KB Home Q2 Revenue Drops 27% to $1.11B, EPS Matches Estimates

KBH•2026-06-23

KB Home posted fiscal Q2 net income of $27.3 million, or $0.43 per share, matching consensus estimates. Revenue fell 27% year-over-year to $1.11 billion (vs. $1.09 billion forecast), gross margin compressed to 15.2% and operating margin to 3% as the builder shifts to build-to-order during weak demand.

1. Q2 Net Income and EPS

KB Home reported net income of $27.3 million, or $0.43 per share, for fiscal Q2, matching consensus estimates and in line with analyst forecasts.

2. Revenue and Margin Compression

Revenue declined 27% year-over-year to $1.11 billion, surpassing the $1.09 billion forecast, while gross margin narrowed to 15.2% and operating margin compressed to 3%.

3. Build-to-Order Transition

The company is shifting to a build-to-order model to reduce inventory risk, though this strategy limits near-term revenue growth as order intake and backlog levels retreat.

4. Market Conditions and Outlook

Persistent high mortgage rates and weak homebuyer demand continue to pressure new home sales, indicating potential headwinds for recovery in upcoming quarters.