PulteGroup Inc

Strong operating momentum; orders up with mix shift toward build-to-order (BTO) - Q2 net new orders: +6% YoY to 7,536 homes; order value: +5% to $4.1B. - By buyer group: First-time +5%, Move-up +4%, Active adult +12%. - BTO execution improving: BTO = 45% of new orders in Q2 (vs mix target ~60% BTO long-term); sequentially, incentives improved as the company transitions back to BTO. - Finished spec inventory reduced meaningfully: ended Q2 at ~1.3 finished spec homes per community (vs 1.9 a year earlier), supporting a “sell from strength” posture. - Surprising/positive detail: Q2 incentives on closings down 50 bps sequentially, and option/lot premiums near $107k (comparable to prior year/quarter), implying buyers still pay for location/options.

Profitability solid with reaffirmed guidance; margins helped by mix + discount discipline - Q2 homebuilding gross margin: 25.0% (up 60 bps sequentially). - Incentives: 10.4% of revenue (down 50 bps sequentially). - House costs: ~$75/sq ft, down 5% YoY and slightly down vs Q1; company cautioned the lumber-cost tailwind fades later in 2026, but still expects costs to be down slightly YoY. - Guidance reaffirmed: FY2026 closing gross margin 24.5%–25.0% (Q3 expected 24.5%–25.0%). - Net income/EPS: Q2 net income $472M; EPS $2.48 (vs $608M; $3.03 YoY). EPS declined mainly due to lower closings and mix/volume.

Demand/geography: “stabilization” signals in most regions; Florida and Midwest stand out; West remains softer - Management said early stabilization is visible; positive YoY order growth in 4 of 5 regions, with the West still the softest. - Florida remains the key strength: Q2 orders +19% YoY. - Other supportive pockets: Midwest (e.g., Columbus/Cleveland/Chicago), Southeast (including Greenville/coastal Carolinas). - Texas: orders positive YoY, but management isn’t declaring victory yet. - Demand variability continues due to global tensions, macro uncertainty, and interest-rate movement (week-to-week noise).