01—Abstract
Summary
Summary of the 10-Q filed April 9, 2026. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation's first quarter of fiscal 2026 (three months ended February 28, 2026) showed a sharp earnings decline.
Net earnings attributable to Lennar were $229.4 milliona, or $0.93 per diluted share, compared with $519.5 million, or $1.96 per diluted share, in the first quarter of 2025. Total revenues were $6.62 billion versus $7.63 billion a year earlier, with home sales revenue of $6.27 billion versus $7.24 billion. Homebuilding gross margin on home sales was 15.2%, compared with 18.7% in the prior-year quarter, and the company cited lower revenue per square foot and higher land costs.
Deliveries were 16,863 homes at an average sales price of $374,000,b versus 17,834 homes at $408,000. Management stated that sales incentives reached 14% of revenue and that it believes the first-quarter gross margin of 15.2% represents the low point for the fiscal year. Liquidity remained substantial, with homebuilding cash and cash equivalents of $2.09 billion and total liquidity of $5.2 billion at quarter end.
Cash used in operating activities was $434 millionc, driven by a $652 million increase in inventories and a $354 million increase in deposits and pre-acquisition costs on real estate. Homebuilding debt was $4.07 billion, and homebuilding debt to total capital rose to 15.7% from 8.9% a year earlier, and net homebuilding debt to total capital was 8.3%, compared with a negative figure a year earlier. The company repurchased $270 million of stock and paid $123 million in dividends, and it declared a quarterly dividend of $0.50 per share on April 8, 2026.
For the second quarter of 2026, management guided to new orders of 21,000 to 22,000 homes, deliveries of 20,000 to 21,000 homes, an average sales price of $370,000 to $375,000,d gross margins of 15.5% to 16%, and an SG&A percentage of 8.9% to 9.1%. Management also stated that margins will remain under pressure in the second quarter.
02—Key points
Key Highlights
- Net earnings attributable to Lennar were $229.4 million, or $0.93 per diluted share, versus $519.5 million, or $1.96 per diluted share, in Q1 2025.
- Total revenues were $6.62 billion, versus $7.63 billion in Q1 2025; home sales revenue was $6.27 billion, versus $7.24 billion.
- Homebuilding gross margin on home sales was 15.2%, down from 18.7%; sales incentives were 14.1% of revenue, versus 12.9% a year earlier.
- Average sales price of homes delivered was $374,000 versus $408,000, and deliveries were 16,863 homes versus 17,834.
- Net cash used in operating activities was $434 million; homebuilding cash and cash equivalents were $2.09 billion and total liquidity was $5.2 billion.
- Homebuilding debt to total capital rose to 15.7% from 8.9% a year earlier; the company repurchased $270 million of common stock and paid $123 million in dividends.
- Guidance for Q2 2026 calls for 20,000 to 21,000 deliveries and gross margins of 15.5% to 16%, with management describing the Q1 gross margin of 15.2% as the likely low point for the fiscal year.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 9, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $6.62B$7.63B | −13.3% |
| SG&A Expenses | $617.50M$615.74M | +0.3% |
| Operating Expenses | $6.40B$6.94B | −7.7% |
| Net Income | $229.38M$519.53M | −55.8% |
| EPS (Basic) | $0.93$1.96 | −52.6% |
| EPS (Diluted) | $0.93$1.96 | −52.6% |
| Shares Outstanding (Basic) | 244.44M262.73M | −7.0% |
| Shares Outstanding (Diluted) | 244.44M262.73M | −7.0% |
05—Questions
Frequently Asked Questions
How much did Lennar's earnings fall in the first quarter of 2026?
Net earnings attributable to Lennar were $229.4 million, or $0.93 per diluted share, compared with $519.5 million, or $1.96 per diluted share, in the first quarter of 2025. Excluding a $14.8 million pretax mark-to-market gain on technology investments, net earnings were $218.0 million, or $0.88 per diluted share.
What drove the decline in gross margin?
The company attributed the decline in homebuilding gross margin on home sales, from 18.7% to 15.2%, primarily to lower revenue per square foot and higher land costs year over year, partially offset by lower construction costs. Management also said the average sales price fell due to pricing to market through increased use of sales incentives.
What is the company's outlook for the second quarter of 2026?
Management expects new orders of 21,000 to 22,000 homes, deliveries of 20,000 to 21,000 homes, an average sales price of $370,000 to $375,000, a gross margin of 15.5% to 16%, and an SG&A percentage of 8.9% to 9.1%. It also stated that margins will remain under pressure in the second quarter.
How strong is Lennar's liquidity and balance sheet?
At February 28, 2026, homebuilding cash and cash equivalents were $2.09 billion and total liquidity was $5.2 billion. Homebuilding senior notes and other debts payable were $4.07 billion, and the company stated it was in compliance with its debt covenants. Homebuilding debt to total capital increased to 15.7% from 8.9% a year earlier, and the company had $1.5 billion remaining under its stock repurchase authorization.
What did the company do with cash during the quarter?
Cash used in operating activities was $434 million, mainly for inventory increases of $652 million and deposits and pre-acquisition costs of $354 million. The company repurchased $270 million of common stock, paid $123 million in dividends, and declared a $0.50 per share quarterly dividend on April 8, 2026, payable May 6, 2026.
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