KB Home (KBH) Q1 2026 earnings summary

Executive summary

• Revenues for Q1 2026 were $1.08 billion, down 23% year-over-year, with net income of $33.4 million and diluted EPS of $0.52, reflecting lower home deliveries and prices.

• Net orders increased 3% to 2,846, while backlog value declined 23% to $1.70 billion; backlog homes also fell 19%.

• Strategic shift to Built to Order homes, with BTO orders rising from 44% to over 70%, expected to drive higher margins and predictability in the second half of 2026.

• Leadership transition completed, with Rob McGibney as CEO and Jeff Mezger as Executive Chairman.

• Book value per share rose 8% to $61.53, and stockholders' equity reached $3.86 billion.

Financial highlights

• Homebuilding revenues were $1.07 billion, down 23% year-over-year, with 2,370 homes delivered and average selling price down 10% to $452,100.

• Housing gross profit margin was 15.3% (15.5% adjusted), down from 20.2% (20.3% adjusted) year-over-year.

• SG&A expenses were 12.2% of housing revenues, up from 11.0% year-over-year, but total SG&A expense decreased 14% aided by insurance recovery.

• Financial services pretax income was $5.5 million, down 26% year-over-year, mainly due to lower mortgage JV income.

• Total liquidity was $1.2 billion at quarter end, including $200.5 million in cash and nearly $1 billion in revolver capacity.

Outlook and guidance

• Q2 2026 guidance: deliveries of 2,250–2,450 homes, housing revenues of $1.05–$1.15 billion, gross margin of 15.0–15.6%, SG&A at 12.4–13.0%, and effective tax rate of ~19%.

• Full-year 2026 guidance: deliveries of 10,000–11,500 homes, housing revenues of $4.8–$5.5 billion, and effective tax rate of 23–25%.

• Margins expected to improve in the second half of 2026 due to higher BTO mix and favorable regional mix, especially from Northern California.

• Q2 share repurchases planned at $50–$100 million; $850 million remains under authorization.

• Community count expected to peak in Q2, with management anticipating improved results in the second half.