Lennar Corporation — Third Quarter 2026 Earnings Summary

Financial Performance

• Net earnings attributable to Lennar were $284 million ($1.19 per diluted share), compared to $591 million ($2.29 per diluted share) in the prior year quarter.
• Excluding mark-to-market losses of $53 million on technology investments and one-time items of $39 million, net, in Financial Services, adjusted net earnings were $294 million ($1.23 per diluted share).
• Total revenues were $8.0 billion, a decrease from $8.8 billion in the prior year quarter.
• Homebuilding revenues were $7.7 billion, down 6% year-over-year, driven by a 3% decrease in average sales price to $372,000 and a 3% decrease in deliveries to 20,840 homes.
• Homebuilding operating earnings were $502 million, compared to $760 million in the prior year quarter.
• Gross margin on home sales was 15.8%, down from 17.5% in the prior year quarter.
• Selling, general and administrative (SG&A) expenses were $714 million (9.2% of home sales revenues), up from $676 million (8.2%) in the prior year quarter.
• Net margin on home sales was 6.6%.
• Financial Services operating earnings were $129 million, down from $177 million in the prior year quarter; this included a $39 million one-time gain from a litigation accrual reversal.
• Multifamily operating loss was $3 million, an improvement from a $16 million loss in the prior year quarter.
• Lennar Other operating loss was $84 million, compared to $62 million in operating earnings in the prior year quarter, primarily due to $53 million in mark-to-market losses on technology investments.
• Homebuilding cash and cash equivalents were $1.2 billion.
• Homebuilding debt to total capital was 16.6%.
• Outstanding borrowings were $650 million under a $3.1 billion revolving credit facility.
• The company redeemed $400 million of 5.25% senior notes due June 2026.

Guidance and Future Outlook

• Q4 2026 new orders are expected to be 19,500 to 20,500 homes.
• Q4 2026 deliveries are expected to be 22,000 to 23,000 homes.
• Q4 2026 gross margin on home sales is expected to be 15.5% to 16.0%.
• Q4 2026 average sales price is expected to be $370,000 to $380,000.
• Q4 2026 SG&A as a percentage of home sales is expected to be 8.7% to 9.0%.
• Q4 2026 Financial Services operating earnings are expected to be $90 million to $95 million.
• Full-year 2026 deliveries are moderated to 80,000 to 81,000 homes, down from the previous guidance of 82,000 to 83,000 homes.

Business Segments and Product Lines

• Homebuilding deliveries totaled 20,840 homes across 1,713 active communities.
• New orders totaled 20,879 homes.
• Backlog consists of 16,857 homes with a dollar value of $6.3 billion.
• Construction cost per square foot improved 1% sequentially and 6% year-over-year.
• Cycle time reached a record low of 116 days, down from 121 days last quarter and 126 days a year ago.
• Completed, unsold inventory decreased to 1.8 homes per community from 2.1 homes per community last quarter.
• Inventory turn stands at 2.4 times.
• Of approximately 488,000 homesites owned and controlled, fewer than 2.5% are on the balance sheet.
• The average sales price included approximately 12.0% in incentives.

Market and Competitive Landscape

• The 30-year mortgage rate was approximately 6.8% at quarter end.
• Consumer confidence has declined due to rates and affordability constraints.
• The housing environment remains constructive due to ongoing housing shortages driving demand from primary buyers and build-to-rent buyers.
• Inflation remains above the Fed's target, driven by geopolitical tension and higher oil prices.

Risks and Challenges

• Market conditions have deteriorated since the last earnings call, with increased mortgage rates and reduced consumer confidence.
• Affordability remains the defining constraint on the market.
• Gross margin pressure was caused by lower revenue per square foot and higher land costs year-over-year, partially offset by decreased construction costs.
• SG&A expenses increased as a percentage of revenue due to lower revenue leverage and increased marketing and selling expenses.

Management Commentary and Tone

• Executive Chairman Stuart Miller stated that results reflect a consistent focus on maintaining volume and production while navigating a challenging economic environment.
• Management noted that earnings were below expectations due to the nature of the operating environment.
• The company adhered to a strategy of leveraging consistent volume to drive costs lower.
• Management emphasized a commitment to meeting demand at affordability levels and building supply rather than waiting for the market to improve.
• The fundamental shortage of housing in America was cited as a long-term driver for the company's strategy.

Other Key Points

• The company repurchased 3 million shares of common stock for $256 million in the third quarter.
• The effective income tax rate increased to 26.4% in the third quarter of 2026 from 24.4% in the prior year quarter, primarily due to the spin-off of Millrose Properties, Inc.
• A conference call to discuss results was held on September 17, 2026.