KB Home (KBH) Q1 2026 earnings summary

Executive summary

• First quarter 2026 revenues were $1.08 billion, down 23% year-over-year, with 2,370 home deliveries and an average selling price of $452,100, both declining from the prior year.

• Net income was $33.4 million, or $0.52 per diluted share, benefiting from a 13% reduction in weighted average diluted shares outstanding.

• Net orders increased 3% to 2,846 homes, while backlog homes and value declined 19% and 23%, respectively.

• Strategic shift back to a Built to Order (BTO) model, with BTO orders rising from 44% in October to over 70% in early March, expected to drive higher margins and predictability.

• Leadership transition completed, with Rob McGibney assuming CEO role and Jeff Mezger becoming Executive Chairman.

Financial highlights

• Housing gross profit margin was 15.3% (15.5% adjusted), down from 20.2% (20.3% adjusted) year-over-year.

• Homebuilding operating income margin dropped to 3.1% from 9.2% year-over-year.

• SG&A expense ratio increased to 12.2% from 11.0% year-over-year, aided by an $8 million insurance recovery.

• Pretax income was $40.3 million, including $5.5 million from financial services.

• Total liquidity stood at $1.2 billion, with $200.5 million in cash and nearly $1.0 billion in revolver capacity.

Outlook and guidance

• Q2 2026 housing revenues expected between $1.05 billion and $1.15 billion, with deliveries of 2,250–2,450 homes.

• Q2 housing gross profit margin expected between 15%–15.6%; SG&A ratio projected at 12.4%–13%; effective tax rate for Q2 expected at 19%.

• Full-year 2026 housing revenues guided to $4.8–$5.5 billion on 10,000–11,500 deliveries; effective tax rate of 23–25%.

• Margins expected to improve in the second half of 2026 due to higher BTO mix and favorable regional mix, especially from Northern California.

• Q2 common stock repurchases expected in the range of $50–$100 million.