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PulteGroup reported third-quarter revenue of $4.0 billion, below the $4.1 billion consensus and down from $4.4 billion a year earlier. Adjusted earnings per share of $2.53 also missed the $2.63 consensus; diluted earnings per share were $2.96 a year earlier.
The company said home-sale revenue declined as closings fell to 6,876 homes and the average selling price decreased. In its filing, PulteGroup attributed the lower closing volume primarily to more challenging demand conditions, partly offset by a higher community count and shorter production cycles. Net new orders fell to 6,208 homes, while the company ended the quarter with a backlog of 10,298 homes valued at $6.4 billion.
PulteGroup reported a home-sale gross margin of 24.8%, down from a year earlier. Its filing attributed the decline primarily to pricing actions, including elevated incentives, and higher land acquisition and development costs. Free cash flow fell to $527.8 million from $653.9 million a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $4.0 billion | $4.4 billion | −9.78% |
| Diluted EPS | $2.53 | $2.96 | −14.5% |
| Gross margin | 25.3% | 26.4% | −1.1 percentage points |
| Operating margin | 15.8% | 17.4% | −1.6 percentage points |
| Free cash flow | $527.8 million | $653.9 million | −19.3% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.53 | $2.63 | Missed by 3.80% |
| Revenue | $4.0 billion | $4.1 billion | Missed by 3.85% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Ryan Marshall said home-buying demand slowed as interest rates rose during the quarter. He said more consumers paused their searches, with most of the missing traffic coming from first-time buyers. Conversion rates among visitors remained comparable to earlier in the year, but traffic to communities fell both from a year earlier and from the preceding quarter. Marshall said buyers were taking more time to consider monthly payments and financing, while selling an existing home remained an obstacle.
CFO James Ossowski said fewer sales of spec homes—homes built before a buyer is secured—reduced closings. Marshall said PulteGroup was focusing on core demand rather than pursuing volume through additional price cuts. Asked about incentives, he said “we are seeing inelasticity in price right now”: further discounts do not necessarily generate enough additional sales to justify them. He also said fewer spec sales helped margins but reduced volume, and that the fourth-quarter margin guide includes expected discounts on spec inventory.
Ossowski said slower sales meant some communities were taking longer to close out, leaving staffing and other costs in place for longer. He said the company expected construction costs to decline by low single digits from a year earlier in the fourth quarter. Marshall said PulteGroup was working toward a greater mix of homes sold before construction, which generally carry higher margins than spec homes.
On investment, Ossowski said PulteGroup walked away from options on approximately 8,000 lots during the third quarter as some transactions no longer met its return thresholds. Marshall said the company was prepared to reduce land spending in 2027 if conditions warranted. For the coming quarter, Ossowski said the closing forecast still required PulteGroup to sell and close a number of spec homes, so it would assess demand and take steps to convert inventory into closings.
Guidance
PulteGroup lowered its full-year 2026 closing forecast to 27,000–27,500 homes from 28,500–29,000. Ossowski also raised the expected full-year SG&A expense to 10.3%–10.5% of home-sale revenue, from 9.50%–9.70%, citing the forecast for fewer closings. The company now expects to invest approximately $5.3 billion in land acquisition and development for the year, below its previous outlook.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating expenses, Construction Costs | Q4 FY2026 | PulteGroup expects construction costs to decline by low single digits year over year in Q4 FY2026. | — | — |
| Operating cash flow | FY2026 | $1.0 billion | $1.0 billion | Held |
| Capex, Land Acquisition and Development | FY2026 | $5.3 billion | $5.4 billion | Cut |
| Tax rate | Q4 FY2026 | 24.5% | — | New |
| Operating expenses growth, Sga | FY2026 | 10.3%–10.5% | — | New |
| Gross margin | FY2026 | 24.5%–25.0% | — | New |
| Gross margin | Q4 FY2026 | 24.0%–24.5% | — | New |
| Units growth, Community Count | Q4 FY2026 | 3.00%–5.00% | — | New |
| Revenue, Average Sales Price | FY2026 | $550,000.00–$560,000.00 | — | New |
| Revenue, Average Sales Price | Q4 FY2026 | $550,000.00–$560,000.00 | — | New |
| Units, Home Closings | FY2026 | 27,000–27,500 | — | — |
| Units, Home Closings | Q4 FY2026 | 7,000–7,500 | — | — |
| Tax rate | FY2026 | 24.5% | — | New |
| Operating expenses growth, Homebuilding Sga | FY2026 | 9.50%–9.70% | — | New |
| Units growth, Community Count | Q3-Q4 FY2026 | 3.00%–5.00% | — | New |
| Gross margin, Homebuilding | FY2026 | 24.5%–25.0% | — | New |
| Units, Closings | FY2026 | 28,500–29,000 | — | — |