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Earnings · Guidance · Homebuilding · Housing Market
KB Home (KBH) revised its fiscal 2025 guidance downwards after reporting Q1 FY2025 revenue of $1.39 billion, a 5% year-over-year decrease from $1.46 billion, and diluted EPS of $1.49, down from $1.76 in Q1 FY2024, primarily due to a softer selling environment and delivery disruptions.
The company delivered 2,770 homes, a 9% reduction, partially offset by a 4% increase in average selling price to $500,700. Net orders decreased, with monthly absorption pace falling to 3.6 homes per community from 4.6.
Housing gross profit margin declined to 20.2% from 21.5%, impacted by higher land costs and homebuyer concessions. CEO Jeff Mezger noted consumer affordability concerns and macroeconomic uncertainties.
KB Home proactively adjusted pricing in mid-February, reducing base prices by an average of $15,000-$16,000 in affected communities, which improved order rates. The company invested $920 million in land and returned nearly $70 million to shareholders.
Full-year revenue guidance is now $6.6 billion to $7.0 billion, and housing gross profit margin is projected at 19.2% to 20.0%.
KB Home Cuts Guidance on Softer Market, Delivery Delays(current)
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