Anywhere reports 17% revenue drop amid declining home sales
CEO Ryan Schneider said the company’s strong balance sheet with a focus on cost reductions allows the company to grow in strategic areas during the slowdown.
- A drop in home sales has resulted in lower revenues and a net income substantially less than a year ago, the company reported.
- “We are moving quickly to adjust to the market changes,” Schneider said, noting that the company will double cost reductions to $140 million in 2022.
- Anywhere will continue to strategically invest in improving the consumer experience, opening franchises and adding agents to its high-end luxury home market.
Anywhere CEO Ryan Schneider delivered a sobering third-quarter financial report Thursday, disclosing that the real estate company's $1.81 billion in revenue represents a 17% drop over a year ago.
The company had previously reported revenues of $2.19 billion for the third quarter that ended Sept. 30, 2021.
Schneider attributed lower revenues to a decrease in home sales and the loss of $99 million in revenues from the company's title group following the sale of Anywhere's title insurance underwriter.
Anywhere's net income was $55 million, which was a $59 million decrease from the same period in 2021.
Looking ahead, the company is projecting a 25% drop in home sales for the fourth quarter over last year, due to rising interest rates against a backdrop of inflation.
But Schneider also expressed optimism about the company's strong balance sheet and ability to withstand the downturn and be profitable.
Anywhere's stock has lost more than 50% of its value year over year, Nasdaq reported.
"We are moving quickly to adjust to the market changes," said Schneider, who outlined Anywhere's plans to cut costs while investing in strategic growth areas.
"I believe Anywhere is well-positioned to lead through the current environment and into the future as we continue to strategically invest to grow our core business and simplify the consumer experience," Schenider said.
He noted Anywhere's introduction of the Coldwell Banker HomePlace consumer app. "We have not pulled back on investments, because we need to be a leader in that journey," he said. "We are ready to navigate and deliver in this challenging part of the cycle."
Anywhere's brands include Coldwell Banker, Better Homes and Gardens, Century 21, Corcoran, ERA and Sotheby's International Realty.
Schneider said the company remains focused on expanding franchises, improving the consumer experience and adding agents to the luxury market, which continues to perform well.
"In our portfolio, the luxury [market] is still more resilient," Schneider said, in answer to an investor's question after the earnings report. "Our $500,000 and up listings are actually growing and not shrinking versus a year ago."
Schneider noted that the company has sharpened focus on savings and will cut $140 million by the end of 2022, up from earlier projections of $70 million.
Aggressive cost cutting by the company will continue through 2026 for a projected $300 million in savings, Chief Financial Officer Charlotte Simonell said.
For Q3, the company has $99 million in free cash flow, compared to $282 million for the same quarter in 2021.
Anywhere ended last fiscal year with $250 million in free cash flow and retired $60 million in debt, Simonelli said, noting that accrued expenses from the previous year were paid out in March.
Schneider emphasized the company's strong balance sheet, which he said gives Anywhere an advantage over competitors less prepared financially for an economic downturn.
"The emphasis on a cost focus is pretty clear and we're excited about it," he said. "We are not going to stop investing for the future. We generate the free cash flow and profitability that allows us to do that."