TLDR
- Q2 revenue reached $7.9 billion, falling short of Wall Street’s ~$8.1 billion projection
- Adjusted EPS of $1.31 slightly exceeded the $1.25 consensus, while reported EPS hit $1.24
- Gross margins on home sales compressed to 15.6% versus 17.8% in the prior-year period
- Full-year 2026 delivery outlook reduced to 82,000–83,000 units from previous 85,000 target
- Shares declined approximately 1.2% in premarket Friday trading following Thursday’s 5.7% rally
Lennar fell short of analyst revenue projections for its fiscal second quarter as challenging conditions in residential real estate persisted amid elevated borrowing costs and softening demand.
The major homebuilder posted total quarterly revenue of $7.9 billion for the period concluded May 31, 2026, undershooting the Street’s consensus of approximately $8.1 billion. In Friday’s premarket session, the stock retreated roughly 1.2% following a strong 5.7% advance during Thursday’s regular trading hours.
On a per-share basis, diluted earnings registered at $1.24, while the adjusted metric—which excludes mark-to-market adjustments on technology holdings—came in at $1.31. This adjusted result edged past the analyst consensus of $1.25.
The company’s average selling price declined 5% year-over-year to $371,000 from $389,000 in the comparable quarter. Lennar deployed incentives totaling 12.9% to stimulate buyer activity.
Home sales gross margin deteriorated to 15.6%, compared with 17.8% recorded twelve months earlier. The margin contraction stemmed primarily from lower per-square-foot pricing and higher land acquisition costs, partially mitigated by construction expense reductions.
The builder completed 20,519 home deliveries during the quarter, representing a 2% sequential increase. However, new home orders declined 4% on a year-over-year basis to 21,749 units.
Net income tumbled to $305 million from $477 million in the year-ago quarter.
Chief Executive Stuart Miller characterized the period as one “defined by the same stubborn headwinds that have challenged the housing market for the past several years — persistently elevated mortgage rates, constrained affordability, and cautious consumer sentiment.” He additionally referenced a renewed inflation surge to 4.2%, fueled by rising energy costs.
Annual Delivery Forecast Lowered
Lennar revised its fiscal 2026 home delivery projection downward to 82,000–83,000 units from an earlier forecast of approximately 85,000. Management attributed the reduction to ongoing interest rate headwinds and heightened geopolitical volatility.
Home sales revenue decreased 2% compared with the corresponding quarter in the previous fiscal year.
Third Quarter Outlook
For the upcoming third quarter, Lennar projected home deliveries in the range of 20,500 to 21,500 units with average sales prices between $375,000 and $380,000. The company anticipates home sales gross margin will improve to approximately 16%.
Share repurchase activity totaled $447 million during the quarter, encompassing 5 million shares. Lennar closed the period with $1.8 billion in homebuilding cash reserves and maintained full availability on its $3.1 billion revolving credit line.
Oppenheimer analyst Tyler Batory has suggested that Lennar’s land-banking commitments “add a layer of fixed cost to gross margin” and believes the stock should command a book value multiple comparable to smaller competitors.
Friday morning, Lennar announced plans to release an updated investor presentation detailing its asset-light operating strategy and “path to margin recovery.” Management scheduled an earnings conference call for 11 a.m. Eastern time.
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