KB Home (KBH) Q2 2026 earnings summary

Executive summary

• Revenues for Q2 2026 were $1.11 billion, a 27% decrease year-over-year, with net income of $27.3 million and diluted EPS of $0.43, reflecting persistent affordability pressures, elevated mortgage rates, and cautious buyer sentiment.

• Built to Order homes represented 73% of net orders and 60% of deliveries, supporting backlog visibility, margin predictability, and operational efficiency.

• Community count increased 11% year-over-year to 280, with 35 new openings and reduced build times.

• Backlog declined 5% year-over-year to 4,526 homes, but grew 26% sequentially, supporting higher deliveries in the second half of 2026.

• Over $90 million was returned to shareholders in Q2 through dividends and share repurchases, with $775 million remaining under current authorization.

Financial highlights

• Q2 housing revenues were $1.11 billion, down 27% year-over-year, with 2,395 homes delivered (down 23%) and average selling price of $461,900 (down 5%).

• Net income was $27.3 million and diluted EPS was $0.43, compared to $107.9 million and $1.50 last year.

• Homebuilding operating income margin was 2.5% (3.0% adjusted), down from 8.6% (9.0% adjusted) year-over-year.

• Housing gross profit margin was 15.2% (15.7% adjusted), down from 19.3% (19.7% adjusted) a year ago.

• SG&A expenses rose to 12.7% of housing revenues from 10.7% year-over-year.

Outlook and guidance

• Q3 2026 guidance: 2,600–2,800 deliveries, $1.20–$1.35 billion in housing revenues, gross margin 16.0–16.6%, SG&A 11.3–11.9%, tax rate 19–21%.

• Full-year 2026 guidance: 10,500–11,000 deliveries, $4.90–$5.30 billion in revenues, gross margin 16.1–16.5%, SG&A 11.4–11.8%, tax rate 22–24%.

• Sequential improvement in deliveries and margins expected in the second half, but both to remain below prior-year levels.

• Community count growth and Built to Order focus expected to support future margin improvement.