KB Home (KBH) Q2 2026 Financial Results Summary
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KB Home (KBH) Q2 2026: Revenue Decline and Earnings Drop — Disappointing Quarter for Shareholders
KB Home (NYSE: KBH) reported its second-quarter results for the fiscal year 2026, revealing a significant decline in both revenue and earnings compared to the previous year. Specifically, revenues fell by $417 million, or 27%, to $1.11 billion, while diluted earnings per share (EPS) dropped by $1.07, or 71%, to $0.43.
This quarter's performance is disappointing for shareholders, primarily due to the substantial declines in key financial metrics. The decrease in revenue and earnings reflects ongoing challenges in the housing market, including reduced demand and increased costs.
Key Financial Metrics
- Revenues: $1.11 billion, down from $1.53 billion in Q2 2025 (a decrease of 27%).
- Homes Delivered: 2,395, down from 3,120 (a decrease of 23%).
- Average Selling Price: $461,900, compared to $488,700 (a decrease of 5.5%).
- Homebuilding Operating Income: $28.2 million, down from $131.5 million (a decrease of 78.6%).
- Net Income: $27.3 million, compared to $107.9 million (a decrease of 74.7%).
- Diluted EPS: $0.43, down from $1.50 (a decrease of 71.3%).
- Housing Gross Profit Margin: 15.2%, down from 19.3%.
Operational Insights
The decline in revenue and earnings can be attributed to several factors:
- Lower Demand: The number of homes delivered decreased significantly, reflecting a challenging market environment.
- Increased Costs: The housing gross profit margin fell to 15.2%, primarily due to price reductions, higher land costs, and reduced operating leverage.
- Higher SG&A Expenses: Selling, general, and administrative expenses increased to 12.7% of housing revenues, up from 10.7%, indicating decreased operational efficiency.
Despite these challenges, KB Home did manage to repurchase $75.0 million of common stock during the quarter, which may provide some support for shareholder value in the long term.
Guidance and Future Outlook
Looking ahead, KB Home provided guidance for the third quarter of 2026, projecting:
- Deliveries: Between 2,600 to 2,800 homes.
- Housing Revenues: Between $1.20 billion to $1.35 billion.
- Housing Gross Profit Margin: Between 16.0% to 16.6%, assuming no inventory-related charges.
For the full year, the company anticipates:
- Deliveries: Between 10,500 to 11,000 homes.
- Housing Revenues: Between $4.90 billion to $5.30 billion.
Investors should closely monitor these projections, particularly the anticipated increase in deliveries and revenues, as they may indicate a potential recovery in the latter half of the fiscal year.
Conclusion
In summary, KB Home's Q2 2026 results reflect a challenging environment for the homebuilding industry, with significant declines in revenue and earnings. While the company is taking steps to manage costs and return capital to shareholders through stock repurchases, the overall performance this quarter is disappointing. Investors should watch for improvements in delivery volumes and gross margins in the upcoming quarters as indicators of recovery.
Note: The following tables present amounts in thousands.
| KB HOME CONSOLIDATED STATEMENTS OF OPERATIONS | For the Three Months and Six Months Ended May 31, 2026 and 2025 | (In Thousands, Except Per Share Amounts – Unaudited) | |||
|---|---|---|---|---|---|
| Total revenue | 2026 | $1,112,... | 2025 | $1,529,... | |
| Homebuilding Revenue | 2026 | $1,107,... | 2025 | $1,524,... | |
| Costs and expenses | 2026 | -1,078... | 2025 | -1,393... | |
| Operating income | 2026 | 28,151 | 2025 | 131,463 | |
| Interest income | 2026 | 1,164 | 2025 | 1,679 | |
| Equity in income of unconsolidated joint ventures | 2026 | 1,269 | 2025 | 1,080 | |
| Homebuilding pretax income | 2026 | 30,584 | 2025 | 134,222 | |
| Financial services Revenue | 2026 | 5,328 | 2025 | 4,869 | |
| Expenses | 2026 | -1,493 | 2025 | -1,570 | |
| Equity in income of unconsolidated joint ventures | 2026 | 2,830 | 2025 | 4,862 | |
| Financial services pretax income | 2026 | 6,665 | 2025 | 8,161 | |
| Total pretax income | 2026 | 37,249 | 2025 | 142,383 | |
| Income tax expense | 2026 | -9,900 | 2025 | -34,500 | |
| Net income | 2026 | $27,349 | 2025 | $107,883 | |
| Earnings per share: | Basic | 2026 | $0.44 | 2025 | $1.53 |
| Diluted | 2026 | $0.43 | 2025 | $1.50 | |
| Weighted-average shares used to compute net income per share, basic | 2026 | 61,789 | 2025 | 69,976 | |
| 2026 | 62,733 | 2025 | 71,226 |
| KB HOME CONSOLIDATED BALANCE SHEETS | (In Thousands – Unaudited) | |||||
|---|---|---|---|---|---|---|
| Assets | Homebuilding: | Cash and cash equivalents | May 31, 2026 | $199,819 | November 30, 2025 | $228,614 |
| Receivables | May 31, 2026 | $389,728 | November 30, 2025 | $350,636 | ||
| Inventories | May 31, 2026 | $5,732,557 | November 30, 2025 | $5,670,802 | ||
| Investments in unconsolidated joint ventures | May 31, 2026 | $78,766 | November 30, 2025 | $72,436 | ||
| Property and equipment, net | May 31, 2026 | $103,840 | November 30, 2025 | $101,457 | ||
| Deferred tax assets, net | May 31, 2026 | $88,665 | November 30, 2025 | $88,665 | ||
| Other assets | May 31, 2026 | $124,755 | November 30, 2025 | $107,833 | ||
| May 31, 2026 | $6,718,130 | November 30, 2025 | $6,620,443 | |||
| Financial services | May 31, 2026 | $57,332 | November 30, 2025 | $59,809 | ||
| Total assets | May 31, 2026 | $6,775,462 | November 30, 2025 | $6,680,252 | ||
| Liabilities and stockholders’ equity | Homebuilding: | Accounts payable | May 31, 2026 | $303,850 | November 30, 2025 | $351,261 |
| Accrued expenses and other liabilities | May 31, 2026 | $704,401 | November 30, 2025 | $731,946 | ||
| Notes payable | May 31, 2026 | $1,968,714 | November 30, 2025 | $1,692,977 | ||
| May 31, 2026 | $2,976,965 | November 30, 2025 | $2,776,184 | |||
| Financial services | May 31, 2026 | $1,687 | November 30, 2025 | $3,210 | ||
| Stockholders’ equity | May 31, 2026 | $3,796,810 | November 30, 2025 | $3,900,858 | ||
| Total liabilities and stockholders’ equity | May 31, 2026 | $6,775,462 | November 30, 2025 | $6,680,252 |
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