Lifestyle Communities Ltd (ASX: LIC) shares are slipping again on Tuesday after the retirement living developer released its latest quarterly update.
The stock is down 0.65% to $4.59 in afternoon trade, leaving it nursing a brutal 40% decline over the past 12 months.
This comes as investors continue reassessing the Victorian housing and downsizing market backdrop.
That is keeping the shares near the bottom of their 12-month range.
Here’s what the latest numbers showed.
Sales momentum eased after a stronger prior quarter
The March quarter update showed net sales from new homes of 43, down from 60 in the December quarter.
Established home net sales also eased to 38 from 56 in the prior quarter.
Even so, the year-on-year comparison still improved, with new home net sales up from 25 in the prior corresponding period and established sales rising from 24.
Management said broader economic uncertainty is weighing on consumer confidence, with prospective customers taking longer to make decisions while managing the sale of their existing homes.
The attended appointment conversion rate also fell to 22% from 29% in the December quarter, showing buyers are still moving cautiously through the sales process.
Debt and inventory continue to improve
While sales softened from the prior quarter, the balance sheet continued to improve.
Net debt was reduced again to $296.4 million as at 31 March, down from $323.6 million at 31 December and well below $460.5 million at the June 2025 year end.
Inventory also kept trending lower.
The company ended March with 148 unsold completed homes, down from 257 a year earlier, alongside 10 unsold homes currently under construction.
The reduction in completed inventory has remained a key focus for investors since sentiment around the group weakened last year.
Management also reported improved homeowner satisfaction scores and continued uptake of upfront management fee payments, which is supporting cash flow.
Settlement timing is still the main watchpoint
Debt and inventory are improving, but settlement timing remains the main focus.
The company has 203 contracts on hand, but only 74 are expected to settle in FY26, with the remainder weighted into FY27 and beyond.
That timing gap means the improvement in the balance sheet may take longer to show up in earnings.
Foolish takeaway
This quarter’s sales numbers were softer than investors would have hoped.
Debt continues to fall, inventory is moving lower, and the contract pipeline remains solid. The key question now is whether better Victorian housing conditions help more contracts settle through FY27.
The post Why this beaten-down ASX stock still can’t catch a break appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.