Companies /Consumer Cyclical

KB Home

NYSE: KBH Residential Construction
$53.30
▼ $1.56 (−2.84%) today
Markets closed · 9:47pm ET

Q1 2025 Earnings

Reported Mar 24, 2025, 4:19pm ET · SEC source
$1.49
Miss −6.14%
EPS · est. $1.59
$1.4B
Miss −7.16%
Revenue · est. $1.5B
−4.0%
Trailing market
KBH vs S&P since report
2 quarters
Consecutive EPS misses

Market Reaction

% change · around the report
0+4%+8%Mar 24Mar 25report 4:19pm ETearnings+0.2%+4.9%
0+4%+8%Mar 24Mar 25earnings+0.2%+4.9%
KBH +4.9%S&P 500 +0.2%
0+4%+8%Mar 24Mar 25report 4:19pm ETearnings+0.7%+4.9%
0+4%+8%Mar 24Mar 25earnings+0.7%+4.9%
KBH +4.9%NASDAQ +0.7%
−4%0+4%+8%Mar 24Apr 1report 4:19pm ETearnings−2.3%+3.5%
−4%0+4%+8%Mar 24Apr 1earnings−2.3%+3.5%
KBH +3.5%S&P 500 −2.3%
−5%0+5%+10%Mar 24Apr 1report 4:19pm ETearnings−3.6%+3.5%
−5%0+5%+10%Mar 24Apr 1earnings−3.6%+3.5%
KBH +3.5%NASDAQ −3.6%
−5.21%
Day of report
+0.92%
Next session
−0.34%
One week
−8.31%
30 days

S&P 500 over the same 30 days: −4.31%.

Did KBH Beat Earnings? Q1 2025 Results

KB Home stumbled out of the gate in fiscal Q1 2025, missing on both the top and bottom lines as softening demand and affordability headwinds weighed on results. The homebuilder posted diluted EPS of $1.49, falling short of the $1.59 consensus estimate by 6.14%, while revenue of $1.39 billion trailed expectations by 7.16% and declined 5% year over year. The most telling signal came from net orders, which dropped 17% to 2,772 units as monthly net orders per community fell to 3.6 from 4.6 a year ago, reflecting what CEO Jeffrey Mezger described as demand that was "more muted than what we have seen historically." Housing gross profit margin also contracted to 20.2% from 21.5%, hurt by higher land costs and increased homebuyer concessions. In response, KB Home trimmed its full-year fiscal 2025 revenue outlook to a range of $6.60 billion to $7.00 billion, sending shares down sharply in after-hours trading as investors weighed the implications of a slower spring selling season.

Key Takeaways
  • Average selling price rose 4% to $500,700 year over year
  • Community count expanded 7% to 255 ending communities
  • Lot portfolio grew 41% year over year to 78,233 lots
  • Housing gross profit margin compressed to 20.2% from 21.5% due to higher relative land costs and homebuyer concessions
  • Homes delivered decreased 9% to 2,770
  • Net orders decreased 17% to 2,772

“Consumers are working through affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing them to move slowly in their homebuying decisions. Demand at the start of this Spring's selling season was more muted than what we have seen historically, despite a healthy level of traffic in our communities. In mid-February, we took steps to reposition our communities to offer the most compelling value, and buyers responded favorably to these adjustments. Although we missed our sales goals for the first quarter, we are encouraged by the significant improvement in weekly sales and normalizing absorption pace over the last five weeks.”

KB Home CEO, on the earnings call

Forward Guidance & Outlook

KB Home reduced its full-year fiscal 2025 guidance primarily to reflect lower first quarter net orders. Updated guidance includes: housing revenues of $6.60 billion to $7.00 billion; average selling price of $480,000 to $495,000; homebuilding operating income margin of approximately 9.4% (assuming no inventory-related charges); housing gross profit margin of 19.2% to 20.0% (assuming no inventory-related charges); SG&A as a percentage of housing revenues of 10.0% to 10.4%; effective tax rate of approximately 24%; and ending community count of approximately 250. The company plans to provide second quarter guidance on its conference call.

KBH YoY Financials

Revenue$1.4B
Gross Profit$279.6M
Operating Income$127.3M
Net Income$109.6M

KBH Revenue by Segment

Homebuilding$196.9M
Financial Services$4.7M

Figures from SEC filings and company reports. Not investment advice.