KB Home (KBH) 2021 Q2 Earnings Report

KB Home (NYSE:KBH) traces its roots back to 1956 when Donald Kaufman and Eli Broad started building two model houses in the Northeast Detroit suburbs. Their model houses became famous, and the positive feedback helped them build and sell 600 homes in the first two years. KB Home grew over the years by stepping into new markets and acquiring other homebuilders. Today, it is one of the top home builders in America, operating in 45 markets across eight states.

The California-based home builder recently announced better-than-expected earnings for the second quarter, but its revenue fell short of expectations. KB Home reported earnings of $1.50 per share for the three months ended May 31, well above 55 cents per share in the comparable period of 2020. Analysts, on average, were expecting earnings of $1.33 per share.

Revenue for the quarter jumped 58 percent on a year-over-year basis to $1.44 billion but missed the consensus forecast of $1.48 billion. Home deliveries in the quarter jumped 40 percent to 3,504. Moreover, the average selling price rose 13 percent to $409,800.

Commenting on the performance, CEO Jeffrey Mezger said in a statement, “Our second quarter results reflect the sustained strength and health of our business. In particular, our ability to optimize our assets was evident in our gross margin rising above 21%, which drove our operating margin to exceed 11%, both of which represented the best quarterly margins we have generated in many years. Operationally, our team remains resilient, focused on delivering exceptional customer satisfaction amid the challenges associated with the incredible demand and supply chain constraints that have characterized this housing market over the past year. As we continue to generate strong net orders, we have also been able to scale up our production, matching starts to sales.”

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