MHO

M/I Homes just reported Q3 2026 results that show the real story is in profitability, not the share price. The stock barely moved, up about 0.02% in Friday trading after a rough few months that saw it fall roughly 18% over 90 days. Earnings told a different tale. Revenue landed around US$1.08b, yet pretax income came in at US$87m, pointing to an 8% pretax margin that looks much thinner than many investors expect from this homebuilder. The gap between the calm price reaction and that margin squeeze is where the quarter really lives. Love the steady revenue at M/I Homes but concerned about that thinner 8% pretax margin and recent share slide? Benchmark this quarter against our list of solid balance sheet and fundamentals stocks (26 results). - Revenue (Q3 2026 vs Q3 2025): US$1,076.1m vs. US$1,131.8m (down about 5%) - Net Income (Excl. Extra Items, Q3 2026 vs Q3 2025): US$66.6m vs. US$106.5m (down about 37%) - Basic EPS (Q3 2026 vs Q3 2025): US$2.62 vs. US$4.01 (down about 35%) - Pretax Margin (Q3 2026 vs Q3 2025): Approximately 8% pretax margin in Q3 2026 vs. a materially higher level a year ago, consistent with the decline in earnings Ask Charlie what rising rate buydowns mean for M/I Homes' margins. Supporters of M/I Homes argue that the mortgage arm and land engine will steadily fatten earnings even if volumes cool. "Bullish analysts expect M/I Homes to use its in-house mortgage programs, higher priced move-up community mix, and AI-supported land sourcing to compound orders and support resilient profitability over time." The latest quarter only partially lines up with that script. The mortgage unit kept a 96% capture rate, yet pretax income there fell 19% and group pretax margin compressed to about 8% as rate buydowns and higher lot costs bit into profit. Community count and lot investment grew, so the tools are in place, but they are not yet translating into resilient earnings. One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all. Bearish investors worry that M/I Homes is leaning too hard on subsidies to keep buyers in the funnel. "Although M/I Homes is using mortgage rate buydowns to sustain record new contract levels, the need to keep offering government spec programs near 4.875% and conventional programs just above 5% while market rates sit around 7% risks structurally higher incentive costs." The Q3 numbers give that concern real teeth. Gross margin excluding inventory charges slipped to 21.3%, down about 320 bps, while pretax margin narrowed to roughly 8% and mortgage unit pretax income fell 19%. Incentive spend and higher lot costs are now visibly pressuring earnings, even as contracts and community count hold up. M/I Homes just showed how steady demand can still coexist with pressured profitability. The real opportunity is finding stocks that could be undervalued before the market adjusts to their underlying earnings power. - Company 1 - 34% below our estimate - focuses on complex manufacturing programs in regulated sectors as a record pipeline of new customer wins converts into production revenue. - Company 2 - 24% below our estimate - builds software and cloud infrastructure that enterprises rely on as their AI projects move from pilots into core workflows. - Company 3 - 17% below our estimate - expands a premium tea beverage network while a fast growing membership program deepens customer loyalty and supports higher spending per visit. Three companies from the same screener. Open every one of the 29 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MHO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Total Revenue: $1.08 billion, down 5% year over year. - Pre-Tax Income: $87 million, down 38% year over year; 8% pre-tax margin. - Gross Margin: 20.9% including $5 million of inventory charges; 21.3% excluding charges, down 320 basis points year over year. - SG&A Expenses: 13.1% of revenue vs. 11.9% a year ago; expenses up 5% year over year. - EBITDA: $103 million vs. $157 million in the prior-year third quarter. - Earnings Per Diluted Share: $2.56 vs. $3.92 last year. - Effective Tax Rate: 23% vs. 24% a year ago. - Return on Equity: 9% for the quarter. - Homes Sold (New Contracts): 1,861, down 2% year over year; 6,598 year to date, up 5%. - Homes Delivered (Closings): 2,241, down 2% year over year; 6,361 year to date, down 4%. - Cancellation Rate: 12% for the quarter. - Community Count: 246 at quarter end, up 6% year over year (103 north, 143 south); 27 opened, 15 closed during the quarter; year-end 2026 count estimated ~5% higher than last year. - Regional Performance: Northern new contracts up 1%, deliveries up 1% (42% of total); Southern new contracts down 4%, closings