D.R. Horton, Inc.

Strong Q3 profitability + solid volumes (but EPS down YoY): D.R. Horton delivered Q3 FY2026 diluted EPS of $3.20 (vs $3.36 prior year), with net income $905M on $9.2B revenues. 23,983 homes closed (vs 23,160 prior year). Home sales gross margin was 20.7%, above the top end of guidance, but gross margin came with slightly fewer units and continued elevated incentives.

Demand softened → guidance trimmed (main “bad” point): Management said demand was softer later in the quarter than expected “normal seasonality,” leading to a full-year deliveries trim despite being at the high end of Q3 guidance. Key challenges cited: affordability constraints and cautious consumer sentiment, with rates/geopolitics weighing on buyer confidence. Cancellations rose to 20% (from 17% YoY; normal historical range). - Trends: average closing price $362K (down ~2% sequentially and ~down 2% YoY per commentary), and compared to the U.S. new-home average it’s ~$155K lower (~30%), reinforcing affordability focus.

Forward guidance (what investors should model): - Q4 expectations: consolidated revenues $8.8B–$9.3B; 22,500–23,000 homes closed; home sales gross margin 20.5%–21.0%; consolidated pre-tax margin 12.3%–12.8%. - Full-year FY2026 revised: consolidated revenues ~$32.5B–$33.0B; 83,800–84,300 homes closed (vs prior expectation per Q&A context); tax rate ~25%. - Cash returns outlook: operating cash flow ≥ $3B, repurchases ~ $2.5B, dividends ~ $500M.