D.R. Horton Inc. (DHI)

D.R. Horton reported on 29 October 2026 that net income attributable to the company for fiscal 2026 fell 19 percent to $2.9 billion, or $10.11 per diluted share, on revenues of $33.0 billion 1. The fourth quarter was weaker, with net income down 18 percent to $741.8 million and net sales orders down 7 percent to 18,619 homes 1.

Executive Chairman David Auld said housing conditions became more challenging as rising mortgage rates, affordability limits and cautious consumer sentiment pressured demand, and that the company adjusted incentives, pricing and starts community by community 1. The company expects incentives to remain elevated in fiscal 2027 1.

For fiscal 2027 the company guided to revenues of $30.0 billion to $32.0 billion and 79,000 to 84,000 homes closed 1. Its Board raised the quarterly dividend 11 percent to $0.50 per share, and on 15 September 2026 it approved another $5.0 billion of share repurchases 13.

The open question is how long higher incentives keep margins lower: pre-tax profit margin was 10.8 percent in the fourth quarter and 11.8 percent for the year 1. On 22 October 2026 the Board also added Carl Reichardt as an independent director, bringing it to nine members 2.

D.R. Horton began building homes in 1978 in Fort Worth, Texas, and its stock has traded publicly since 1992 4. It has been the largest US homebuilder by homes closed every year since 2002, and has closed more than 1.2 million homes in its 47-year history 4.

It grew by putting money and local teams into existing markets, opening new ones and buying other homebuilders, whose staff already knew local officials, landowners and subcontractors 4. Buying a builder also brings ready-made land, homes under construction and rights to buy more lots 4.

Two side businesses were added to the core 8. In fiscal 2018 it bought 75 percent of Forestar, a lot developer, and in fiscal 2020 it began building single-family homes to lease and then sell in bulk 8. Both aim to secure land supply and spread risk 8.

Fiscal 2021 was the surge year 8. Homes closed rose 25 percent to 81,965 and home sales revenue rose 35 percent to $26.5 billion, mostly because more homes closed and partly because prices rose 8. Gross margin on home sales climbed to 25.5 percent from 21.8 percent 8.

In fiscal 2022 growth came from price, not volume 9. Homes closed rose only 1 percent to 82,744, yet the average closing price rose 19 percent to $385,100 and gross margin reached 28.7 percent 9. Demand began moderating in June 2022 as mortgage interest rates rose substantially, and incentives increased in the fourth quarter 9.

Fiscal 2023 turned the margin around: the average selling price fell 1 percent to $381,600 while the cost of homes closed rose, and gross margin dropped to 23.5 percent from 28.7 percent 10. Homes closed were nearly unchanged at 82,917 10.

Fiscal 2024 was the revenue peak: consolidated revenues were $36.8 billion, with 89,690 homes closed 4. Fiscal 2025 reversed part of it 4. Consolidated revenues fell 7 percent to $34.3 billion, closings fell 5 percent to 84,863 and the average selling price slipped 2 percent 4.

Profit fell faster than revenue in fiscal 2025 4. Pre-tax income dropped 25 percent to $4.7 billion and gross margin fell to 21.5 percent, partly because the average cost of homes closed rose while the selling price fell 4. The company also repurchased 30.7 million shares for $4.3 billion that year 4.

Fiscal 2026 extended the slowdown 1. Revenues fell to $33.0 billion and closings to 84,202, with the company citing mortgage rates and affordability 1. In October 2025 it bought the homebuilding operations of SK Builders near Greenville, South Carolina, for about $80 million in cash 5.

Homebuilding

Homebuilding is the core business: it builds and sells houses, mostly single-family detached, to first-time and move-up buyers, plus entry-level, active adult and luxury buyers 4. In fiscal 2026 it closed 84,202 homes for $30.6 billion of home sales revenue 1.

The company says its sales prices generally range from $200,000 to $700,000, and it says about 43,500 of its fiscal 2026 buyers were first-time homebuyers 1. Homebuilding pre-tax profit margin was 11.2 percent for the year and the cancellation rate was 19 percent 1.

Homebuilding made up 92 percent of consolidated revenues in fiscal 2025, and about 84 percent of its home sales revenue came from detached houses 4. At fiscal year end 2026 it held 28,200 homes in inventory, of which 17,700 were unsold and 8,800 of those completed 1.

Most homes are built by subcontractors under fixed-price contracts, and construction of most homes took two to four months in fiscal 2025 4. The company runs 92 local operating divisions that choose sites, set prices and manage building 4.

Rental

The rental segment builds single-family build-to-rent communities and apartment communities, then sells them to investors, either home by home, in bulk or as finished properties 5. In fiscal 2026 it sold 2,073 single-family rental homes for $560.0 million and 2,737 apartment units for $666.5 million 1.

Rental revenues were $1.2 billion for the year but pre-tax income was only $18.2 million after $91.4 million of inventory impairment charges on nine multi-family projects in the fourth quarter 1. Multi-family rental inventory stood at $2.3 billion at year end 1.

Forestar

Forestar buys raw land and turns it into finished residential lots 5. D.R. Horton owned 62 percent of its shares at 30 June 2026, and Forestar operated in 65 markets across 24 states 5. This is an ownership stake, with Forestar fully consolidated in D.R. Horton's results 5.

