D.R. Horton (DHI, Financial) is set to report earnings before the bell on Tuesday, July 22. Street consensus forecasts EPS of $2.89 on revenue of $8.8 billion, implying a 30% YoY drop in the bottom line due to a still-challenging interest rate environment. Shares are down 7% year to date, reflecting investor caution on affordability and a higher-for-longer Fed stance.
Investors will focus heavily on order activity and pricing trends. Net sales orders and backlog updates will offer insight into demand durability as mortgage rates remain elevated. In Q2, net sales orders dropped 15 % YoY to 22,437 homes, while closings were similarly down about 15 % to 19,276. The key question is whether that momentum can continue through Q3. Gross margin performance is another key metric, especially as input cost deflation slows. Any signs of discounting or rising incentives could weigh on sentiment.
Management's commentary on regional demand patterns, cancellation rates, and land acquisition strategy will be critical. With the Fed expected to cut rates just twice in 25bp increments, and 30-year mortgage rates hovering just below 7%, the update from the nation's largest homebuilder will shape broader expectations for the housing sector.
