D.R. Horton (DHI) reported a challenging Q2 FY2026 with revenue declining 2.3% YoY to $7.56B and net income falling 20.1% YoY to $647.9M, reflecting margin compression as cost of revenue held nearly flat while sales softened.
Key risk: Margin Erosion from Cost Stickiness
Cost of revenue grew 0.4% YoY even as revenue declined 2.3%, compressing gross margins. If land, labor, and material costs remain elevated while home prices or volumes soften further, profitability could deteriorate meaningfully.
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