Q2 Financial Results
KB Home (NYSE:KBH) posted second‑quarter 2026 adjusted earnings per share of $0.43, which fell short of the analyst consensus of $0.45. Revenue reached $1.11 billion, surpassing the $1.09 billion estimate but representing a 27 % decline year‑over‑year from $1.53 billion in the comparable quarter of the prior year.
The homebuilder delivered 2,395 homes during the quarter, a 23 % drop from the same period last year, at an average selling price of $461,900 compared with $488,700 a year earlier.
Business Model Momentum
Executive Chairman Jeffrey Mezger said the company’s shift toward a predominantly Built‑to‑Order (BTO) model continued to gain momentum, with BTO homes comprising 73 % of net orders in the quarter.
Net orders totaled 3,317, down 4 % YoY, while the average community count rose 9 % to 278. The cancellation rate improved to 12 % from 16 % in the prior‑year quarter.
Profitability and Expenses
Housing gross profit margin compressed to 15.2 % from 19.3 % YoY; excluding inventory‑related charges of $5.6 million, the margin was 15.7 % versus 19.7 % in the prior year. Selling, general and administrative expenses increased to 12.7 % of housing revenues from 10.7 % in the prior period, primarily due to reduced operating leverage.
Guidance
For the third quarter, KB Home projects revenue between $1.20 billion and $1.35 billion, with a midpoint of $1.275 billion, which is below the analyst consensus of $1.345 billion. Full‑year fiscal 2026 revenue guidance is $4.90 billion to $5.30 billion, with a midpoint of $5.10 billion, also trailing the consensus estimate of $5.049 billion.
Share Repurchase
During the quarter, the company repurchased 1.4 million shares for $75.0 million. Cumulatively, first‑half repurchases total 2.2 million shares at a cost of $125.0 million.
Market Reaction
Following the announcement, KB Home shares rose 4 % in after‑hours trading.