America’s largest builder says sales incentives will need to continue if it’s going to keep moving houses, as it reported third-quarter results that beat analyst expectations.
“New home demand continues to be impacted by ongoing affordability constraints and cautious consumer sentiment,” DR Horton executive chairman David Auld said.
“We expect our sales incentives to remain elevated and increase further during the fourth quarter, the extent to which will depend on the strength of demand during the remainder of summer, changes in mortgage interest rates, and other market conditions.”
- Sales orders totaled 23,071, slightly higher than analysts had expected.
- The value of new orders slipped 3% to $8.4 billion but was still higher than analysts expected.
- The average value of a home was $364,100, down from $376,500.
- Revenue fell 7.4% to $9.2 billion, while profit dropped 24% to $1 billion.
Meanwhile, the company lowered its outlook for the year. It now expects to deliver up to 85,500 houses, down from its previous estimate of 87,000.
“Our strong liquidity, low leverage, experienced operators and national scale provide us with significant financial and operational flexibility,” Auld said. “We are well-positioned with our affordable product offerings and flexible lot supply and are focused on maximizing returns in each of our communities. We are maintaining our disciplined approach to capital allocation to enhance the long-term value of D.R. Horton, including consistently returning capital to our shareholders through share repurchases and dividends.”
