By Denny Jacob
D.R. Horton reported declines to its top and bottom lines as a combination of cautious demand and weak economic conditions weighed on results, prompting the company to reduce its outlook for the year.
The home builder forecast fiscal 2025 revenue between $33.3 billion and $34.8 billion, as well as homes closed by homebuilding operations in the range of 85,000 to 87,000 homes. The company previously forecast revenue between $36 billion and $37.5 billion, as well as homes closed in the range of 90,000 to 92,000.
Executive Chairman David Auld said the spring selling season has started slower than the company expected as would-be buyers remain cautious. He added that sales incentives are being increased where necessary to drive traffic and incremental sales.
The critical spring selling season was previously described by D.R. Horton and other builders as largely determining the outlook for the second half of the year. But that was mostly before all of the current tariffs put forth by the Trump administration were announced.
Factors including persistently high home prices and mortgage rates combined with declining consumer confidence and tariffs that threaten to raise costs further have dented a fuller housing market recovery, though it has started to thaw.
D.R. Horton closed 19,276 homes in the quarter, a 15% decline from 22,548 homes in the same quarter of fiscal 2024.
The Arlington, Texas, company logged net income of $810.4 million, or $2.58 a share, for the second quarter ended March 31, down from $1.17 billion, or $3.52 a share, in the prior-year period. Analysts polled by FactSet had expected $2.63 a share.
Revenue declined to $7.73 billion from $9.11 billion. Analysts polled by FactSet had expected $8.03 billion.
Gross margins on home sales came in at 21.8%. The metric is being watched for builders at large given their ongoing usage of incentives such as mortgage rate buydowns to spur sales.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
April 17, 2025 06:58 ET (10:58 GMT)
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