Gross Margin % is calculated as gross profit divided by its revenue. KB Home's Gross Profit for the
three
months ended in Feb. 2024 was $320 Mil. KB Home's Revenue for the
three
months ended in Feb. 2024 was $1,468 Mil. Therefore, KB Home's Gross Margin % for the quarter that ended in Feb. 2024 was 21.78%.
The historical rank and industry rank for KB Home's Gross Margin % or its related term are showing as below:
KBH'
s Gross Margin % Range Over the Past 10 Years
Min: 15.29 Med: 18.01 Max: 24.4
Current: 21.47
During the past 13 years, the highestGross Margin % of KB Home was 24.40%. The lowest was 15.29%. And the median was 18.01%.
KBH's Gross Margin % is ranked worse than 52.43% of 103
companies
in the Homebuilding & Construction industry
Industry Median: 21.72
vs KBH: 21.47
KB Home had a gross margin of 21.78% for the quarter that ended in Feb. 2024 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for KB Home was 5.80% per year.
KB Home Gross Margin % Historical Data
The historical data trend for KB Home's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of KB Home's Gross Margin %
For the Residential Construction subindustry, KB Home's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
KB Home's Gross Margin % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, KB Home's Gross Margin % distribution charts can be found below:
* The bar in red indicates where KB Home's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
KB Home (NYSE:KBH) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
KB Home had a gross margin of 21.78% for the quarter that ended in Feb. 2024 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
KB Home Gross Margin % Related Terms
Thank you for viewing the detailed overview of KB Home's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
KB Home is an American construction company that focuses on residential construction. The company builds single-family homes and communities across Arizona, California, Colorado, Florida, Nevada, Texas, North Carolina, Idaho and the Washington, D.C., area. KB Home operates in several markets and focuses on first-time and move-up homebuyers. The company follows a built-to-order model that offers personalized homes at attainable prices based on the market location. The company also invests in land acquisition and development to support future building activities and is also engaged in financial services operations which includes providing mortgage banking services through its joint venture with a third party.
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