D.R. Horton, Inc. (NYSE:DHI) on Thursday reported mixed fourth-quarter fiscal 2026 results, with earnings per share of $2.67 missing the $3.03 analyst estimate, while revenue of $9.371 billion topped expectations of $8.988 billion.
The homebuilder faced weaker demand and declining sales prices amid high mortgage rates and affordability pressures, while management warned of continued margin pressure in fiscal 2027.
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Home Sales and Demand Trends
Homebuilding revenue fell 2% year-over-year to $8.4 billion, while homes closed declined 2% to 22,915. The average closing price was $365,600, 27% below the U.S. new-home average in the fourth quarter.
Net sales orders decreased 7% Y/Y to 18,619 homes, while order value fell 9% to $6.6 billion. The average order price declined 2% to $356,600.
The cancellation rate rose to 23%, up from 20% a year earlier and in the previous quarter. Active selling communities increased 10% Y/Y.
Management cited high mortgage rates, affordability constraints and cautious consumer sentiment as factors weighing on demand.
Profitability and Cash Flow
Home sales gross margin fell 120 basis points sequentially to 19.5%, pressured by weaker pricing power and litigation costs. Management expects continued margin pressure and elevated incentives in fiscal 2027.
D.R. Horton started 13,100 homes in the fourth quarter, down 10% Y/Y. Land and development investments totaled $2 billion during the quarter, bringing the fiscal-year total to $8.2 billion.
The company generated $3.5 billion in operating cash flow in fiscal 2026 and ended Sept. 30 with $7.2 billion in liquidity, including $2.1 billion in cash and $5.1 billion in available credit facilities.
Shareholder Returns
D.R. Horton returned $4.1 billion to shareholders in fiscal 2026 through share repurchases and dividends. Over the past five years, the company returned $14 billion to shareholders.
The board increased the quarterly dividend by 11% to $0.50 per share, marking 13 consecutive years of dividend-per-share growth.
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Fiscal 2027 Outlook
D.R. Horton expects first-quarter revenue of $5.9 billion-$6.4 billion, below the $6.963 billion analyst estimate. For fiscal 2027, the company forecasts revenue of $30 billion-$32 billion, compared with the $33.653 billion estimate.
The company expects fiscal 2027 home closings of 79,000-84,000, operating cash flow of approximately $3.5 billion, $3 billion in share repurchases and $500 million in dividends.
For the first quarter, D.R. Horton projects home closings of 15,500-16,500.
Management expects high mortgage rates, affordability challenges and cautious consumer sentiment to continue weighing on housing demand.
DHI Stock Price Activity: D.R. Horton shares were up 0.32% at $142.54 at the time of publication Thursday.
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