KB Home Inc. on Wednesday night beat Wall Street expectations for its second quarter, but said its pace of selling slowed as buyers faced higher mortgage interest rates and inflation .
The KBH house builder,
said it earned $211 million, or $2.32 per share, in the quarter, compared with $143 million, or $1.50 per share, in the year-ago quarter.
Revenue rose 19% to $1.72 billion as the average selling price of its new homes rose 21% year-on-year to $494,300, the company said.
The FactSet consensus was calling for earnings of $2.04 a share on sales of $1.65 billion. The stock rose more than 3% in Wednesday’s extended session, after ending the regular trading day up 2.4%.
“Selling rates are moderating from exceptional levels the industry has seen as buyers process the impact of rising mortgage interest rates, as well as inflationary pressures,” said chief executive Jeffrey Mezger in a statement.
KB Home‘s flexible “build-to-order” model, with multiple floor plans and price points to choose from, will help it navigate “changing market conditions”, he said.
The company also vowed to remain “strategic” in allocating its capital and said it owned or controlled all the lots it needed to support new home delivery targets through 2024.
“As a result, we are in a favorable position to calibrate our land investments according to changing conditions, without compromising our medium-term growth, providing us with opportunities to redeploy capital to shareholders,” Mezger said.
KB Home guided housing revenue between $7.3 billion and $7.5 billion in fiscal 2022, with the average sale price reaching around $500,000.