AI Takeaway
Lennar's Q1 FY2026 results showed significant pressure with revenue declining 13.3% YoY to $6.62B and net income falling 55.8% to $229M, reflecting a challenging homebuilding environment with negative operating cash flow of -$433.5M.
Revenue
$6.62B
-13.26% YoY
EPS (Basic)
$0.93
-52.55% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue fell 13.3% YoY from $7.63B to $6.62B in Q1 FY2026, suggesting a combination of fewer home deliveries and/or lower average selling prices as the housing market faces affordability headwinds from elevated mortgage rates.
Source: Source: 10-Q Income Statement, XBRL Financial Data
Net margin contracted sharply to 3.5% in Q1 FY2026 compared to an implied ~6.8% in the prior year period, as net income dropped 55.8% to $229.4M while revenue declined only 13.3%, indicating meaningful cost pressures or incentive spending outpacing revenue declines.
Source: Source: 10-Q Income Statement, XBRL Financial Data
SG&A expenses were essentially flat at $617.5M (+0.3% YoY) despite a 13.3% revenue decline, meaning SG&A as a percentage of revenue increased materially, adding to margin pressure and reflecting the fixed-cost nature of the homebuilding business.
Source: Source: 10-Q Income Statement, XBRL Financial Data
2 more insights available
Upgrade to unlockLennar's business is highly sensitive to mortgage interest rates, which remain elevated and compress homebuyer affordability. The 13.3% revenue decline in Q1 FY2026 suggests demand softness that could persist if rates remain high, directly impacting closings and average selling prices.
Source: Source: 10-Q Income Statement, XBRL Financial Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $0.93 versus the $0.97 analyst consensus — a -3.9% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $6.62B | $7.63B | -13.26% |
Net Income | $229.38M | $519.53M | -55.85% |
EPS (Basic) | $0.93 | $1.96 | -52.55% |
EPS (Diluted) | $0.93 | $1.96 | -52.55% |
SG&A Expense | $617.5M | $615.74M | +0.29% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $33.21B | $34.99B | -5.08% |
Total Liabilities | $11.18B | $12.12B | -7.76% |
Stockholders' Equity | $21.88B | $22.73B | -3.73% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $-433.5M | $-289.04M | -49.98% |
Investing Cash Flow | $93.36M | $21.49M | +334.44% |
Financing Cash Flow | $-1.1B | $-2.13B | +48.67% |
Share Buybacks | $269.71M | $774.48M | -65.18% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Margin | 3.5% | — | — |
ROE | 1.0% | — | — |
ROA | 0.7% | — | — |
Debt to Equity | $0.511 | — | — |
LEN's Q2 FY2026 results show a decline in revenue and net income, with significant challenges in maintaining profitability amid increased liabilities and reduced equity.
Lennar's FY2025 results showed significant pressure with revenue declining 3.5% to $34.2B and net income nearly halving to $2.1B, driven by margin compression and a sharp 91% drop in operating cash flow, even as the company continued returning capital through $1.8B in share buybacks.
Other companies in Homebuilding
Lennar reported Q1 FY2026 revenue of $6.62B, down 13.3% YoY, and net income of $229.4M, down 55.8% YoY. EPS came in at $0.93 basic and diluted, compared to $1.96 in the prior year period, reflecting significant margin compression and a softer housing demand environment.
Lennar's net income fell 55.8% to $229.4M in Q1 FY2026, driven by a 13.3% revenue decline combined with flat SG&A expenses of $617.5M, which caused significant operating deleverage. Net margin compressed to just 3.5% from approximately 6.8% in the prior year, likely reflecting elevated buyer incentives such as mortgage rate buydowns used to stimulate demand.
Lennar maintains a solid balance sheet with $21.9B in stockholders' equity and a debt-to-equity ratio of 0.51x, which improved YoY as total liabilities declined 7.8% to $11.18B. However, operating cash flow was negative at -$433.5M, worsening 50% YoY, which warrants monitoring as it reflects ongoing cash consumption from the business in the near term.
Yes, Lennar significantly reduced share buybacks to $269.7M in Q1 FY2026, a 65.2% decline from $774.5M in the prior year period. This suggests management is conserving capital amid weaker earnings and negative operating cash flow, prioritizing balance sheet strength over shareholder returns.
The key risks include sustained high mortgage rates that compress homebuyer affordability, continued margin erosion from buyer incentives, and worsening operating cash flow (-$433.5M in Q1 FY2026). Additionally, flat SG&A costs of $617.5M against declining revenue create significant fixed-cost leverage risk if housing demand does not recover.