Dr Horton Stock Earnings Reports

D.R. Horton reported a solid start to FY2026 with Q1 consolidated pretax income of $798M on $6.9B revenue (pretax margin 11.6%). Key operating takeaways: net sales orders rose 3% YoY to 18,300 homes, closings exceeded guidance (17,818 homes) and average closing price was $365.5k (down 3% YoY). Home sales gross margin was 20.4% in Q1 (benefited +40 bps from a warranty recovery); management expects Q2 home sales gross margin of 19.0%–19.5% due to elevated incentives. Incentives increased through Q1 and will remain elevated in 2026, with the level dependent on demand and mortgage rates. D.R. Horton emphasized capital efficiency: $3.6B cash from operations over the trailing 12 months, $4.4B returned to shareholders last 12 months (buybacks + dividends), consolidated liquidity of $6.6B, debt $5.5B, and target leverage ~20%. Homebuilding inventory was 30,400 homes (20,000 unsold); cycle times improved (median start-to-close down two weeks YoY). Lot position ~590,500 lots (25% owned, 75% controlled); Forestar remains an important lot supplier. Guidance: Q2 consolidated revenue $7.3B–$7.8B, home closings 19,700–20,200; FY2026 consolidated revenue $33.5B–$35B; homebuilding closings 86,000–88,000; tax rate ~24.5%; operating cash flow at least $3B; share repurchases ~ $2.5B and dividends ~ $500M. Management reiterated a disciplined, returns-focused approach: they will manage starts, incentives, and inventory community-by-community to balance pace and margin and remain positioned to capture demand if mortgage rates remain favorable.