KB Home (KBH) Reports Earnings Tomorrow: What To Expect

Ladies and gentlemen, buckle up! KB Home (NYSE: KBH) is set to report its first-quarter 2025 earnings results after the market closes on Monday, March 24, 2025. This is a big deal, folks! The housing market is facing some serious headwinds, and KB Home is right in the middle of it. So, let's dive in and see what we can expect from this earnings report.

First things first, let's talk about revenue. Analysts are projecting revenue of $1.5 billion for KBH for the first quarter of 2025. That's a growth of over 2% from the same period a year ago. In the fourth quarter of 2024, revenue grew 19% year-over-year to $2 billion. That's some serious growth, folks! But here's the thing: the housing market is facing a challenging environment due to macroeconomic headwinds weighing on demand. The use of higher incentives to drive demand could put pressure on margins. These factors have somewhat dampened the expectations on KBH’s performance in the first quarter of 2025.

Now, let's talk about earnings. The consensus estimate for earnings per share in Q1 2025 is $1.59, which implies a decline of 10% from the prior-year period. In Q4 2024, EPS increased 36% YoY to $2.52. That's a big drop, folks! But don't worry, KB Home has a plan. They're focusing on their built-to-order model, which allows buyers to tailor their homes to suit their needs and alter their final sales price based on those options. In Q4, over 60% of its deliveries came from built-to-order sales. That's a smart move, folks!

But here's the thing: the homebuilder continues to offer incentives to support home buyers with their purchases. These incentives may weigh on margins. KBH continues to work on reducing its direct costs to offset the impact of these concessions. KBH expects homebuilding operating income margin to be approx. 9.5% in Q1 2025. Homebuilding operating income margin was 11.5% in Q4. Housing gross profit margin is projected to be 20.0-20.4% in Q1. In Q4, housing gross profit margin increased 20 basis points YoY to 20.9%.



So, what does all this mean for KB Home's performance in the first quarter of 2025? Well, folks, it's a mixed bag. The challenging housing market and macroeconomic headwinds are expected to have a significant impact on KB Home's performance. But KB Home is not sitting idly by. They're taking action to mitigate these risks. They're focusing on their built-to-order model and working on reducing their direct costs. That's the kind of proactive approach that investors love to see!

So, what should you do? Well, folks, it's time to pay attention. KB Home's earnings report is coming up, and it's going to be a big deal. Stay tuned, and get ready to make some moves!