Key Highlights:

  • Home Closing Revenue came in at USD 1.39 billion, representing a 14% decrease driven by 11% lower home closing volume.
  • Adjusted Diluted EPS totaled USD 1.42, excluding USD 3.6 million in real estate inventory impairments and USD 300,000 in terminated.
  • Full-Year 2026 Land Spend Guidance stood at USD 1.7 billion to USD 2.0 billion, focused on future communities for 2028.
  • Adjusted Home Closing Gross Margin was reported at 18.6%, reflecting a 280-basis-point decline year over year due to lost leverage.

Meritage Homes Corporation (NYSE:MTH) is scheduled to report third quarter results on Wednesday, Oct. 28, after the market close. Consensus estimates call for adjusted earnings per share of USD 1.17 on revenue of USD 1.29 billion, against a market capitalization of USD 4.15 billion.

In the most recently reported quarter, Home Closing Revenue came in at USD 1.39 billion, representing a 14% decrease driven by 11% lower home closing volume and a 4% decline in average sales prices. Adjusted Diluted EPS totaled USD 1.42, excluding USD 3.6 million in real estate inventory impairments and USD 300,000 in terminated land deal walk-away charges.

Home Orders and Other Business Trends

Home Orders came in at 3,575 units, a 9% decrease resulting from a 19% decline in the average absorption pace. Average Sales Price (ASP) on Orders totaled USD 385,000, a 3% decrease primarily due to geographic mix shifting from the higher-priced West region into the lower-priced East region. Active Community Count stood at 340 communities, an increase of 9% year over year, though 1% lower than the first quarter of 2026 due to timing of closeouts and delayed openings. Backlog Conversion Rate was reported at 200%, reflecting the company strategy of pre-started inventory and improved cycle times.

What Management Guided

Third-Quarter 2026 EPS Guidance came in at USD 1.10 to USD 1.30 per diluted share, assuming a tax rate of 24.5% to 25.0%.

Ending Backlog and Capital Position

Ending Backlog came in at 1,715 units with a total value of USD 661.9 million, compared to 1,748 units in the prior year. Spec Home Inventory totaled 5,100 units, down 27% year over year and representing a four-month supply at the lower end of management target range. Completed Specs stood at 1,500 units, a 42% decrease year over year that reflects management efforts to reduce aged inventory. Cycle Times was reported at Under 110 calendar days, maintained for the fifth consecutive quarter to support a 60-day closing guarantee. Direct Construction Costs came in at 6% reduction per square foot year over year, driven by purchasing efficiencies in both labor and materials.

Selling, General and Administrative (SG&A) Expenses and Additional Detail

Selling, General and Administrative (SG&A) Expenses came in at 10.4% of revenue, compared to 10.2% last year, as lost revenue leverage was partially offset by reduced compensation and discretionary costs. Land Acquisition and Development Spend totaled USD 357 million in the quarter, a 30% decrease from USD 509 million in the prior year. Shareholder Returns stood at USD 131 million, consisting of USD 100 million in share repurchases of over 1.5 million shares and USD 31 million in cash dividends. Full-Year 2026 Outlook was reported at Management projects home closing volume and revenue to be approximately 5% below full-year 2025 results. Third-Quarter 2026 Projections came in at Home closings of 3,300 to 3,600 units and home closing revenue of USD 1.26 billion to USD 1.35 billion.

Figures to Follow in the Release

Investors can watch third quarter results against the figures management has already put on record, including the following: Full-Year 2026 Land Spend Guidance came in at USD 1.7 billion to USD 2.0 billion, focused on future communities for 2028 and beyond.