 (Arbor Day partnership)
Safety & Human Capital: OSHA training, EHS audits, anti-trafficking policy
Governance: Independent board, ethics hotline, diversity & inclusion policies

Financial Highlights

Income Statement Analysis

FY 2025 vs. FY 2024:

Net Sales: $2.48 billion (+22.7%)
U.S. Factory-Built: $2.36 billion (+25.1%)
Canadian Factory-Built: $94 million (–13.7%)
Corporate/Other: $31 million (+3.7%)
Gross Profit: $664 million (26.7% margin vs. 24.0%)
SG&A: $427 million (17.2% of sales vs. 15.3%)
Operating Income: $237 million (9.5% margin vs. 8.7%)
Net Income: $201.6 million (8.1% margin vs. 7.2%)
EPS (Diluted): $3.42 vs. $2.53

Key drivers:

Higher Volumes: 25k homes sold vs. 21k prior year (+20.6%)
Acquisition Impact: Regional Homes added 5.5 months in FY 2024 vs. full year contribution in FY 2025
Margin Recovery: No $34.5 million water-intrusion charge in FY 2025
Controlled SG&A: Despite acquisitions, SG&A as % of sales held under 18%

Segment Performance

U.S. Factory-Built EBITDA: $330 million
Canadian Factory-Built EBITDA: $15 million
Corporate/Other: $(67 million) (Champion Financing ramp + holding company costs)

Balance Sheet & Liquidity

Cash & Equivalents: $610 million vs. $495 million
Working Capital: $635 million vs. $528 million
Debt: $24.8 million long-term; $106 million floor-plan
Credit Facility: $200 million revolver (no principal draws), $32 million in letters of credit
Leverage: Net debt $0.56 billion vs. LTM EBITDA $285 million

Cash Flow Dynamics

Operating Cash Flow: +$241 million vs. +$223 million
Capital Investments: –$50 million (new plants + automation)
Acquisitions: –$283 million (Regional Homes)
Equity Repurchase: –$80 million (first full program year)

Champion Homes generated strong free cash flow, funding acquisitions and buybacks while maintaining flexibility under its revolving credit facility.

Key Risk Factors

Champion Homes discloses a robust set of risks (Item 1A). Material resiliency factors include:

Cyclical & Interest-Sensitive Industry: Housing demand tied to rates, consumer confidence
Raw Material Price & Supply: Lumber, steel, drywall shortages; tariff risk
Labor Costs & Turnover: Direct labor shortages, wage inflation, high turnover rates
Zoning & Regulatory: HUD-code changes, local restrictions, environmental standards
Product & Warranty Liability: Water intrusion remediation ($34.5 million accrued)
Financing Availability: GSE chattel debt pilot, floor-plan lender concentration
Acquisition Integration: Regional Homes ERP/retail controls weakness (material weakness in ICFR)
ESG & Supply Chain Ethics: Labor, environmental compliance, cybersecurity threats

Champion Homes uses diversified plant footprint, captive finance, and digital tools to mitigate these pressures. The material weakness in internal controls over financial reporting stems from Retail systems post-acquisition and is being remediated through system integration and enhanced reviews.

Investment Outlook and Score

Score: 7.5 / 10

Champion Homes enters FY 2026 with an:

Established market share and leading brands in factory-built housing
Strong balance sheet: Minimal debt, robust cash, attractive leverage
Proven cash flow: >$200 million annually to support growth initiatives
Strategic runway: Six idled plants, digital transformation, financing arm

Positives: Scale, manufacturing efficiency, backlog near $343 million, price‐cost pass-through, M&A pipeline

Headwinds: Elevated interest rates, inflation, cyclical housing outlook, zoning uncertainty, integration risks

Verdict: A solid “buy” for value seekers in affordable housing with industry leadership signs—but cyclical dynamics and remediating control gaps temper the verdict.

Conclusion

Champion Homes stands as the factory-built housing titan. Its FY 2025 results underscore resilient demand, margin expansion, and disciplined capital deployment. Strategic acquisitions and captive finance broaden its moat—while a family of recognized brands and a six-year backlog portend growth ahead.

Potential investors should weigh cyclical housing risks, HUD-code changes, and inflationary pressures against Champion Homes’ manufacturing scale and balance sheet strength. Abundant operating cash flow and near-term buybacks support shareholder returns.

Investors seeking exposure to affordable housing, backed by predictable factory production and a rising backlog, will find Champion Homesa0(“SKY”) a compelling, moderate-risk allocation—rated 7.5/10.