D.R. Horton reported a solid Q1 FY2026 with revenues of $6.9B and 17,818 closings, albeit down YoY. Demand remains constrained by affordability, but orders grew 3% with increased incentives. Management reaffirmed full-year guidance of 86-88k closings and $33.5-35B revenue, while guiding Q2 margins lower due to higher incentives. The tone is cautious but disciplined, with a focus on cycle time improvements and capital efficiency. Q1 revenues $6.9B (down YoY), home sales gross margin 20.4% (includes 40bps warranty recovery; underlying 20.0%).
D.R. Horton reported a solid Q1 FY2026 with revenues of $6.9B and 17,818 closings, albeit down YoY. Demand remains constrained by affordability, but orders grew 3% with increased incentives. Management reaffirmed full-year guidance of 86-88k closings and $33.5-35B revenue, while guiding Q2 margins lower due to higher incentives. The tone is cautious but disciplined, with a focus on cycle time improvements and capital efficiency. Q1 revenues $6.9B (down YoY), home sales gross margin 20.4% (includes 40bps warranty recovery; underlying 20.0%).
Management acknowledges affordability and consumer sentiment challenges but expresses confidence in their positioning and disciplined approach, maintaining guidance and highlighting operational strengths.
Reported gross margin was 23.16%, reinforcing the quarter's better-than-guided profitability.
Guidance · revenue to $34.25B
Community count up 12% YoY; management expects growth to moderate to mid-single digits.
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Net sales orders increased 3% despite affordability constraints. Management acknowledges affordability and consumer sentiment challenges but expresses confidence in their positioning and disciplined approach, maintaining guidance and highlighting operational strengths.
Management is focused on managing investments in lots, land, and development based on current market conditions, with a shift toward more land developed by others to enhance capital efficiency. They continue to invest in land and development with total investments of $2 billion in the first quarter, and expect starts to increase in the second quarter.
Management acknowledges affordability and consumer sentiment challenges but expresses confidence in their positioning and disciplined approach, maintaining guidance and highlighting operational strengths.
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Gross marginHOME_BUILDING | FY2026 Q2 | 19%–19.5% | 19.25% | GUIDED |
| Op margin | FY2026 Q2 | 10.6%–11.1% | 10.85% | GUIDED |
| Revenue | FY2026 | $33.5B–$35B | $34.25B | MAINTAINED |
| Revenue | FY2026 Q2 | $7.3B–$7.8B | $7.55B | GUIDED |
| UnitsHOME_BUILDING | FY2026 | $86K–$88K | $87K | MAINTAINED |
| UnitsHOME_BUILDING | FY2026 Q2 | $19.7K–$20.2K | $19.95K | GUIDED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q2 | Gross margin | FY2026 Q3 | 19.7%–20.2% | 20.7% | Met / beat |
| FY2026 Q2 | Op margin | FY2026 Q3 | 12.2%–12.7% | 13.29% | Met / beat |
| FY2026 Q2 | Revenue | FY2026 Q3 | $8.8B–$9.3B | $9.2271B | Met / beat |
| FY2025 Q4 | Op margin | FY2026 Q1 | 11.3%–11.8% | 10.59% | Missed |
| FY2025 Q4 | Revenue | FY2026 Q1 | $6.3B–$6.8B | $6.8869B | Met / beat |