KB Home Stock Falls 5% on First Quarter Earnings Miss

Los Angeles - KB Home (NYSE: KBH) reported first-quarter results that missed Wall Street expectations, with earnings of $0.52 per share, below analysts’ estimate of $0.55. Revenue was $1.08 billion, down 23% year-over-year, slightly below the market consensus of $1.09 billion. The stock fell 5% after the earnings release.

The homebuilder’s gross margin (excluding inventory-related costs) compressed to 15.5%, down from 20.3% in the same period last year, mainly due to price reductions, rising land costs, and lower operating leverage.

Operating profit margin for the homebuilding segment declined from 9.2% last year to 3.1%. The company delivered 2,370 homes at an average price of $452,100, down from $500,700 in the same period last year.

The company repurchased $50 million of common stock during the quarter.

For the second quarter, KB Home expects homebuilding revenue between $1.05 billion and $1.15 billion, with a midpoint of $1.1 billion. The company anticipates deliveries of 2,250 to 2,450 homes, with gross margins between 15.0% and 15.6%. For the full year, the company expects to deliver 10,000 to 11,500 homes, with homebuilding revenue between $4.8 billion and $5.5 billion.

Chairman Jeffrey Mezger stated, “We are refocusing on our core custom homebuilding strategy, combined with a favorable regional mix of homes to be delivered and higher delivery volumes driving operating leverage, which we expect will lead to stronger financial performance in the second half of fiscal 2026.”

Net orders increased 3% year-over-year to 2,846 homes, while the average community count grew 7% to 274. The company’s total liquidity at the end of the quarter was approximately $1.2 billion.

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