KB Home Keeps Toughing It Out
Here's our initial take on KB Home's (NYSE: KBH) fiscal 2025 second-quarter financial report.KB Home's management described the homebuilder's financial performance for the fiscal second quarter (ending May 31) as "solid," but there's no doubt that things are tough in the housing market. Revenue was down 11% year over year as the number of homes that KB Home delivered during the quarter fell by the same percentage. Net income plunged 36% as the homebuilder dealt with lower profit margins and higher overhead costs, and it took sizable repurchases of stock to cut the decline in earnings on a per-share basis to 30%. The company also had to offer larger concessions in order to get homebuyers to move forward with purchases.CEO Jeff Mezger tried to find good things about the challenges KB Home faces. The CEO pointed to shorter build times and lower construction costs as having been valuable in keeping KB Home operations going. At the same time, though, the company is cutting back on land acquisition and development investments as it waits for market conditions to improve. That, in turn, is freeing up more money for share buybacks. KB Home spent $200 million to repurchase stock at an average cost of about $54 per share. At that price, purchases boost book value, which is another positive.Continue reading
Here's our initial take on KB Home's (NYSE: KBH) fiscal 2025 second-quarter financial report.
KB Home's management described the homebuilder's financial performance for the fiscal second quarter (ending May 31) as "solid," but there's no doubt that things are tough in the housing market. Revenue was down 11% year over year as the number of homes that KB Home delivered during the quarter fell by the same percentage. Net income plunged 36% as the homebuilder dealt with lower profit margins and higher overhead costs, and it took sizable repurchases of stock to cut the decline in earnings on a per-share basis to 30%. The company also had to offer larger concessions in order to get homebuyers to move forward with purchases.
CEO Jeff Mezger tried to find good things about the challenges KB Home faces. The CEO pointed to shorter build times and lower construction costs as having been valuable in keeping KB Home operations going. At the same time, though, the company is cutting back on land acquisition and development investments as it waits for market conditions to improve. That, in turn, is freeing up more money for share buybacks. KB Home spent $200 million to repurchase stock at an average cost of about $54 per share. At that price, purchases boost book value, which is another positive.