down 5% (58% of total). - Mortgage Capture Rate: 96%, up from 93% last year. - Mortgage & Title Pre-Tax Income: $13.4 million, down 19% from $16.6 million. - Mortgage Revenue: $32.7 million, down 5% year over year. - Average Mortgage Amount: $403,000 vs. $406,000 last year; loans originated 1,835, down 1%; loan volume sold down 5%. - Buyer Credit Metrics: Average credit score 748; average down payment over 16%; average first-mortgage LTV 84%. - Cash Balance: $620 million; zero borrowings under $900 million credit facility. - Equity / Book Value: Record $3.3 billion of equity; record book value per share of $130. - Debt Ratios: Debt-to-capital 18%; net debt-to-capital 2%. - Land Position: ~23,400 owned lots (~2.5-year supply) and ~25,600 controlled lots, totaling ~49,000 lots (~5-year supply); unsold land investment $1.9 billion vs. $1.8 billion a year ago. - Land Spend: $135 million on land purchases and $155 million on land development ($290 million total) in the quarter. - Inventory Homes: 721 completed and 3,242 total at quarter end vs. 776 completed and 3,001 total a year ago. - Share Repurchases: $50 million repurchased in the quarter; $200 million remaining under authorization; 21% of shares repurchased since start of 2022. - Interest: Interest income net of interest expense $3.6 million; interest incurred $9.2 million. - Warning! GuruFocus has detected 6 Warning Sign with MHO. - Is MHO fairly valued? Test your thesis with our free DCF calculator. Release Date: October 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - M/I Homes Inc (NYSE:MHO) maintains a rock-solid balance sheet with $3.3 billion in equity, zero borrowings under its $900 million credit facility, and over $600 million in cash, resulting in a debt-to-capital ratio of 18% and net debt-to-capital of 2%. - The company has a strong land position with 49,000 owned and controlled lots, equating to about a five-year supply, and virtually no land banking or goodwill on the balance sheet. - M/I Homes Inc (NYSE:MHO) achieved a 96% mortgage capture rate, one of the highest in the industry, with quality buyers averaging credit scores of 748 and down payments over 16%. - The Smart Series line of homes continues to be a significant contributor, comprising about half of sales, appealing to first-time homebuyers. - The company has repurchased 21% of its outstanding shares since the start of 2022, demonstrating a commitment to returning value to shareholders. - M/I Homes Inc (NYSE:MHO) experienced a 5% decrease in total revenue to $1.08 billion and a 38% decrease in pre-tax income to $87 million in the third quarter. - Gross margin excluding inventory charges fell 320 basis points to 21.3%, primarily due to higher costs of mortgage rate buydowns and increased lot costs. - New contracts declined 2% overall, with a notable 16% drop in September, reflecting challenging market conditions and rising interest rates. - SG&A expenses increased to 13.1% of revenue from 11.9% a year ago, driven by higher community count and increased advertising costs. - The company faces regional challenges, particularly in Florida (Tampa and Sarasota) and Texas, where market conditions are more difficult compared to the Midwest and Carolinas. Q: Given the recent leg down in the market and higher rates, are you considering adjustments to your business modelsuch as spec versus build-to-order mix, price point, or land strategyheading into 2027? A: CEO Robert Schottenstein said the company will not make material changes to its strategy, though it will be more careful about new land deals and may adjust product mix in a few markets. He emphasized the importance of a strong balance sheet in challenging times, noted the company controls enough land on and off its books to manage whatever comes, and highlighted record customer service, home readiness, and Google review scores as evidence of strong execution. CFO Phil Creek added that starts have been reduced slightly and spec levels are roughly flat year over year despite a 5% higher community count. Q: Can you discuss how Florida is trending, particularly the pricing adjustments on inventory homes in Tampa and Sarasota, and whether you're making further pricing or incentive adjustments in other regions in October? A: CFO Phil Creek said Florida and Texas have been more challenging than the Midwest and Carolinas. Orlando has held up well, while Tampa and Sarasota have been tougher, with adjustments made on a community-by-community basis. In Q3, Sarasota contracts were up year over year while Tampa was down slightly. CEO Robert Schottenstein added that the new Fort Myers and Naples operations are exceeding expectations