Lennar (LEN) Q2 2024 earnings summary

Executive summary

• Net earnings rose 9% to $954.3M ($3.45/share) in Q2 2024, with adjusted net earnings at $935.3M ($3.38/share); new orders grew 19% to 21,293 homes and deliveries increased 15% to 19,690 homes year-over-year.

• Revenues increased 9% year-over-year to $8.8B, driven by higher home deliveries despite a 5% decrease in average sales price to $426,000.

• Maintained strong liquidity with $3.6B in cash, a 7.7% debt-to-capital ratio, and no borrowings on the $2.2B revolver.

• Advanced land-light, asset-light strategy, including a proposed $6–$8B land spinoff to a new public entity with no debt.

• Continued capital returns with $603M in share repurchases and $139M in dividends this quarter.

Financial highlights

• Q2 2024 revenues were $8.8B, up from $8.0B; home deliveries reached 19,690, with an average sales price of $426,000.

• Gross margin on home sales was 22.6%, up from 21.8% last quarter and 22.5% a year ago; targeting 23% for Q3.

• Financial Services segment posted $146M in Q2 operating earnings, up from $113M year-over-year.

• Inventory turn improved to 1.6x from 1.3x YoY; return on inventory rose to 31.4%, up 110 basis points.

• Ended the quarter with $3.6B in cash and $5.8B in total liquidity.

Outlook and guidance

• Q3 2024 guidance: 20,500–21,000 deliveries, average sales price $420,000–$425,000, gross margin ~23%, SG&A 7.3%–7.5%.

• Q3 EPS expected at $3.50–$3.65 per share; Financial Services operating earnings forecasted at $135–$140M.

• Full-year 2024: targeting 80,000 home deliveries (10% growth YoY), gross margin just over 23%, and at least $2.5B in capital allocation.

• Over $2B in stock repurchases planned for 2024.