The magnitude of the revenue and EPS miss relative to consensus is extreme for a homebuilder of this scale — expect significant downside at the open. The Q3 guidance midpoint of $1.275B in housing revenue implies a further ~16% YoY decline, offering no near-term catalyst. Monitor community count trajectory (guidance 270-280 for Q3 end vs 276 end of Q2) and whether gross margin can stabilize toward the guided 16.0%-16.6% range. The elevated debt-to-capital (34.1%) and draw on the revolver ($275M outstanding) are incremental credit concerns. Short-term negative momentum is likely to persist through the Q3 report.
Price Chart
Executive Summary
KB Home reported Q2 FY2026 results that sharply missed consensus estimates, with EPS of $0.43 vs. $0.90 estimate (-52% miss) and revenue of $1.11B vs. $1.35B estimate, driven by a 27% YoY revenue decline, a 23% drop in deliveries, and housing gross margin compression to 15.2% from 19.3%. Guidance for Q3 housing revenue ($1.20B-$1.35B) is below the prior-year quarter ($1.52B), and full-year revenue guidance was narrowed to $4.90B-$5.30B, down meaningfully from the prior year's $5.83B run-rate, signaling prolonged weakness in homebuilding fundamentals.
Key Financial Metrics
Key Facts
- Diluted EPS of $0.43 missed consensus of $0.90 by 52.0%
- Revenue of $1.11B fell 27% YoY and missed the $1.35B consensus
- Homes delivered declined 23% YoY to 2,395
- Housing gross profit margin contracted to 15.2% from 19.3% YoY
- Homebuilding operating income fell 79% to $28.2M; margin was 2.5% vs 8.6%
- Net orders declined 4% YoY to 3,317; backlog fell 5% in homes and 7% in value
- Debt-to-capital ratio rose to 34.1% from 30.3%, with notes payable up 16%
- Q3 guidance: deliveries 2,600-2,800 vs prior-year Q3 of 3,120; housing revenue $1.20B-$1.35B vs $1.52B
- Full-year 2026 revenue guidance narrowed to $4.90B-$5.30B, down from $5.83B in FY2025
- Repurchased $75M in stock during Q2, totaling $125M H1; $775M authorization remaining
Financial Impact
Revenue declined $417M (-27%) YoY to $1.11B; net income fell $80.5M (-75%) to $27.3M. Housing gross profit margin compressed 410 bps to 15.2%.
Risk Factors
- Further revenue and delivery declines as high mortgage rates suppress demand
- Additional gross margin compression from price reductions and elevated land costs
- Rising leverage could lead to a credit rating review if housing market weakens further
- Cancellation rates (12%) could increase if buyer sentiment deteriorates
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000795266-26-000060 |
| Document: kbh-20260623.htm | 0000795266-26-000060 |
| Document: 0000795266-26-000060-index-headers.html | 0000795266-26-000060 |
| Document: 0000795266-26-000060-index.html | 0000795266-26-000060 |
| Document: 0000795266-26-000060.txt | 0000795266-26-000060 |
| 8-K Data (Synthetic) | 0000795266-26-000060 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 28, 2026 5w ago | Press Release | $54.86 $47.88 | ▼ −12.72% | ▼ −12.98% | $45.76 (−16.59%) |
Aug 7, 2026 7w ago | Insider Cluster | $56.52 $50.20 | ▼ −11.18% | ▼ −10.27% | $45.76 (−19.04%) |
Jul 15, 2026 11w ago | Insider Cluster | $56.42 $55.80 | ▼ −1.10% | ▼ −3.44% | $45.76 (−18.89%) |
Jun 23, 2026 14w ago | 8-K | $61.51 $56.47 | ▲ +8.19% | ▲ +10.13% | $45.76 (+25.61%) |
May 1, 2026 21w ago | 8-K | $47.85 $51.11 | ▼ −6.82% | ▼ −1.17% | $45.76 (+4.36%) |
Mar 13, 2026 28w ago | DEFA14A | $54.03 $51.93 | ▼ −3.88% | ▼ −7.66% | $45.76 (−15.30%) |
US Market Status
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