01—Abstract
Summary
Summary of the 10-Q filed June 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation's 10-Q for the quarter ended May 31, 2026 shows a year-over-year decline in profitability.
Net earnings attributable to Lennar were $304.8 milliona, or $1.24 per diluted share, for the second quarter of 2026, versus $477.4 million, or $1.81 per share, in the second quarter of 2025. For the six months, net earnings attributable to Lennar were $534.2 million ($2.17 per share) versus $997.0 million ($3.77 per share). Homebuilding revenues from home sales fell 2% in the quarter to $7.6 billion, as the average sales price of homes delivered decreased to $371,000 from $389,000 and gross margin on home sales narrowed to 15.6% from 17.8%.
Management said margins remain under pressure but noted that sales incentives declined meaningfully on deliveries this quarter and expects sequential margin improvement to continue as the year progresses. Liquidity remained substantial. Cash and cash equivalents and restricted cash totaled $2.2 billionb at May 31, 2026, down from $3.8 billion at November 30, 2025, and homebuilding cash was $1.8 billion, with total liquidity of $4.9 billion.
Cash used in operating activities was $718 millionc for the six months, reflecting inventory growth and deposits on land. Homebuilding debt to total capital rose to 15.8% from 15.7% at November 30, 2025, and net homebuilding debt to total capital rose to 9.4% from 2.8%. The company repurchased $737 million of common stock and paid $247 million in dividends during the six months, and it declared a $0.50 quarterly dividend on June 25, 2026.
For the third quarter of 2026, Lennar expects new orders of 21,000 to 22,000 homes, deliveries of 20,500 to 21,500 homes at an average sales price of $375,000 to $380,000,d gross margin of approximately 16%, and an SG&A percentage of 8.8% to 9.0%. The full-year delivery guidance was adjusted to 82,000 to 83,000 homes, which the company attributed to current pressures on interest rates and continued macro uncertainty.
02—Key points
Key Highlights
- Q2 2026 net earnings attributable to Lennar were $304.8 million, or $1.24 per diluted share, down from $477.4 million, or $1.81 per diluted share, in Q2 2025.
- Excluding pretax mark-to-market losses of $23.3 million on technology investments, Q2 2026 net earnings attributable to Lennar were $322.1 million, or $1.31 per diluted share.
- Gross margin on home sales was 15.6% in Q2 2026 versus 17.8% in Q2 2025, and the average sales price of homes delivered fell to $371,000 from $389,000.
- Homebuilding deliveries were 20,519 homes in Q2 2026 versus 20,131 in Q2 2025; new orders were 21,749 homes versus 22,601 a year earlier.
- Total liquidity was $4.9 billion at May 31, 2026, including $1.8 billion of homebuilding cash and cash equivalents; net homebuilding debt to total capital rose to 9.4% from 2.8% at November 30, 2025.
- The company repurchased $737 million of common stock in the first six months of 2026, leaving $1.0 billion of remaining repurchase authorization, and declared a $0.50 quarterly dividend on June 25, 2026.
- Full-year 2026 homebuilding delivery guidance was lowered to 82,000 to 83,000 homes, while Q3 2026 gross margin is expected to be approximately 16%.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed June 29, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $7.94B$8.38B | −5.2% |
| SG&A Expenses | $698.39M$688.85M | +1.4% |
| Operating Expenses | $7.54B$7.75B | −2.7% |
| Net Income | $304.77M$477.45M | −36.2% |
| EPS (Basic) | $1.24$1.81 | −31.5% |
| EPS (Diluted) | $1.24$1.81 | −31.5% |
| Shares Outstanding (Basic) | 240.78M260.29M | −7.5% |
| Shares Outstanding (Diluted) | 240.78M260.29M | −7.5% |
05—Questions
Frequently Asked Questions
How did Lennar's earnings and margins change in the second quarter of 2026?
Net earnings attributable to Lennar fell to $304.8 million, or $1.24 per diluted share, from $477.4 million, or $1.81 per share, a year earlier. Gross margin on home sales decreased to 15.6% from 17.8%, primarily due to lower revenue per square foot and higher land costs, partially offset by lower construction costs. SG&A as a percentage of home sales revenue rose to 9.2% from 8.8%.
What is management's outlook for the third quarter and full year 2026?
For Q3 2026, Lennar expects new orders of 21,000 to 22,000 homes, deliveries of 20,500 to 21,500 homes at an average sales price of $375,000 to $380,000, gross margin of approximately 16%, and SG&A of 8.8% to 9.0% of revenue. Full-year delivery guidance was adjusted to 82,000 to 83,000 homes, reflecting current interest rate pressures and macro uncertainty. Management said it expects sequential margin improvement to continue as the year progresses.
How strong is Lennar's liquidity and balance sheet?
At May 31, 2026, cash and cash equivalents and restricted cash totaled $2.2 billion, down from $3.8 billion at November 30, 2025. Homebuilding cash was $1.8 billion, and total liquidity was $4.9 billion. Homebuilding debt was $4.05 billion, and the company stated it was in compliance with its debt covenants as of May 31, 2026.
Why did cash decline and how much did the company return to shareholders?
Cash used in operating activities was $718 million for the six months, driven mainly by a $1.1 billion increase in inventories and a $555 million increase in deposits and pre-acquisition costs on real estate. During the same period, the company repurchased $737 million of common stock and paid $247 million in dividends, partially offset by $173 million of net borrowings under Financial Services warehouse facilities.
What did the company say about incentives and demand?
Management said it saw a meaningful decline in sales incentives on deliveries in the quarter after three years of generally rising incentive levels, which it described as possibly a leading indicator of margin recovery. However, it noted the market remains choppy, mortgage rates stayed in the mid-to-upper 6% range, and buyer traffic has been inconsistent. Average sales incentives per home delivered were $55,200 in Q2 2026 versus $59,500 in Q2 2025.
06—Continue