Overview
- KB Home, which reported results Tuesday, posted EPS of $0.52 and $1.08 billion in revenue as housing gross margin fell to 15.3% from 20.2% a year ago with deliveries down 14% to 2,370 and the average selling price at $452,100.
- The company lowered guidance, now projecting Q2 deliveries of 2,250 to 2,450 homes and full-year 2026 deliveries of 10,000 to 11,500 with housing revenue of $4.8 billion to $5.5 billion.
- Leaders said the sales mix has moved to roughly 70% build-to-order by early March and they are reducing speculative starts to rebuild backlog, which they expect will cause a first-half trough in deliveries.
- Executives reported softer March demand after the Iran-related conflict began and flagged the risk that higher oil prices could raise land development and materials costs, especially in high-gas-price states like California and Washington.
- Analysts cut forecasts and the shares slipped about 1.6% Wednesday, with Wolfe Research noting that planned cuts to closings are the key driver while the BTO strategy targets better margins later in the year.