and expressed confidence in the Tampa team. Q: Are you seeing any effects from labor availability issues or immigration enforcement activity on your operations? A: CFO Phil Creek said certain markets experience ICE-related issues that come and go, but overall labor is not a major problem. He noted the company could build 1,000 to 1,500 more homes a year from a land and labor standpoint if demand were there, and that construction and land development costs have remained fairly flat despite fuel cost increases. Q: What drove the increase in SG&A expenses this quarter, and were there any one-time items? A: CFO Phil Creek said SG&A rose about 5%, roughly in line with the increase in community count, as each community generally requires additional sales and construction personnel. The company is also spending somewhat more on advertising and promotion. He noted the company's goal is to grow community count 5% to 10% annually, which it has achieved in recent years. Q: Last quarter you discussed shifting toward more move-up communities. What are you doing this quarter, and are you looking to further change that mix in 2027? A: CEO Robert Schottenstein said the shift toward move-up product began three to six months ago in select marketsmarkets where over 75% of business was first-time buyerand will continue. He said nothing has changed in the last couple of quarters, the mix is very good in many markets, and the company does not want too many eggs in one basket. Q: What were incentive levels this quarter, and how are they trending entering the fourth quarter? A: CFO Phil Creek said incentives increased through the quarter, primarily through mortgage rate buydowns, with first-time buyers also often needing help with closing costs. He noted some markets are seeing more price reductions, and more customers are gravitating toward ARM products. Incentives are managed on a community-by-community basis and tracked daily. Q: How would you characterize the change in market conditions during the third quarter? A: CEO Robert Schottenstein said conditions changed notably, citing the 10-year Treasury rising from 4.5% on July 1 to 5.3% by September 30, and the average 30-year fixed mortgage rate rising nearly 100 basis points from about 6.75% to roughly 7.75%. He said rising rates, elevated fuel prices, inflation concerns, and the conflict in Iran have hurt consumer confidence, though mortgage rates have come down slightly as of the call date. Q: How did new contracts trend through the quarter, and what was the cancellation rate? A: CFO Phil Creek said new contracts were up 15% in July, down 6% in August, and down 16% in September, for a 2% decline overall versus last year. The cancellation rate for the quarter was 12%. Half of third-quarter sales were to first-time buyers, and 80% were inventory homes. Q: What is the state of your balance sheet and liquidity? A: CEO Robert Schottenstein said the balance sheet is as strong as at any time in the company's 50-year history, with record equity of $3.3 billion, book value per share of $130, zero borrowings under its $900 million revolver, over $600 million in cash, an 18% debt-to-capital ratio, and a 2% net debt-to-capital ratio. He noted the company does virtually no land banking and has essentially zero goodwill. Q: What drove the gross margin decline, and how is your mortgage capture rate performing? A: CEO Robert Schottenstein said gross margin excluding inventory charges was 21.3%, down 320 basis points year over year, primarily due to higher rate buydown costs and higher lot costs. He highlighted a 96% mortgage capture rateup from 93% last year and among the highest in the industrywith average credit scores of 748 and average down payments over 16%. Q: How is your land position and community count shaping up? A: CEO Robert Schottenstein said the company owns about 23,400 lots (roughly a 2.5-year supply) and controls about 25,600 lots via options, for roughly 49,000 owned and controlled lotsabout a five-year supply. Community count was 246 at quarter-end, up 6% year over year, and is expected to be about 5% higher than last year at year-end 2026. Q: How did the mortgage company perform in the quarter? A: Derek Klutch, CEO of M/I Financial, said mortgage and title operations generated pre-tax income of $13.4 million, down 19% from $16.6 million a year ago, on a 5% revenue decline to $32.7 million due to lower margins on loans sold, a lower average loan amount, and slightly fewer loans originated. The average loan-to-value was 84%, and the average mortgage amount was For the complete transcript of the earnings call, please refer to the full earnings call transcript.

