Sep 17, 2026 earnings call — Maintaining volume while converting expensive land
Lennar delivered 20,840 homes this quarter and reported gross margin of 15.8%.
Revenue $8.0B (est $8.3B) · EPS $1.23 (est $1.28)
Key quotes
"So when we accept a 15.8% margin rather than holding out for something better, we are buying 2 things."
"So in summary, interest rates moved up, inflation is driving rates up and consumer confidence down, the Fed is focused on data, the resale supply is competing harder."
"Our record cycle time of 116 days is down from 121 days last quarter and 126 days a year ago."
Analyst Q&A 5
Inventory turns and cash uses
Q (Susan Maklari · Goldman Sachs): Analyst asked where inventory turns can go over time and how that helps balance land bank and rebuild pipeline. She also asked what cash level the company is comfortable holding and how cash will be used, including buybacks.
A: Management said inventory turns have stayed in the same general range and could rise only if market conditions improve significantly. On cash, they said they keep a healthy cash balance to smooth quarter-to-quarter volatility, use capital for debt reduction, buybacks and dividends, and have a $3.1 billion credit facility for flexibility. They also said they are opportunistic with buybacks as the stock price falls.
"We maintain a healthy cash position in order to even out the peaks and valleys." — Stuart Miller (CEO·CHAIR)
Labor constraints and SG&A tech spending
Q (Trevor Allinson · Wolfe): Analyst asked whether labor limits will hurt the company’s ability to keep cutting costs and where labor pressure is occurring. He also asked how far along the company is in tech investments and when those will start reducing SG&A.
A: Management said labor pressure is very geography specific, and their scale and trade relationships let them do better than peers. They said about 20% of divisions see greater pressure now, and trade partners help allocate crews and absorb some cost. On SG&A tech investments, they said some projects were false starts while others are core, costs are being reduced slowly, and they expect normalization through 2027.
"I'd say roughly 20% of our divisions right now are seeing greater pressure than the vast majority." — David Grove
Incentives, margins and market view
Q (John Lovallo · UBS): Analyst asked what level of incentives, land cost and stick-and-brick are assumed given higher deliveries, and whether management sees further deterioration or early stabilization in the housing market.
A: Management said they are not seeing a big change in incentives now and that getting pricing right can reduce incentives. They cautioned the market can shift and they remain conservative; the affordable segment they operate in is more rate-sensitive and the cost of their buydown is rising, so experiences differ by product and price point.
"The cost of our buydown is becoming more expensive." — Stuart Miller (CEO·CHAIR)
Rising inventory value and paused land deals
Q (Stephen Kim · Evercore): Analyst asked why finished homes and construction-in-process value rose as a percent of ASP and whether that inventory line should drop in 4Q to drive cash flow. He also asked how many land takedowns were paused and the impact of a 6-month extension.
A: Management said higher reported inventory value reflects land deals negotiated earlier at higher prices and longer option fees because they moderated growth. They expect inventory to drop and cash flow to be stronger in 4Q, but cash depends on volume and market volatility. They said they do not have the percentage of paused takedowns offhand and are reworking each deal to include real-time option fees and capital cost in negotiations.
"I don't have an answer on the percentage where we have paused." — Stuart Miller (CEO·CHAIR)
Mortgage buydown cost and resale competition
Q (Jay McCanless · Citizens Bank): Analyst asked if the company can quantify how much mortgage buydowns are costing and what they have seen so far in September. He also asked whether the resale supply pressure in Texas and Florida is broad or concentrated where the company operates.
A: Management said buydown cost is hard to quantify because it depends on many variables: fixed vs ARM, government vs conventional, ARM term, and starting rate. On resale competition, they said resales have become more active in some markets, resales lowering price fuels more activity, and that can also unlock buyers for new homes so it is not always negative.
"It depends on whether it's a fixed loan or an ARM." — Diane Bessette (CFO)