KB Home Q2 revenue falls 27%, margin compresses 410bp on strategic shift to Built to Order

Filed July 9, 2026 · Period ending May 31, 2026 · Compared to 10-Q Jul 10, 2025 · ~2 min read

Key Changes

• high

  Housing revenues declined 27.3% to $1.11B (2,395 homes at $461,900 ASP) as the company shifted to Built to Order homes, which creates a near-term delivery trough but provides greater margin visibility once backlog converts.

  MD&A: Q2 housing revenues verify on EDGAR →
• high

  Gross margin compressed 410bp to 15.2% on price cuts to stimulate demand, higher land costs, and reduced operating leverage; FY26 full-year margin guided to 16.1–16.5%, down 260–300bp from FY25's 19.1%.

  MD&A: Q2 housing gross profit margin verify on EDGAR →
• high

  Net income fell 75% to $27.3M (EPS $0.43) as operating income margin compressed 610bp to 2.5%, reflecting the combined impact of margin pressure and 200bp SG&A deleverage.

  MD&A: Q2 net income and EPS verify on EDGAR →