- Interested in M/I Homes, Inc.? Here are five stocks we like better. - Third-quarter results weakened as higher mortgage rates and softer demand reduced revenue 5% to $1.08 billion and pre-tax income 38% to $87 million. EPS fell to $2.56 from $3.92, while gross margin declined to 20.9% amid higher rate-buydown and lot costs. - First-time buyers and affordable Smart Series homes remained central to sales, while inventory homes accounted for 80% of quarterly sales. Management reduced housing starts modestly and described market conditions as "choppy and challenging," particularly in parts of Florida and Texas. - M/I Homes maintained a strong financial position with $620 million in cash, no revolver borrowings and net debt-to-capital of just 2%. The company continued investing in land and repurchasing shares, buying back $50 million during the quarter, while ending with roughly 49,000 owned or controlled lots. - KB Home Constructs Bullish Price Action As Wider Industry Thrives M/I Homes (NYSE:MHO) reported third-quarter results that reflected softer demand and higher mortgage rates, with revenue declining 5% to $1.08 billion and pre-tax income falling 38% to $87 million. The homebuilder closed 2,241 homes during the quarter, down 2% from a year earlier, while new contracts declined 2%. CEO and President Bob Schottenstein said market conditions became more difficult as the quarter progressed, citing a rise in the 10-year U.S. Treasury yield to 5.3% at Sept. 30 from 4.5% at July 1. The average par rate on a 30-year fixed mortgage increased by nearly 100 basis points over the same period, reaching nearly 7.75%, he said. → The AI Sell-Off Continues—These 3 Stocks Keep Raising Guidance Anyway - Will Fed Rate-Hike Pause Lead To Small-Cap Outperformance? Schottenstein said higher rates, elevated fuel prices, inflation concerns and the continued conflict in Iran weighed on consumer confidence and housing demand. He noted that mortgage rates had declined somewhat as of the call date, but said market conditions could remain "choppy and challenging" for some time. The company continued to use mortgage-rate buydowns as its primary sales incentive, though the higher cost of those incentives weighed on profitability. Third-quarter gross margin was 20.9%, including $5 million of inventory charges. Excluding those charges, gross margin was 21.3%, down 320 basis points from a year earlier. → Tesla's Roadster Reveal Hints at 2 Much Bigger Moves Schottenstein said the margin decline primarily reflected higher rate-buydown costs and higher lot costs. He added that community location, home design and sales execution remain important differentiators even as builders broadly use rate incentives. Earnings per diluted share declined to $2.56 from $3.92 a year earlier. EBITDA fell to $103 million from $157 million in the prior-year quarter, while return on equity was 9%. Selling, general and administrative expenses represented 13.1% of revenue, compared with 11.9% a year earlier, as the company expanded its community count and increased spending on advertising and promotion. → Luxury's Middle Market Is Cracking—These 3 Stocks Could Win For the first nine months of 2026, M/I Homes sold 6,598 homes, up 5% from the prior-year period, and closed 6,361 homes, down 4%. First-time buyers accounted for 50% of third-quarter sales, with the company's Smart Series affordable-home line representing about half of total sales. The remaining half of sales went to second-time or move-up buyers. Inventory homes made up 80% of third-quarter sales, while approximately 35% of quarterly closings involved homes that were both sold and delivered during the period. The company reported a 12% cancellation rate. Its mortgage business captured 96% of company homebuyers during the quarter, up from 93% a year earlier. Buyers continued to show relatively strong credit profiles, with average credit scores of 748 and average down payments above 16%, according to Schottenstein. M/I Financial, the company's mortgage and title operation, generated $13.4 million of pre-tax income, down 19% from the prior-year quarter. Revenue declined 5% to $32.7 million, reflecting lower margins on loans sold, a lower average loan amount and a slight decline in originations. Loans originated declined 1% to 1,835, while loan-sale volume fell 5%. M/I Homes ended the quarter with 246 active communities, up 6% from a year earlier, after opening 27 communities and closing 15 during the period. It expects its year-end community count to be approximately 5% above the prior year. New contracts in the northern region increased 1% from a year earlier, while southern-region contracts declined 4%. The company's largest third-quarter division income contributions came from Chicago, Columbus, Minneapolis, Dallas and Charlotte. Management said Florida and Texas have been more challenging than the Midwest and Carolinas. Phil Creek, executive vice president and chief financial officer, said Orlando had held up relatively well, while Tampa and Sarasota had been more difficult. He said adjustments to pricing and incentives are being made on a community-by-community basis rather than through broad changes. Schottenstein said the company has begun shifting toward more move-up product in select markets where first-time buyers had represented more than 75% of