"PulteGroup's President and CEO Ryan Marshall stated, 'We have said we are not going to chase volume. We are going to get our company back to a build-to-order model, which we are doing.' This reflects a strategic decision to prioritize profitability over volume in a challenging economic environment."
"Pulte believes this strategic shift will allow it to exit 2026 with stronger margins than it started with. However, execution will be challenging, and the payoff is unlikely to materialize overnight."
"Build-to-order inventory now accounts for 43% of net new orders, up from 40% last year. This quarter was just the first step in a process that will take several quarters to complete, but I am encouraged by such early success, Marshall said."
PulteGroup is pivoting towards build-to-order and active adult sales to improve profitability in response to economic challenges. The company reduced new spec deliveries and focused on selling existing inventory. Pulte aims for a business model of 60% build-to-order and 40% spec, with build-to-order inventory now at 43% of net new orders. This strategic shift is expected to strengthen margins by the end of 2026, although execution will take time and challenges remain.
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