KB Home cuts full-year outlook as sales, deliveries decline YoY

Investing.com -- KB Home (NYSE:KBH) reported second-quarter earnings that beat analyst estimates, but the homebuilder’s stock slipped slightly in premarket trading Tuesday as the company cut its full-year outlook.

The company reported earnings per share of $1.50 for the quarter ended May 31, 2025, surpassing the analyst consensus of $1.46. Revenue came in at $1.53 billion, meeting expectations but down 10.5% YoY from $1.71 billion.

KB Home delivered 3,120 homes in the quarter, an 11% decrease from the same period last year. The average selling price increased slightly to $488,700.

"Our second quarter financial performance was solid, with results meeting or exceeding our guidance ranges, as we continue to navigate the current environment," said Jeffrey Mezger, Chairman and Chief Executive Officer.

For the full fiscal year 2025, KB Home forecasts revenue between $6.3 billion and $6.5 billion, down from its prior guidance of $6.6 billion to $7 billion from March.

Analysts surveyed by FactSet anticipate $6.55 billion in home-building revenue for the year.

The company also trimmed the upper end of its expected average selling price, now forecasting $480,000 to $490,000, down from its previous range of $480,000 to $495,000.

The latest revision reflects continued buyer hesitancy amid elevated mortgage rates and home prices.

“Consumers are continuing to demonstrate a lack of confidence about the short-term, which has impacted their home purchase decisions,” Mezger said on a call with analysts, citing ongoing affordability pressures along with broader economic and geopolitical concerns.

Evercore ISI analysts said "expectations heading into the quarter were already quite cautious, as market conditions had clearly deteriorated after the company offered guidance in late March."

"As a result, we do not regard the company’s FY25 guidance as worrisome – although investors will likely be somewhat skeptical about the projected improvement in 4Q," they added. 

The company’s net orders decreased 13% YoY to 3,460, while the cancellation rate rose to 16% from 13% a year ago, indicating softer demand.

KB Home repurchased $200 million of its common stock during the quarter at an average price of approximately $54 per share. The company expects to continue share repurchases for the remainder of fiscal 2025.

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