LGIH · 10-Q · 2026Q1 · Full report
Inventory Impairment Charge
LGI Homes, Inc. · 2026-04-28 · Importance 65 · Surprise 82
Inventory impairment charges of $4.681 million were recorded in Q1 2026 (no impairment in Q1 2025), and management cites inventory-related impairment as a primary contributor to the decline in gross margin percentage (gross margin of $59.929 million, down from $73.713 million). The company reports the $4.7 million impairment contributed to lower operating results and was a material element of the drop in net income for the quarter. The filing specifies the impairment was allocated $2.4 million to the Florida segment and $2.3 million to the Central segment for the three months ended March 31, 2026. Management presents adjusted non-GAAP measures (gross margin excluding impairment, adjusted gross margin) that remove this charge to show operating performance excluding the impairment.
Key facts
- The company recorded $4.681 million of inventory impairment during the three months ended March 31, 2026 and $0 of inventory impairment during the three months ended March 31, 2025.
- Of the $4.681 million inventory impairment charge in the three months ended March 31, 2026, $2.4 million was related to the Florida reportable segment and $2.3 million was related to the Central reportable segment.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -1.3% | The company recorded $4.681 million of inventory impairment during the three months ended March 31, 2026 and $0 of inventory impairment… |
| net_income | negative | realized | -1.3% | The company recorded $4.681 million of inventory impairment during the three months ended March 31, 2026 and $0 of inventory impairment… |
| assets | negative | realized | -0.1% | The company recorded $4.681 million of inventory impairment during the three months ended March 31, 2026 and $0 of inventory impairment… |