Highlights

  • Fiscal third quarter revenue was flat at $9.2 billion, while net income fell 12% to $904.9 million.
  • Diluted EPS was $3.20 versus $3.36, and home sales gross margin narrowed to 20.7% from 21.8%.
  • Backlog rose 14% to 15,983 homes and 16% in value to $6.2 billion, while the cancellation rate reached 20%.
  • Management expects sales incentives to remain elevated through the rest of fiscal 2026 and into fiscal 2027.

D.R. Horton (NYSE:DHI) shares were trading near their 52-week low at USD 139.10 on October 21, 2026, down 0.77%. The homebuilder reported fiscal 2026 third quarter results for the period ended June 30 in a filing dated July 23, with flat revenue, lower profit and a larger order backlog.

Based in Arlington, Texas, D.R. Horton is a Delaware corporation that calls itself the largest homebuilding company in the United States by homes closed. It builds and sells homes through operating divisions in 126 markets across 36 states for entry-level, move-up, active adult and luxury buyers. Besides homebuilding, it runs rental operations, financial services including mortgage and title businesses, and owns 62% of the lot developer Forestar Group. The company reports a fiscal year ending September 30, and its shares are also listed on NYSE Texas.

Flat Revenue, Lower Margins in Fiscal Third Quarter

Consolidated revenue for the three months ended June 30, 2026 was $9.2 billion, essentially unchanged from a year earlier. Homebuilding revenue rose 1% to $8.7 billion as homes closed increased 4% to 23,983, while the average closing price fell 2% to $362,000. Pre-tax income declined 10% to $1.2 billion, and the pre-tax margin was 13.3% compared with 14.7%. Net income attributable to D.R. Horton was $904.9 million, down 12%, and diluted EPS was $3.20 compared with $3.36.

Home sales gross margin was 20.7%, down 110 basis points, which the company tied to a higher average cost of homes closed, a lower average selling price and higher incentives, including mortgage rate buydowns. Homebuilding selling, general and administrative expense rose to 8.3% of revenue from 7.8%. Impairment charges were $3.7 million. Management says new home demand continued to be affected by affordability constraints and cautious consumer sentiment.

Elsewhere, rental revenue dropped to $266.1 million from $380.7 million, with single-family rental homes closed at 601 against 1,065. Forestar revenue rose 4% to $407.0 million and its pre-tax income rose 12% to $48.7 million. Financial services pre-tax income fell 14% to $70.3 million. For nine months, revenue declined 4% to $23.7 billion, net income was $2.2 billion, and diluted EPS was $7.45 versus $8.53. Trailing twelve-month return on equity was 12.8%, down from 16.1%.

Orders, Backlog and Balance Sheet

Net sales orders of 23,084 homes, worth $8.4 billion, were roughly level with last year. Cancellations rose to 5,607 homes, a 20% cancellation rate versus 17%. Even so, backlog grew to 15,983 homes valued at $6.2 billion. Homes in inventory totaled 38,000, compared with 29,600 at September 30, 2025, and 126,600 lots were owned versus 147,000.

Cash and equivalents stood at $2.08 billion on June 30, 2026, down from $2.99 billion at fiscal year end, and notes payable rose to $7.11 billion from $5.97 billion. Debt to total capital was 23.0% against 19.8%, and net debt to total capital was 17.4% against 11.0%. Operating activities generated $880.8 million in the nine months, compared with $949.1 million. In March the company raised its homebuilding revolving credit facility to $3.3 billion from $2.3 billion.

Shareholder returns continued. The company repurchased 14.6 million shares for $2.2 billion in the nine months, leaving $1.1 billion of a $5.0 billion authorization. It paid $388.3 million of dividends over the period, and in July its board approved another quarterly dividend of $0.45 per share, payable August 13.

The filing also records $1.1 billion of reserves for legal claims, about 99% tied to construction defect matters, and a $550.7 million warranty liability. The company says it is almost exclusively self-insured for construction defect exposures.

Outlook and Management Priorities

The filing contains no numerical guidance. Management says it expects sales incentives to remain elevated for the rest of fiscal 2026 and into fiscal 2027, and that it will adjust them to market conditions and mortgage rates. It plans to keep managing pricing, sales pace and inventory by community, to favor finished lots from Forestar and other developers, and to hold a significant cash balance while controlling debt.