KB Home Reports 2025 Second Quarter Results

KB Home, one of the largest homebuilders in the United States, has released its financial results for the second quarter of 2025, ending May 31. The company reported revenues of $1.53 billion and diluted earnings per share (EPS) of $1.50. Despite a challenging market environment, KB Home managed to meet or exceed its guidance ranges, demonstrating resilience and strategic focus.

Financial Highlights

For the second quarter of 2025, KB Home reported revenues of $1.53 billion, a decrease from $1.71 billion in the same period last year. The company delivered 3,120 homes, down 11% year-over-year, while the average selling price increased slightly to $488,700. Homebuilding operating income was $131.5 million, compared to $188.2 million in the previous year, with an operating income margin of 8.6%.

Net income for the quarter was $107.9 million, a 36% decrease from the prior year, and diluted EPS declined 30% to $1.50. The effective tax rate for the quarter was 24.2%, compared to 23.8% in the same period last year.

Business and Operational Highlights

KB Home's homebuilding operating income margin was impacted by a lower housing gross profit margin and higher selling, general, and administrative expenses. The housing gross profit margin was 19.3%, down from 21.1% in the previous year. The company also reported a decrease in homes delivered and net orders, with net orders down 13% to 3,460 and ending backlog homes totaling 4,776, a 27% decrease in value to $2.29 billion.

Despite these challenges, the company saw a slight increase in the average community count, which rose 5% to 254, and the ending community count increased 2% to 253.

Strategic Initiatives and Corporate Developments

KB Home repurchased $200 million of its outstanding common stock at an average price of approximately $54 per share during the second quarter, providing a strong return on capital. The company plans to continue share repurchases throughout the remainder of fiscal 2025, with $450 million remaining under its current repurchase authorization.

Additionally, the company is scaling back its land acquisition and development investments, focusing on optimizing its existing land pipeline and enhancing long-term stockholder value.

Management's Perspective

Jeffrey Mezger, Chairman and CEO of KB Home, commented on the company's performance, highlighting the solid financial results despite softened market conditions. Mezger emphasized the company's focus on lowering build times, reducing direct construction costs, and maintaining pricing transparency to enhance margins and returns.

Mezger also noted the balanced approach in capital allocation, adapting to market conditions while prioritizing future growth and returns to stockholders.

Future Outlook

Looking ahead, KB Home provided guidance for the full year 2025, expecting housing revenues in the range of $6.30 billion to $6.50 billion and an average selling price between $480,000 and $490,000. The company anticipates a homebuilding operating income margin of 8.6% to 9.0%, assuming no inventory-related charges, and a housing gross profit margin of 19.0% to 19.4%. The effective tax rate is projected to be approximately 24%, with an ending community count of around 250.

SEC Filing: KB HOME [ KBH ] - 8-K - Jun. 23, 2025