KB Home Q3 revenue fell 20 percent, stock dropped

KB Home Stock Reverses After Q3 Earnings

KB Home shares reversed earlier gains and fell sharply in extended trading on Tuesday, September 22, 2026, after the homebuilder reported mixed fiscal third-quarter financial results.

The stock initially rose after KB Home posted diluted earnings per share of $1.05 for the quarter ended August 31. CNBC's Diana Olick later told Fast Money viewers on Tuesday that broader economic pressures are weighing heavily on the homebuilder sector.

Executive Chairman Jeffrey Mezger said the housing market continues to be challenging, with conditions weakening since the company's June earnings report due to higher mortgage rates.

Mezger added that geopolitical uncertainty and broader economic headwinds caused many prospective buyers to become more cautious about purchasing a home. He noted that higher mortgage interest rates have further pressured affordability across the United States and added to market worries.

President and Chief Executive Officer Robert McGibney said the company made significant progress and achieved its goal of returning to a predominantly Built to Order business.

Third Quarter Financial Results Show Revenue Decline

KB Home reported fiscal 2026 third-quarter total revenues of $1.30 billion, down 20 percent, with 2,732 homes delivered, a 19 percent decrease from the prior year.

The average selling price was $473,000 compared to $475,700, while reported net income fell to $65.3 million from $109.8 million in the same quarter last year.

Diluted earnings per share came in at $1.05 compared to $1.61 in the prior-year period, a sharp decline for the company. Homebuilding operating income was $67.1 million versus $131.2 million annually, with margin falling sharply to 5.2 percent from 8.1 percent.

Pretax income totaled $81.2 million during the quarter, including a $3.5 million gain on the sale of an equity investment in a privately held technology company.

Net orders of 2,604 decreased 12 percent, but ending backlog rose for the first time in four years, a positive sign. The number of homes in backlog increased 2 percent to 4,398, while backlog value rose 3 percent to $2.05 billion.

Community Growth, Buybacks, and Guidance

The average community count grew 8 percent to 279 during the quarter, and ending community count rose 5 percent to 277. The cancellation rate as a percentage of gross orders was 18 percent, compared to 17 percent in the prior year.

KB Home repurchased approximately 0.9 million shares of its outstanding common stock during the 2026 third quarter at a total cost of $50.0 million in cash.

The company reported total liquidity of $942.4 million, including $159.0 million in cash and $783.4 million in available credit capacity, with notes payable at $2.11 billion.

For the fourth quarter, KB Home expects 3,000 to 3,500 deliveries and $1.45 billion to $1.65 billion in housing revenues. For the full year, the company projected 10,500 to 11,000 deliveries and $4.90 billion to $5.10 billion in housing revenues.

Alan Ratner of Zelman joined Closing Bell Overtime to discuss the state of widely watched homebuilder stocks after KB Home reported its latest fiscal quarterly results.