Shares of Lennar Corporation (NYSE:LEN) fell more than 2% in premarket trading after the U.S. homebuilder posted fourth-quarter earnings that came in below market expectations, overshadowing a revenue performance that exceeded forecasts in a difficult housing environment.
For the quarter, Lennar reported adjusted earnings of $2.03 per share, missing the analyst consensus estimate of $2.21. Revenue reached $9.4 billion, topping expectations of $9.01 billion. Home deliveries totaled 23,034 units, up 4% from a year earlier, while new orders climbed 18% to 20,018 homes. However, the average selling price declined 10% year-on-year to $386,000, reflecting heavier use of buyer incentives amid ongoing affordability pressures.
Gross margin on home sales fell sharply to 17.0%, down from 22.1% in the same quarter last year. The decline was driven by lower revenue per square foot, rising land costs and continued incentives averaging around 14%.
“Even as interest rates moved slightly lower in our fourth quarter, the overall market remained challenged,” said Stuart Miller, Executive Chairman and Co-Chief Executive Officer, in a statement. “Despite the added pressure of a six-week government shutdown, we continued to build and sell homes, adapting as needed to changing market conditions.”
Looking ahead, Lennar expects to deliver between 17,000 and 18,000 homes in the first quarter of fiscal 2026, with average selling prices ranging from $365,000 to $375,000. Gross margins are forecast to fall to between 15% and 16%, reflecting typical seasonal trends and prevailing market dynamics.
“Sentiment was fairly negative with expectations low heading into the print, but we still view the Q1 guide as disappointing. It also shows the profitability trade-off needed to sell homes in the current backdrop,” analysts at Oppenheimer including Tyler Batory said in a note.
For the full 2025 fiscal year, Lennar delivered 82,583 homes, representing a 3% increase year-on-year, and generated total revenue of $34.2 billion.
“Although the current market presents short-term challenges, we are highly confident that our strong market position and disciplined operating strategy will set us up for long-term success,” Miller added.