01—Abstract
Summary
Summary of the 8-K filed June 17, 2025. Cited figures are marked; the original filing is the authoritative source.
Lennar Corporation reported results for its second quarter ended May 31, 2025, in a press release furnished as Exhibit 99.1 to this Form 8-K.
Net earnings attributable to Lennar were $477 milliona, or $1.81 per diluted share, compared with $954 million, or $3.45 per diluted share, in the second quarter of 2024. Excluding mark-to-market losses on technology investments, earnings were $499 million, or $1.90 per diluted share. Homebuilding operating earnings fell to $728 million from $1.34 billion a year earlier, as home sales revenue declined 7% to $7.8 billion on a 9% lower average sales price of $389,000.
Gross margin on home sales was 17.8%b (18.0% excluding purchase accounting), down from 22.6% a year earlier, and SG&A rose to 8.8% of home-sales revenues from 7.5%. Demand and volume held up despite softer conditions. New orders increased 6% to 22,601 homes and deliveries increased 2% to 20,131 homes.
Management cited affordability challenges, higher mortgage rates and weaker consumer confidence, and said the company drove volume while incentivizing sales. Year-end inventory was limited to 2,900 homes, and the company reported a 0.1-year supply of owned homesites and 98%c controlled homesites. The balance sheet remained strong by the company's measures.
Lennar issued $700 milliond of 5.20% senior notes due 2030 and used the proceeds primarily to redeem $500 million of 4.75% notes due May 2025. Homebuilding cash fell to $1.2 billion, total liquidity was $5.4 billion, and homebuilding debt to total capital rose to 11.0% from 7.5% at November 30, 2024.
The company repurchased 4.7 million shares for $517 million. For the third quarter, guidance calls for 22,000 to 23,000 new orders and deliveries, an average sales price of $380,000 to $385,000, and a gross margin of approximately 18%.
02—Key points
Key Highlights
- Net earnings attributable to Lennar were $477 million, or $1.81 per diluted share, versus $954 million, or $3.45 per diluted share, a year earlier; excluding mark-to-market losses on technology investments, EPS was $1.90.
- Homebuilding operating earnings were $728 million, down from $1.34 billion in the prior-year quarter.
- Gross margin on home sales was 17.8% (18.0% excluding purchase accounting), compared with 22.6% a year earlier, and SG&A rose to 8.8% of home-sales revenues from 7.5%.
- New orders rose 6% to 22,601 homes and deliveries rose 2% to 20,131 homes; the average sales price fell to $389,000 from $426,000.
- Liquidity was $5.4 billion, and homebuilding debt to total capital rose to 11.0% from 7.5% at November 30, 2024, after $700 million of new senior notes and $517 million of share repurchases.
- Third-quarter 2025 guidance projects 22,000 to 23,000 new orders and deliveries, an average sales price of $380,000 to $385,000, and a gross margin of approximately 18%.
- The company ended the quarter with 2,900 homes of inventory, described as fewer than two completed, unsold homes per community.
03—Questions
Frequently Asked Questions
Why did earnings decline so sharply year over year?
The filing attributes the decline mainly to lower home-sales revenue from a 9% decrease in the average sales price of homes delivered, along with lower gross margin driven by higher land costs and lower revenue per square foot. SG&A also rose to 8.8% of home-sales revenues, reflecting less leverage and higher marketing and selling expenses.
Did Lennar's sales volume hold up?
Yes, according to the filing. New orders increased 6% to 22,601 homes and deliveries increased 2% to 20,131 homes, but management noted that sales were supported by incentives and that the average sales price, net of incentives, declined to $389,000.
How did the company's balance sheet and capital allocation change?
Lennar issued $700 million of 5.20% senior notes due 2030, primarily to repay $500 million of 4.75% notes due May 2025. It repurchased 4.7 million shares for $517 million at an average price of $109.79. Homebuilding debt to total capital rose to 11.0% from 7.5% at November 30, 2024, and total liquidity was $5.4 billion.
What guidance did management provide for the third quarter of 2025?
Management expects new orders and deliveries of 22,000 to 23,000 homes each, an average sales price of $380,000 to $385,000, a gross margin on home sales of approximately 18%, SG&A of 8.0% to 8.2% of home sales, and Financial Services operating earnings of $175 million to $180 million, all depending on market conditions.
What did the filing say about the broader housing market?
Management said it continues to see softness in the housing market due to affordability challenges and declining consumer confidence, and that mortgage interest rates remained higher. The company said it is focused on matching production pace with sales pace and on efficiencies such as a 132-day cycle time, 12% lower than last year.
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