KB Home pivots to its build-to-order strengths, but not without risk

"Quarterly revenue was $1.08 billion, down nearly 23% year over year. The average selling price fell 3% sequentially and nearly 10% from a year ago."

"Management is positioning a build-to-order-heavy operating model as the lever that can stabilize results in the back half of the year even if that comes at the cost of near-term deliveries."

"BTO orders represented about 57% of orders in Q4 2025. Executives previously expected to return to a 70% mix by the end of 2026, but said on the call the company exited February and entered March near that benchmark."

"We have a renewed focus on this core strategy as a central component in strengthening our company going forward, Executive Chairman Jeffrey Mezger said."

KB Home reported Q1 2026 revenue of $1.08 billion, a 23% decline year over year, with gross margins falling to 15.3%. The company cut its outlook for Q2 and full-year 2026, anticipating lower revenue and deliveries. Management is shifting towards a build-to-order model, aiming for 70% of sales to stabilize results despite short-term delivery impacts. This strategy leverages local market knowledge and operational skills to enhance margins and predictability in delivery schedules, with BTO orders at 57% in Q4 2025 and nearing the target mix by early 2026.

Read at www.housingwire.com