PHM FY2026 Q1 IMPROVING

PulteGroup, Inc. earnings call

Apr 23, 2026 · 04:30 ET James ZimmerJim OsowskiRyan Marshall

Buzzberg read

Shift back to 60% built-to-order; Q1 BTO orders at 43%

PulteGroup reported solid Q1 FY2026 results with 3% order growth, strong Florida performance, and significant progress reducing finished spec inventory. Management reaffirmed full-year guidance, expecting gross margins to trough in Q2 and recover in H2 on mix shift to build-to-order and active adult homes. Land costs are stabilizing, and the company maintains a near-zero net debt position while investing $1.3bn in land and returning $360mn to shareholders. Q1 FY2026 EPS $1.79 vs $2.57 prior year; gross margin 24.4% (down 310 bps YoY) reflecting 10.9% incentive load.

Buzzberg read Shift back to 60% built-to-order; Q1 BTO orders at 43% PulteGroup reported solid Q1 FY2026 results with 3% order growth, strong Florida performance, and significant progress reducing finished spec inventory. Management reaffirmed full-year guidance, expecting gross margins to trough in Q2 and recover in H2 on mix shift to build-to-order and active adult homes. Land costs are stabilizing, and the company maintains a near-zero net debt position while investing $1.3bn in land and returning $360mn to shareholders. Q1 FY2026 EPS $1.79 vs $2.57 prior year; gross margin 24.4% (down 310 bps YoY) reflecting 10.9% incentive load. Read full analysisCollapse analysis

Net new orders +3% to 8,034 homes, led by 18% growth in Florida; cancellation rate increased to 13% (from 11%) due to smaller starting backlog.
Finished spec inventory reduced to 1.5 per community (within 1-1.5 target), and build-to-order mix rose to 43% of orders (from 40% last year).
Full-year 2026 guidance reaffirmed: closings 28,500-29,000, gross margin 24.5%-25.0%, cash flow ~$1bn, land spend $5.4bn.

Revenue $3.4086B -26% QoQ

EPS $1.79 -31% QoQ

HOMEBUILDING gross margin 24.4% reported

Gross margin 24.12% reported

What changed this quarter

Built-to-order

Shift back to 60% built-to-order; Q1 BTO orders at 43%

Inventory

Finished spec inventory target reached, down 24% in Q1

Q1 FY2026 EPS $1.79 vs $2.57 prior year; gross margin 24.4% (down 310 bps YoY) reflecting 10.9% incentive load.

Margins

Q2 gross margin guided as low point, recovery in H2

Reported gross margin was 24.12%, reinforcing the quarter's better-than-guided profitability.

Incentives

Incentives elevated at 10.9% of gross sales price

Finished spec inventory reduced to 1.5 per community (within 1-1.5 target), and build-to-order mix rose to 43% of orders (from 40% last year).

Demand & capex

Demand

Bookings & conversion

Florida orders up 18% as diversified platform outperforms. Management acknowledged geopolitical uncertainty and affordability challenges but highlighted strong operational performance and expressed confidence in the business model and long-term housing demand.

Capex

Investment and capacity

Management is investing significantly in land acquisition and development, with $1.3 billion spent in Q1 2026 and a projected $5.4 billion for the full year to support 3-5% community count growth. Land prices are stabilizing and sometimes declining, allowing for improved deal terms.

Tone · Cautiously Optimisti

Management acknowledged geopolitical uncertainty and affordability challenges but highlighted strong operational performance and expressed confidence in the business model and long-term housing demand.

Supply-chain alpha

Home building cycle times are back to pre-COVID levels of under 100 days, enabling faster starts-to-closing conversion and more flexible inventory management.

“we've gotten build times, cycle times back down to pre-COVID cycle times of less than 100 days.”

Ryan Marshall

Lumber costs fell 5% YoY in Q1, but have recently risen; the impact on house costs will appear about two quarters later due to procurement lag.

“We had a really good first quarter. … flat to slightly down for the balance of the year.”

Jim Osowski

Land prices are stabilizing or even declining in some markets, and Pulte is negotiating better terms on deals—lower prices and/or extended timing.

“Land inflation has started to ease. … We are seeing land prices stabilize … and even move lower in individual deals.”

Jim Osowski

Florida continues to outperform, with 18% order growth in Q1, aided by falling new and existing home inventories in the state.

“this has been the third or fourth quarter in a row where we've highlighted the strength of the Florida market.”

Ryan Marshall

Incentives averaged 10.9% of gross sales price in Q1, up 290 bps YoY, but management expects them to decline as the mix shifts toward higher-margin build-to-order and active adult homes.

“we can see incentives come down because of buyer mix and brand mix.”

Ryan Marshall

Forward guidance

ImprovingGuidance tone · was IN LINE last Q

Forward guidance
Metric	Period	Range	Midpoint	Status
CapexLAND_ACQUISITION_AND_DEV	FY2026	$5.4B	$5.4B	GUIDED
Free cash flow	FY2026	$1B	$1B	GUIDED
Gross marginHOMEBUILDING	FY2026 Q2	24.1%–24.4%	24.25%	GUIDED
Gross marginHOMEBUILDING	FY2026	24.5%–25%	24.75%	MAINTAINED
Units	FY2026	28500–29000	28750	MAINTAINED
Units	FY2026 Q2	6700–7100	6900	GUIDED

Guidance credibility

1 / 2met or beat

Guidance credibility
Issued	Metric	Target	Guide	Actual	Outcome
FY2025 Q3	Free cash flow	FY2025	$1.4B	$1.9B	Met / beat
FY2025 Q3	Gross margin	FY2025 Q4	25.5%–26%	24.78%	Missed