KB Home reported its financial results for the first quarter of fiscal 2025, revealing total revenues of $1.39 billion, a decrease of 5% from $1.47 billion in the same period last year. The decline was primarily driven by a 9% drop in the number of homes delivered, which totaled 2,770, alongside a 4% increase in the average selling price to $500,700. The company's net income for the quarter was $109.6 million, down 21% from $138.7 million a year earlier, resulting in diluted earnings per share of $1.49, compared to $1.76 in the prior year.
The company's homebuilding segment generated revenues of $1.39 billion, down from $1.46 billion, while the financial services segment saw revenues decline by 22% to $4.7 million. The overall pretax income fell by 20% to $139.4 million, with homebuilding pretax income decreasing by 19% to $131.8 million. The decline in profitability was attributed to higher land costs, increased homebuyer concessions, and reduced operating leverage due to lower housing revenues.
Operationally, KB Home experienced a 17% decrease in net orders, totaling 2,772 for the quarter, and a cancellation rate of 16%, up from 14% a year prior. The ending backlog of homes decreased by 23% to 4,436 homes, with a backlog value of approximately $2.20 billion, down 21% year-over-year. Despite these challenges, the company reported a 7% increase in its average community count to 257, indicating a strategic focus on expanding its market presence.
In response to the current market conditions, characterized by elevated mortgage interest rates and housing affordability concerns, KB Home has implemented targeted sales strategies, including selective price reductions and mortgage-related concessions. The company plans to continue investing in land and land development, with investments increasing by 57% to $920.3 million in the first quarter. Looking ahead, KB Home has revised its projections for the remainder of 2025, anticipating housing revenues between $6.60 billion and $7.00 billion, with an expected average selling price of $480,000 to $495,000. The company remains focused on balancing pace and price while adapting to market dynamics.
About KB HOME
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