Lennar Corp.’s first-quarter earnings call on Thursday morning began with sad news. The company said one of its associates, Pete Anderson, senior customer service representative in its Seattle Division, died as a result of COVID-19 on March 2, one of the earliest victims of the virus. That loss set the tone for much of the call as Executive Chairman Stuart Miller emphasized the issue of workplace safety amid the virus outbreak.
“This very sad call to action focused our management’s attention on the new day unfolding even as we mourned the loss of an associate,” said Miller on the call. “Our leadership team immediately began to take action to make safety first.”
Noting the absence of a playbook for dealing with the health and financial effects of the virus, Miller said, “There is only management. Hands-on management.”
To that end, the company has instituted daily management meetings focused on the safety of its associates and customers and daily wellness checks for all associates.
“Even in the current environment, we are selling homes,” Miller said, adding that new orders for the first two weeks of March were up 16%. Traffic has remained “relatively strong,” he said, adding, “We have started to see a slowdown in traffic over the past several days while at the same time we have seen a higher conversion rate of traffic to sales as those coming out are more serious buyers.” Later in the call, he said, “We have not yet seen an increase in cancellations, nor an impact on closings.”
However, the company has taken numerous steps regarding safety and financial stability. It has paused land purchases by pushing out closing dates, moved to appointment only sales, one family at a time, and introduced digital initiatives including drive-through closings, which can be completed from a car, and a virtual new-home orientation process in which buyers can walk through their completed home via Facetime. It has suspended all non-emergency customer care. And it has encouraged as many of its associates as possible to work from home.
Miller said the company has not yet seen an impact on trades or the supply chain or disruptions in the mortgage market. It is working with municipalities to ensure that COs continue to be issued, he said. Later, the company reported that local designations of construction as an essential service are holding up.
Miller also said Leading Builders of America on Wednesday implemented a industry wide plan to find construction masks and eye protection that could be donated to hospitals. That initiative was mentioned during a White House press briefing on Thursday.
“The entire industry jumped right in and got to work to show the country that our home builders care,” said Miller. I’ve very proud to be partners with all of my competitors as we seek to contribute in this time of great need.”
In his closing remarks, Miller stated the obvious. “We are keenly aware that this landscape can change very quickly.”
