Q2 2026 KB Home Earnings Call Transcript
Key Points
- KB Home (KBH) reported second-quarter results that met or exceeded the midpoint of their key guidance ranges, reflecting sequential improvement in their adjusted housing gross profit margin.
- The company achieved double-digit year-over-year community count growth and reduced build times, enhancing operational efficiency.
- KB Home (KBH) returned over $90 million in capital to shareholders in the second quarter, including share repurchases and dividends.
- The built-to-order (BTO) model is providing visibility and predictability, with 73% of net orders in the second quarter being BTO homes, which supports margin quality over time.
- The company has a favorable lot position, owning or controlling over 59,000 lots, which supports their growth strategy and long-term economic and demographic growth.
- Total revenues for the second quarter were $1.1 billion, a decline of 27% compared to the prior period, reflecting a 23% decrease in the number of homes delivered.
- The housing gross profit margin decreased year-over-year, primarily due to pricing pressures, higher relative land costs, and reduced operating leverage.
- Consumer confidence remains low, driven by elevated mortgage interest rates, affordability pressures, and geopolitical uncertainties, impacting sales conversion rates.
- The company experienced a softer than expected spring selling season, attributed to weakening consumer confidence and rising mortgage interest rates.
- The average selling price of homes declined by 5% year-over-year, primarily driven by general market conditions.
Good afternoon. My name is John, and I will be your conference operator today. I would like to welcome everyone to the KB Home 2026 second quarter earnings conference call. (Operator Instructions)
This conference call is being recorded, and a replay will be accessible on the KB Home website until July 23, 2026.
I will now turn the call over to Jill Peters, Senior Vice President, Investor Relations. Thank you, Jill. You may begin.
Thank you, John. Good afternoon, everyone, and thank you for joining us today to review our results for the second quarter of fiscal 2026.
On the call are Jeff Mezger, Executive Chairman; Rob McGibney, President and Chief Executive Officer; Bill Hollinger, Senior Vice President and Chief Accounting Officer, and Thad Johnson, Senior Vice President and Treasurer. During this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
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