Key financial results
- For the fourth quarter, consolidated pretax income was $1 billion on revenues of $9.4 billion with a pretax profit margin of 10.8%.
For the fourth quarter, our consolidated pretax income was $1 billion on revenues of $9.4 billion with a pretax profit margin of 10.8%.
- For the full fiscal year 2026, consolidated pretax income was $3.9 billion on revenues of $33 billion, with a pretax profit margin of 11.8%.
For the year, our consolidated pretax income was $3.9 billion on revenues of $33 billion, with a pretax profit margin of 11.8%.
- Net income for the fourth quarter was $741.8 million or $2.67 per diluted share.
Net income for the quarter was $741.8 million or $2.67 per diluted share on consolidated revenues of $9.4 billion.
- Full year net income was $2.9 billion or $10.11 per diluted share.
For the year, net income was $2.9 billion or $10.11 per diluted share on revenues of $33 billion.
- Home sales revenues in the fourth quarter totaled $8.4 billion on 22,915 homes closed, with an average closing price of $365,600.
Home sales revenues in the fourth quarter totaled $8.4 billion, on 22,915 homes closed.
- The fourth quarter home sales gross profit margin was 19.5%, down 120 basis points sequentially and below expectations.
Our gross profit margin on home sales revenue in the fourth quarter was 19.5%, down 120 basis points sequentially from the June quarter and below our expectations.
- Homebuilding SG&A expenses for the quarter were 8.7% of revenues, up 80 basis points year-over-year.
SG&A expense as a percentage of revenues was 8.7%, up 80 basis points.
Business segment results
- Rental operations: Rental operations generated $647 million of revenue in the fourth quarter from the sale of 509 single-family rental homes and 2,182 multifamily rental units.
In the fourth quarter, our rental operations generated $647 million of revenue from the sale of 509 single-family rental homes and 2,182 multifamily rental units.
- Rental operations: The Rental segment recorded a pretax loss of $25.3 million for the fourth quarter, including $91.4 million of inventory impairment charges related to 9 completed multifamily projects.
The Rental segment's pretax loss of $25.3 million for the quarter includes $91.4 million of inventory impairment charges related to 9 completed multifamily projects.
- Financial Services: Financial Services reported fourth quarter pretax income of $78 million on $219 million of revenues, resulting in a pretax profit margin of 35.7%.
Pretax income for the fourth quarter was $78 million on $219 million of revenues resulting in a pretax profit margin of 35.7%.
- Financial Services: Financial Services earned $258 million of pretax income for the full year on $817 million of revenues with a 31.6% pretax profit margin.
For the year, Financial Services earned $258 million on pretax income on $817 million of revenues with a pretax profit margin of 31.6%.
- Forestar: Forestar reported fourth quarter revenues of $581 million on lots sold with pretax income of $79 million and a pretax profit margin of 13.5%.
- Forestar: For the full year, Forestar delivered 13,545 lots generating $1.6 billion of revenues and $192 million in pretax income.
For the full year, Forestar delivered 13,545 lots generating $1.6 billion of revenues and $192 million in pretax income with a pretax profit margin of 11.7%.
Capital allocation
- The company generated $3.5 billion of cash from operations during fiscal 2026 and returned $4.1 billion to shareholders through share repurchases and dividends.
In fiscal 2026, we generated $3.5 billion of cash from operations and returned $4.1 billion to shareholders through repurchases and dividends.
- During the fourth quarter, D.R. Horton repurchased 9.4 million shares of common stock for $1.4 billion.
During the quarter, we repurchased 9.4 million shares of common stock for $1.4 billion.
- For the full year, the company repurchased 24 million shares for $3.6 billion, reducing the outstanding share count by 8%.
And for the full year, we repurchased 24 million shares for $3.6 billion, which reduced our outstanding share count by 8% from a year ago.
- The company paid cash dividends of $125 million during the quarter and $513 million for the full fiscal year.
We also paid cash dividends of $125 million during the quarter and $513 million during fiscal 2026.
- The Board declared a new quarterly dividend of $0.50 per share, an 11% increase, marking the 13th consecutive year of dividend growth.
- Consolidated liquidity at September 30 was $7.2 billion, consisting of $2.1 billion of cash and $5.1 billion of available capacity on credit and mortgage repurchase facilities.
At September 30, we had $7.2 billion of consolidated liquidity consisting of $2.1 billion of cash and $5.1 billion of available capacity on our credit and mortgage repurchase facilities.
