Highlights

  • Third quarter net earnings were $283.9 million, or $1.19 per diluted share, against $591.0 million, or $2.29, a year earlier.
  • Home sales revenue fell 6% to $7.7 billion, and gross margin on home sales narrowed to 15.8% from 17.5%.
  • New orders totaled 20,879 homes, down from 23,004, while backlog stood at 16,857 homes valued at $6.3 billion.
  • Management guided fourth quarter deliveries of 22,000 to 23,000 homes and a gross margin of 15.5% to 16.0%.

Lennar Corporation (NYSE:LEN) shares were trading near their 52-week low at USD 78.19 on October 21, 2026, down 0.58%. The Miami-based homebuilder filed its quarterly report for the period ended August 31, 2026 on October 2, repurchased stock during the nine months, declared a $0.50 quarterly dividend and issued fourth quarter guidance.

Lennar is a Delaware corporation headquartered in Miami, Florida, and its Class A and Class B common stock trade on the New York Stock Exchange. It reports four Homebuilding segments, East, Central, South Central and West, plus Financial Services, Multifamily and Lennar Other. The company describes an asset-light, land-light model: it owns about 2% of its homesites and controls most of the rest through third parties. Its fiscal year ends November 30.

Earnings Lower as Margin and Order Volume Narrow

Revenue for the third quarter ended August 31, 2026 was $8.05 billion, against $8.81 billion a year earlier. Home sales revenue fell 6% to $7.7 billion, because the average sales price slipped 3% to $372,000 and deliveries dropped 3% to 20,840 homes.

Gross margin on home sales was $1.2 billion, or 15.8%, compared with 17.5%, which the company attributed to lower revenue per square foot and higher land costs, partly offset by lower construction costs. Selling, general and administrative expenses rose to 9.2% of home sales revenue from 8.2%. Net earnings attributable to Lennar were $283.9 million, or $1.19 per diluted share. Excluding $53.3 million of mark-to-market losses on technology investments and a $39.2 million net one-time benefit in Financial Services, net earnings were $294.3 million, or $1.23 per share, a non-GAAP measure.

New orders fell to 20,879 homes from 23,004, just below the company's guided range, and the cancellation rate was 15% versus 14%. Backlog ended the quarter at 16,857 homes worth $6.3 billion, compared with 16,953 homes worth $6.6 billion a year earlier. Incentives per home delivered declined to $51,000 from $64,100, and cycle time reached a record low of 116 days.

The other segments were mixed. Financial Services posted operating earnings of $129.5 million, down from $177.4 million, with the current quarter including a litigation accrual reversal tied to a court judgment. Lennar Other recorded an operating loss of $83.6 million against earnings of $62.5 million. For nine months, community valuation adjustments totaled about $100 million across 38 communities, up from about $26 million.

Liquidity, Debt and Capital Returns

Lennar ended the quarter with $1.2 billion of homebuilding cash and total liquidity of $3.6 billion. Homebuilding debt was $4.3 billion, including $650 million drawn on its unsecured revolving credit facility and about $1.7 billion under a delayed draw term loan due 2028. Homebuilding debt to total capital was 16.6%, and net homebuilding debt to total capital, a non-GAAP measure, was 12.7%.

Cash used in operating activities was $822 million for the nine months, versus $1.5 billion a year earlier. Lennar repurchased $993 million of its common stock over the period, including $950 million under its repurchase program, and paid $366 million in dividends. On September 23, 2026, the board declared a quarterly dividend of $0.50 per share on both share classes, payable October 22, 2026.

Fourth Quarter 2026 Outlook

Management described a macro backdrop that grew more difficult during the quarter. It cited a 30-year mortgage rate near 7%, a 10-year Treasury yield near 5%, rising resale inventory in Texas and Florida, tighter labor in some regions and higher land costs per home, which it expects to affect margin for a period.

For the fourth quarter of 2026, the company expects new orders of 19,500 to 20,500 homes and deliveries of 22,000 to 23,000 homes at an average sales price of $370,000 to $380,000. It expects gross margin of 15.5% to 16.0% and an SG&A ratio of 8.7% to 9.0%. The filing says these expectations depend on market conditions.