KB Home KBH is slated to report its second-quarter fiscal 2026 (ended May 31) results on June 23, after market close.
In the last reported quarter, its adjusted earnings per share (EPS) met the Zacks Consensus Estimate and decreased 65% year over year. Total revenues missed the Zacks Consensus Estimate by 2% and declined 22.6% year over year,
KBH’s earnings topped the consensus mark in three of the last four quarters and met on the remaining occasion, with an average surprise of 4.5%.
How Are KBH’s Estimates Placed?
For the fiscal second quarter, the Zacks Consensus Estimate for adjusted EPS has remained unchanged at 44 cents over the past 30 days. The projected figure indicates a 70.7% decline from the year-ago quarter’s earnings of $1.50 per share.
KB Home Price and EPS Surprise
KB Home price-eps-surprise | KB Home Quote
The consensus estimate for total revenues is pegged at $1.09 billion, indicating a decline of 28.7% from the prior-year quarter’s level.
Factors Likely to Have Shaped KB Home’s Q2 Performance
Revenues
In the fiscal second quarter, KB Home’s top line is expected to have tumbled year over year due to a decline in home deliveries and average selling price (“ASP”) of deliveries. Affordability concerns, elevated mortgage rates, cautious consumer sentiment and recent geopolitical uncertainty are likely to have continued weighing on housing demand. Due to the ongoing market pressures, the company expects housing revenues in the fiscal second quarter to range within $1.05-$1.15 billion, down from $1.52 billion reported a year ago. KBH expects home deliveries between 2,250 and 2,450 during the quarter, indicating a decline from 3,120 units delivered in the year-ago quarter.
Our Zacks model predicts housing revenues to be down year over year by 29.2% to $1.08 billion, with ASP on home deliveries being down 6.9% to $454,900. We expect home deliveries to be down 23.9% year over year to 2,374 homes.
Although demand conditions remain challenging, KB Home’s Built-to-Order strategy, improving build times, expanding community count and disciplined community-opening activity are likely to have supported sales activity and revenue visibility. The company’s focus on personalized home offerings and a growing mix of built-to-order sales is also expected to have provided some cushion against broader market weakness.
Margins
Although KB Home continues to focus on cost controls, lower build times and direct cost reductions, pricing pressure is likely to have remained the primary drag on profitability in the fiscal second quarter. Higher relative land costs, an unfavorable regional mix and reduced operating leverage from lower delivery volumes are also expected to have weighed on margins. KB Home expects adjusted housing gross margin in the range of 15-15.6%, significantly down from 19.7% reported in the year-ago quarter.
Our model projects adjusted housing gross margin and homebuilding adjusted operating margin to be 15.4% and 2.6%, respectively, indicating year-over-year declines of 430 basis points (bps) and 640 bps.
KBH expects selling, general & administrative expenses, as a percentage of housing revenues, to be between 12.4% and 13%, up from the year-ago figure of 10.7%. Our model expects the metric to be up year over year by 200 bps to 12.7% in the fiscal second quarter.
Orders & Backlog
Persistently high mortgage rates, affordability constraints and cautious consumer sentiment are likely to have continued weighing on order activity in the fiscal second quarter. Recent market uncertainty and softer sales trends observed toward the end of the fiscal first quarter might have also limited buyer urgency and delayed purchasing decisions.
Keeping these factors in mind, we expect new orders to decrease 0.3% to 3,449 units on a year-over-year basis. However, the backlog is expected to be 4,679 units, implying a 2% fall from 4,776 units reported in the prior year.
What Our Model Indicates for KBH
Our proven model does not predict an earnings beat for KB Home this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case this time around.
KBH’s Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
KBH’s Zacks Rank: The stock currently has a Zacks Rank #4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.
EMCOR Group, Inc. EME has an Earnings ESP of +0.38% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
EMCOR’s earnings beat estimates in three of the last four quarters and missed on the remaining occasion, the average surprise being 10.4%. The company’s earnings for the second quarter of 2026 are expected to rise 7.7%.
Comfort Systems USA, Inc. FIX currently has an Earnings ESP of +3.20% and a Zacks Rank of 1.
The company’s earnings beat estimates in each of the last four quarters, the average surprise being 39.3%. Comfort Systems’ earnings for the second quarter of 2026 are expected to grow 59%.
Quanta Services, Inc. PWR currently has an Earnings ESP of +1.66% and a Zacks Rank of 1.
The company’s earnings have topped in each of the trailing four quarters, the average surprise being 10.3%. Quanta’s earnings for the second quarter of 2026 are expected to grow 31.9%.
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