Key Highlights

  • Diluted EPS of USD 2.67 fell 12% year over year and missed the consensus estimate of USD 3.01.
  • Revenue of USD 9.4 billion topped the consensus estimate of USD 9.07 billion; Net Income fell 18%.
  • Home sales gross Margin was 19.5%, down 120 basis points sequentially, and net sales orders dropped 7% to 18,619 homes.
  • Fiscal 2027 guidance calls for Revenue of USD 30.0 to 32.0 billion and 79,000 to 84,000 homes closed.

D.R. Horton, Inc. (NYSE:DHI) reported fiscal fourth quarter 2026 Diluted Earnings per Share of USD 2.67, down 12% from a year earlier and below a consensus estimate of USD 3.01. Consolidated revenues were USD 9.4 billion, above a consensus estimate of USD 9.07 billion, with net income attributable to the company of USD 741.8 million, down 18%. Pretax income was USD 1.0 billion at a margin of 10.8%, and the quarter included USD 91.4 million of inventory Impairment charges in the rental segment. Homebuilding revenue decreased 2% to USD 8.4 billion on 22,915 homes closed, also down 2%.

Margins and Orders Reflect a Softer Market

Home sales gross margin was 19.5%, down 120 basis points from the June quarter and below management plans. Management attributed 80 basis points of the decline to an inability to offset higher costs with pricing as conditions worsened, with above normal litigation costs accounting for the rest. Homebuilding SG&A was 8.7% of revenues, up 80 basis points. Net sales orders fell 7% to 18,619 homes and 9% in value to USD 6.6 billion, while the cancellation rate rose to 23% from 20%.

The company started 13,100 homes in the quarter, down 45% sequentially, and ended the year with 28,200 homes in inventory, of which 17,700 were unsold. Rental revenue was USD 647.1 million with a pretax loss of USD 25.3 million tied to nine multifamily projects. Forestar generated USD 580.8 million of revenue, and financial services earned USD 78.2 million pretax at a 35.7% margin.

Initial Fiscal 2027 Guidance

The Executive Chairman said rising Mortgage rates, affordability limits and cautious consumer sentiment pressured demand, and that incentives are projected to stay elevated in fiscal 2027. Initial guidance covers consolidated revenues of USD 30.0 to 32.0 billion, 79,000 to 84,000 homes closed, a tax rate near 25.5%, Operating Cash Flow near USD 3.5 billion, share repurchases near USD 3.0 billion and dividends near USD 500 million. Management described the ranges as wider than usual given uncertainty.

For the first fiscal quarter, management guides to revenues of USD 5.9 to 6.4 billion, 15,500 to 16,500 homes closed, a home sales gross margin of 18.0% to 18.5% and a pretax margin of 7% to 8%. The board raised the quarterly Dividend 11% to USD 0.50 per share, payable November 19, 2026 to holders of record on November 12.

Fiscal 2026 Capital Returns and Dates to Follow

For fiscal 2026, net income was USD 2.9 billion, or USD 10.11 per diluted share, on revenues of USD 33.0 billion. The company repurchased 24.0 million shares for USD 3.6 billion, cutting the share count 8%, and paid USD 513.3 million in dividends. Liquidity stood at USD 7.2 billion and Debt to total capital at 20.8%, and the USD 600 million 1.3% senior notes were repaid at Maturity in October 2026.

Items to follow include the first quarter gross margin guide of 18.0% to 18.5%, the order cancellation rate against 23%, and the unsold completed home count of 8,800. The first quarter fiscal 2027 report is scheduled for January 19, 2027.