Lennar reports Q2 EPS $1.90, consensus $1.94

Reports Q2 revenue $8.38B, consensus $8.19B. New orders increased 6% to 22,601 homes. Backlog of 15,538 homes with a dollar value of $6.5 billion. Deliveries increased 2% to 20,131 homes. Stuart Miller, Executive Chairman and Co-Chief Executive Officer of Lennar (LEN), said, “While we continue to see softness in the housing market due to affordability challenges and a decline in consumer confidence, we adhered to our strategy of driving starts, sales, and closings in order to build long-term efficiencies in our business. During the quarter, we drove new orders to 22,601 homes, within our guidance, and delivered 20,131 homes, also within our guidance, as we continued to focus on matching production pace with sales pace. Accordingly, we ended the quarter with limited inventory of 2,900 homes, which is fewer than two completed, unsold homes per community, and continues to be within our historical range. Reflecting softer market conditions, our average sales price, net of incentives, declined to $389,000. As mortgage interest rates remained higher and consumer confidence continued to weaken, we drove volume with starts while incentivizing sales to enable affordability and help consumers to purchase homes. Additionally, our gross margin was 18.0% excluding purchase accounting, which met guidance, and our SG&A expenses ran higher at 8.8%, reflecting further investment and engagement in future efficiencies.”