Industry trends and dynamics
- New home demand came under increased pressure in the fourth quarter as sharp increases in mortgage rates further constrained affordability and consumer sentiment remained cautious.
New home demand came under increased pressure in the fourth quarter as mortgage rates rose sharply, which further constrained affordability while consumer sentiment remained cautious.
- Net sales orders in the fourth quarter decreased 7% from the prior year quarter to 18,619 homes, and order value declined 9% to $6.6 billion.
Net sales orders in the fourth quarter decreased 7% from the prior year quarter to 18,619 homes and order value declined 9% to $6.6 billion.
- The cancellation rate for the quarter was 23%, compared to 20% sequentially and year-over-year.
Our cancellation rate for the quarter was 23% compared to 20% sequentially and year-over-year.
- The average number of active selling communities increased 2% sequentially and 10% year-over-year.
Our average number of active selling communities increased 2% sequentially and 10% year-over-year.
Competitive landscape
- D.R. Horton completed its 25th consecutive year as America's largest builder by volume, providing homes to more than 84,000 families and individuals in fiscal 2026.
- Management noted that weaker market conditions provide even better opportunities to consolidate market share.
weaker market conditions give us an even better opportunity to consolidate share.
- The company continues to see builder opportunities for potential acquisitions and transition of builders into lot developers.
Macroeconomic environment
- Management highlighted that macroeconomic challenges include sharp rises in mortgage rates, cautious consumer sentiment, and geopolitical noise affecting consumer confidence.
There's just a lot of noise today out there and consumer sentiment. People are just held back from moving forward.
- The company expects mortgage rates to remain elevated without significant near-term reductions, relying instead on stabilization in consumer sentiment and other factors.
not expecting to see much reduction in rates in the near term.
Growth opportunities and strategies
- The company continues to focus on affordability, noting that 63% of homes financed by its mortgage company this quarter were to first-time homebuyers.
63% of the D.R. Horton Homes that our mortgage company financed this quarter, were to first-time homebuyers.
- D.R. Horton is adjusting its product offerings by reducing average square footage and increasing attached closings like townhomes and duplexes to address affordability.
we're down 4% in our average square footage over the last 5 years. And we've also seen an increase in our number of attached closings
- Starts were reduced by 45% sequentially in the September quarter to 13,100 homes in order to align inventory with current demand.
We started 13,100 homes in the September quarter, down 45% sequentially and 10% from the prior year quarter to align with the current sales environment.
Financial guidance and outlook
- For the full year fiscal 2027, D.R. Horton expects consolidated revenues of approximately $30 billion to $32 billion.
for the full year of fiscal 2027, we currently expect to generate consolidated revenues of approximately $30 billion to $32 billion
- Full year fiscal 2027 homes closed by homebuilding operations are expected to be in the range of 79,000 to 84,000 homes.
homes closed by our humbling operations to be in the range of 79,000 to 84,000 homes.
- For the first fiscal quarter ending December 31, consolidated revenues are expected to be between $5.9 billion and $6.4 billion.
For our first fiscal quarter ending December 31, we currently expect to generate consolidated revenues in the range of $5.9 billion to $6.4 billion
- First quarter home sales gross margin is expected to be in the range of 18% to 18.5%, and consolidated pretax profit margin in the range of 7% to 8%.
- The company plans to repurchase approximately $3 billion of common stock and pay around $500 million in dividends during fiscal 2027.
we currently plan to repurchase approximately $3 billion of our common stock in addition to paying dividends of around $500 million.
Q4 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Consolidated Revenues | $9.4 billion | Not stated |
| Net Income | $741.8 million | Not stated |
| Diluted Earnings Per Share | $2.67 per share | Not stated |
| Home Sales Revenues | $8.4 billion | Not stated |
| Homes Closed | 22,915 homes | Not stated |
| Home Sales Gross Margin | 19.5% | down 120 basis points sequentially |
How management sounded
Cautious (+5 on our -100 to +100 scale). Management acknowledged increased pressure from rising mortgage rates and cautious consumer sentiment, resulting in lower net sales orders and reduced guidance ranges. Management sounded more upbeat than on 1% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Trajectory of mortgage rates and consumer sentiment during the spring selling season.
- Levels of homebuyer incentives and rate buydowns required to maintain sales pace.
- Performance and inventory levels of the rental operations segment.
Earlier calls
- Q3 FY2026 (Jul 21, 2026), tone Balanced: D.R. Horton reported diluted earnings per share of $3.20 on consolidated revenues of $9.2 billion, delivering solid results supported by disciplined cost control and lower stick and brick expenses.
