Categories: Invest

KB Home CEO: ‘we expect an ROE of over 26% this year’

KB Home (NYSE: KBH) on Wednesday said its revenue in the fiscal fourth quarter missed Street estimates. Shares still climbed 5.0% after-hours on better-than-expected earnings, thanks to strong demand that offset supply disruptions.

Q4 results

KB Home said its profit came in at $174.2 million that translates to $1.91 per share. In the same quarter last year, its profit was capped at $106.1 million or $1.11 per share. Operating income jumped 310 basis points to 12.8%.


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The California-based company generated $1.68 billion in total revenue that represents an annualised growth of 40%. According to FactSet, experts had forecast $1.77 of EPS on $1.71 billion in revenue.

Other notable figures

Other notable figures include a 12% year-over-year increase in net order value to $1.77 billion. Ending backlog value and home deliveries were up 67% and 28%, respectively, while the rate of cancellation as a percentage of quarterly gross orders remained unchanged at 13%.

KB Home’s full-year profit and revenue printed at $564.7 million and $5.72 billion, respectively – both above last year’s numbers. In the earnings press release, CEO Jeffrey Mezger said:

Although operating conditions in 2021 were extremely challenging, with labour shortages and supply chain disruptions, along with municipal and related delays, our teams remained resilient in working through solutions with our trade partners and suppliers.

Future outlook

KB Home now forecast its housing revenue to register between $7.2 billion and $7.6 billion this year. Its estimate for average selling price stands at up to $490,000 versus $451,100 in fiscal 2021. Mezger said:

Our nearly $5.0 billion in backlog value and projected substantial year-over-year increase in community count support significant revenue growth this year. Combined with a meaningful acceleration of our operating margin that we anticipate this year, we expect an ROE of over 26%.

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