KB Home shares face pressure as the builder cuts its Q4 margin and pricing outlook due to softening Southern California demand and rising construction costs.
KB Home reported Q3 results that met guidance but lowered Q4 average selling price and gross margin outlook due to weaker California sales, higher costs, and unfavorable mix, while revenue fell 20% year-over-year.
KB Home reported third-quarter fiscal 2026 revenue of $1.3 billion, a 20% year-over-year decline driven by a 19% drop in home deliveries. While the company met its quarterly guidance, management lowered its Q4 outlook for average selling prices and gross margins, citing weaker sales in Southern California and persistent inflationary pressures.
The downward revision is primarily due to slower sales in Southern California, which reduced the number of higher-priced home closings, alongside rising costs and an unfavorable delivery mix.