KB Home (KBH) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues were $1.11 billion, down 27% year-over-year, with 2,395 home deliveries, net income of $27.3 million, and diluted EPS of $0.43; operational execution included double-digit community count growth and reduced build times.

• Strategic shift to Built to Order homes drove 73% of net orders and 60% of deliveries, enhancing backlog visibility, margin predictability, and operational efficiency.

• Community count increased 11% year-over-year to 280, with 35 new openings and average build times for BTO homes reduced to 100 days, the lowest in over a decade.

• Market conditions remained challenging due to elevated mortgage rates, affordability pressures, and low consumer confidence, but sales rebounded in April and remained resilient in May.

• Over $90 million returned to shareholders in Q2 through dividends and share repurchases, with $75 million spent on 1.4 million shares repurchased.

Financial highlights

• Q2 housing revenues were $1.11 billion, with a 23% decrease in deliveries and a 5% decline in average selling price to $461,900.

• Net income was $27.3 million and diluted EPS was $0.43, down from $107.9 million and $1.50 last year.

• Homebuilding operating income margin was 2.5% (3.0% adjusted), down from 8.6% (9.0% adjusted) year-over-year.

• Housing gross profit margin was 15.2% (15.7% adjusted), compared to 19.3% (19.7% adjusted) last year.

• SG&A expenses rose to 12.7% of housing revenues, up from 10.7% last year.

Outlook and guidance

• Q3 2026 guidance: 2,600–2,800 deliveries, $1.20–$1.35 billion in housing revenues, gross margin 16.0–16.6%, SG&A 11.3–11.9%, tax rate 19–21%.

• Full-year 2026 guidance: 10,500–11,000 deliveries, $4.90–$5.30 billion in revenues, gross margin 16.1–16.5%, SG&A 11.4–11.8%, tax rate 22–24%.

• Backlog grew 26% sequentially to 4,526 homes, with expectations for continued sequential and year-over-year growth supporting higher deliveries in the second half of 2026.

• BTO deliveries expected to reach around 70% by Q4, up from 60% in Q2.

• Community count peaked at 280 in Q2, with a step down expected in the second half depending on sellout pace.