Lennar Corporation reported fiscal 2025 fourth‑quarter revenue of $9.37 billion and net earnings attributable to Lennar of $490 million, or $2.03 per diluted share. Full‑year revenue totaled $34.2 billion, down 3.4% from $35.4 billion in fiscal 2024, while full‑year net earnings fell to $2.1 billion, or $7.98 per diluted share, a decline of 46% from $3.9 billion, or $14.31 per diluted share, in the prior year. The company beat revenue estimates of $9.13 billion but missed consensus earnings of $2.23 per share, a miss of $0.20 or 9%.
Gross margin on home sales contracted to 17.0% in Q4 2025 from 22.1% in Q4 2024. The compression was driven by higher land costs, a 10% decline in revenue per square foot, and a 14% increase in incentives and price adjustments to defend market share. Construction costs fell, partially offsetting the margin squeeze, but the net effect was a 5.1‑percentage‑point drop in gross margin. The company’s average sales price fell to $386,000 from $430,000 in Q4 2024, reflecting a shift toward lower‑priced, high‑volume homes.
Lennar delivered 23,034 homes and received 20,018 new orders in the quarter, a 4% increase in deliveries and a 3% rise in orders compared with Q4 2024. The construction cycle time averaged 127 days, one day longer than the 126‑day record set in the prior year, while inventory turnover improved to 2.2×, indicating tighter inventory management. The average sales price decline was offset by the volume increase, but the lower ASP contributed to the margin contraction.
Segment performance showed Homebuilding operating earnings of $718 million, up 12% from $638 million in Q4 2024, driven by higher volume and modest price gains. Financial Services operating earnings were $134 million, down 13% from $154 million, reflecting a slowdown in mortgage origination volumes. Multifamily reported an operating loss of $44 million, a slight improvement from a $44 million loss in Q4 2024, while Lennar Other earned $61 million, up 5% from $58 million. The mix shift toward homebuilding and away from financial services contributed to the overall earnings decline.
Management guided for the first quarter of fiscal 2026: deliveries of 17,000 to 18,000 homes, an average sales price of $365,000 to $375,000, and a gross margin of 15% to 16%. Financial Services operating earnings were projected at $105 million to $110 million. The guidance reflects management’s view that affordability and consumer confidence remain constrained, while the company continues to focus on volume preservation and cost control. The lower margin target signals ongoing pressure from land costs and incentives, but the improved construction cycle and inventory turnover suggest operational efficiencies that may help stabilize margins in the medium term.
Investors reacted to the earnings miss and margin compression. The EPS shortfall relative to the $2.23 consensus, combined with the 5‑percentage‑point drop in gross margin, outweighed the revenue beat and led to a negative market reaction. Analysts highlighted the company’s continued reliance on incentives to drive volume and the risk that margin erosion could persist if land costs or interest rates rise further. The guidance, which lowered the margin outlook and maintained a cautious revenue view, reinforced concerns about the sustainability of Lennar’s profitability in a high‑rate environment.
Stuart Miller, Executive Chairman and Co‑CEO, said the company “remains focused on maintaining volume while adapting to a new normal in the housing market.” Jon Jaffe, Co‑CEO and President, noted that the 127‑day construction cycle “enabled more efficient production and improved inventory turnover, supporting both operational efficiency and affordability.”
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