Lennar Corporation (NYSE: LEN) shares dropped more than 4% intra-day on Wednesday after the homebuilder reported fourth-quarter earnings that fell short of analyst expectations, even as revenue exceeded forecasts amid a challenging housing environment.
The second-largest U.S. homebuilder posted adjusted earnings per share of $2.03 for the quarter, missing the consensus estimate of $2.21. Revenue totaled $9.4 billion, topping analyst expectations of $9.01 billion. Lennar delivered 23,034 homes during the quarter, representing a 4% increase year over year, while new orders climbed 18% to 20,018 homes. However, the average sales price declined 10% from a year earlier to $386,000, reflecting heavier use of incentives to stimulate demand in an affordability-constrained market.
Gross margin on home sales narrowed sharply to 17.0% from 22.1% in the prior-year quarter, driven by lower revenue per square foot, higher land costs, and continued use of incentives averaging about 14%.
Looking ahead to the first quarter of fiscal 2026, Lennar said it expected to deliver between 17,000 and 18,000 homes, with an average sales price ranging from $365,000 to $375,000. Gross margins were forecast to be between 15% and 16%, below fourth-quarter levels due to seasonal factors and prevailing market conditions.
For full-year fiscal 2025, Lennar delivered 82,583 homes, a 3% increase from the prior year, and generated total revenue of $34.2 billion.
