KB Home Stock Sinks as Firm Warns Consumer Concerns Are Reducing Demand

KB Home (KBH) shares slumped Tuesday, a day after the homebuilder posted worse-than-expected results and cut its guidance as hesitancy by potential buyers reduced demand.

The company reported first-quarter fiscal 2025 earnings per share (EPS) of $1.49, with revenue falling 5% year-over-year to $1.39 billion. Both missed Visible Alpha forecasts. The number of homes delivered declined 9% to 2,770, although the average selling price rose 4% to $500,700.

CEO Jeffrey Mezger said that “consumers are working through affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing them to move slowly in their homebuying decisions.” Mezger noted that the start of the key spring selling season “was more muted than what we have seen historically, despite a healthy level of traffic in our communities.”

KB Home Lowers Full-Year Outlook

Mezger explained that despite improving sales trends, the company is lowering its full-year outlook “primarily to reflect the lower level of net orders we generated in the first quarter.” KB Home now sees housing revenue in the range of $6.6 billion to $7.0 billion, down from its earlier estimate of $7.0 billion to $7.5 billion. It anticipates the average selling price to be $480,000 to $495,000, down from $488,000 to $498,000.

Shares of KB Home dropped 6% to their lowest level in more than a year.