In fiscal 2026 Forestar sold 13,545 lots for $1.6 billion of revenue and $192.1 million of pre-tax income 1. In fiscal 2025, 83 percent of the lots it sold went to D.R. Horton under a master supply agreement 4.

Financial services

DHI Mortgage, a wholly owned subsidiary, arranged mortgage financing for 81 percent of the homes the homebuilding side closed in fiscal 2025, and sells substantially all its loans to outside buyers after origination 4. Title companies issue title insurance and handle closings 4.

Financial services revenue was $817.3 million in fiscal 2026 with $258.1 million of pre-tax income, a 31.6 percent margin 1. In May 2026 DHI Mortgage raised its loan funding facility with U.S. Bank and other buyers to $1.925 billion, extended to 2029 12.

Land, offices and workforce

The company owns office buildings totaling about 2.1 million square feet and leases about 760,000 square feet more 4. It also owns 94,200 acres of ranch land, most held for over 20 years, used for ranching and company events 4.

It employed 14,341 people at 30 September 2025, of whom 9,972 worked in homebuilding and 2,967 in financial services 4. The release says it operates in 128 markets in 38 states 1.

People in charge

Paul Romanowski has been President and Chief Executive Officer since October 2023 and joined the company in 1999 7. David Auld is Executive Chairman and Bill Wheat is Executive Vice President and Chief Financial Officer 73.

Rivals

NAHB, using Builder magazine data, ranked D.R. Horton first for 2025 with 87,168 closings and 12.8 percent of the for-sale market, its 24th year atop the list 13. Lennar was second at 12.2 percent, PulteGroup 4.4 percent, NVR 3.2 percent and Meritage Homes 2.2 percent 13.

Current problems

The filings name three legal matters 4. They are a Maryland stormwater suit filed in September 2024, an April 2025 shareholder suit over lot sales between Forestar and D.R. Horton, and a 2024 EPA consent decree with a $400,000 penalty 4. The company says it does not expect a material effect from them 4.

Its risk factors also name tariffs on imported materials such as steel, aluminum and lumber, which could raise building costs 4.

The umbrella, in words

Most homes are sold under the D.R. Horton name 4. Exhibit 21.1 also lists the trade names Emerald Homes, Express Homes and Freedom Homes among its subsidiaries' doing-business-as names 6. In its fiscal 2021 annual report the company described Express as entry-level, Emerald as higher-end and Freedom as active adult 8.

Subsidiaries named in Exhibit 21.1 include DHI Mortgage Company, Ltd., D.R. Horton Insurance Agency, Inc. and DRH Rental, Inc., which house the mortgage, insurance and rental businesses 6. The exhibit lists hundreds of entities, so this is a selection 6.

The company owns 62 percent of Forestar, a publicly traded lot developer, as of 30 June 2026, and owns water rights and ranch land through other subsidiaries 54. In October 2025 it bought the homebuilding operations of SK Builders for about $80 million in cash 5.

On control, the proxy statement lists holders of more than 5 percent from Schedule 13G filings as of 1 December 2025 7. They were Vanguard 11.97 percent, Capital World Investors 10.46 percent, BlackRock 9.76 percent and the Horton Family Limited Partnership 6.91 percent 7. Directors and executive officers as a group held 0.66 percent 7.

The company's fiscal 2027 guidance, given on 29 October 2026, calls for consolidated revenues of $30.0 billion to $32.0 billion and 79,000 to 84,000 homes closed by homebuilding 1. It also expects an income tax rate of about 25.5 percent 1.

It expects cash flow from operations of about $3.5 billion, share repurchases of about $3.0 billion and dividend payments of about $500 million in fiscal 2027 1. A first-quarter fiscal 2027 outlook was to follow on its conference call that day 1.

The next quarterly dividend of $0.50 per share is payable on 19 November 2026 to holders of record on 12 November 2026 1. The remaining repurchase authorization was $4.7 billion at 30 September 2026 1.

Results dates for fiscal 2027 are Tuesday 19 January 2027, Tuesday 20 April 2027, Thursday 22 July 2027 and Tuesday 26 October 2027 for the fourth quarter and year 1. The annual meeting of stockholders is set for 14 January 2027 2.

On debt, the company repaid $600 million of 1.3 percent senior notes at maturity in October 2026 and said it has no other senior note maturities in fiscal 2027 1. In March 2026 its revolving credit commitment was raised to $3.295 billion across tranches maturing from 2027 to 2031 11.

The Board will consider committee appointments for its newest director, Carl Reichardt, after the annual meeting 2. Mr Reichardt will receive annual cash fees of $80,000 and restricted stock units with a grant date value of $235,000 each year, according to the filing 2.

Executive Chairman David Auld said the company will keep focusing on delivering value to homebuyers, gaining market share and generating returns for shareholders over the long term 1. The company also expects incentives to remain elevated in fiscal 2027 1.

Management also said it expects to keep growing the dividend, calling fiscal 2027 its thirteenth consecutive year of dividend growth, and to keep focusing on market share and returns 1. The Forestar derivative suit and the Maryland stormwater suit remain open matters in the annual report 4.