business. However, he said M/I Homes does not expect material companywide changes to its product strategy. Creek said the company has modestly reduced housing starts in response to demand conditions. It ended the quarter with 721 completed inventory homes and 3,242 total inventory homes, compared with 776 completed homes and 3,001 total inventory homes a year earlier. Management emphasized the company's liquidity and low leverage. M/I Homes ended the quarter with $620 million in cash and no borrowings under its $900 million unsecured revolving credit facility. Equity reached a record $3.3 billion, or book value of $130 per share, while net debt-to-capital was 2%. The company owned approximately 23,400 lots and controlled about 25,600 additional lots through option contracts, for roughly 49,000 owned and controlled lots. That represents an estimated five-year supply, according to management. The company spent $290 million during the quarter on land purchases and land development. M/I Homes also repurchased $50 million of stock during the quarter and had $200 million remaining under its board authorization. Since the start of 2022, the company has repurchased 21% of its outstanding shares. Schottenstein said the company would be more cautious on new land deals, hiring and expenses but does not anticipate a radical strategic shift. "We have our hands firmly on the rudder," he said, pointing to the company's balance sheet, land position and geographic footprint as strengths for managing through the cycle. M/I Homes, Inc is a residential construction company that builds and sells single-family homes for a range of buyers, including first-time, move-up and luxury-home purchasers. Its operations include land acquisition and development, home design, construction, marketing and sales, with communities offered in suburban and metropolitan markets. The company also provides services that support the homebuying process, including mortgage financing through M/I Financial and title-related services through its affiliated operations. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "M/I Homes Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management attributed the 38% decrease in pretax income to increasingly difficult market conditions, specifically citing the 100 basis point rise in mortgage rates during the quarter. - The company utilized mortgage rate buy-downs as the primary sales incentive, which directly pressured gross margins as the cost of these buy-downs increased alongside rising benchmark rates. - Strategic emphasis remains on the 'Smart Series' affordable line, which accounted for approximately 50% of total sales, providing a critical entry point for first-time buyers in a high-rate environment. - Management highlighted a record 96% mortgage capture rate as a key differentiator, allowing for tighter control over the closing process and buyer qualification during economic uncertainty. - The company maintains a 'rock solid' balance sheet with zero land banking and zero goodwill, a deliberate structural choice intended to provide maximum flexibility during cyclical downturns. - Operational focus has shifted toward 'controllables,' including intensified sales training and maintaining high home-readiness scores to drive conversion despite lower foot traffic. - The company expects year-end community count to be approximately 5% higher than the previous year, driven by 27 new community openings in the third quarter. - Management is adopting a more cautious stance on new land acquisitions while leveraging a 5-year supply of owned and controlled lots to sustain volume without overextending capital. - Strategic pivots are underway in select markets to increase the mix of move-up housing, specifically targeting regions where first-time buyer concentration exceeded 75%. - Future margin performance remains dependent on the stabilization of the 10-year Treasury, as further rate volatility would likely necessitate continued high-cost incentive spending. - The company has reduced housing starts slightly in response to current demand trends, aiming to keep finished spec inventory flat despite the growth in total community count. - Inventory charges of $5 million impacted gross margins, reflecting localized pricing adjustments in more challenged markets like Florida's West Coast. - SG&A expenses increased 5% year-over-year, primarily driven by the higher overhead costs associated with an expanded community footprint. - Management flagged growing economic uncertainty fueled by elevated fuel prices, inflation concerns, and the continued conflict in Iran as significant headwinds to consumer confidence. - The company noted that while labor availability is generally stable, localized issues with immigration enforcement and rising diesel costs for land development remain persistent operational risks. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management stated they will not make radical changes to the core strategy but will be 'more careful' about new land deals and hiring. - Bob Schottenstein emphasized that their refusal to engage in land banking or off-balance sheet financing protects them from cross-collateralization risks during downturns. - Florida and Texas were identified as more challenging than the Midwest or Carolinas, leading to subdivision-by-subdivision pricing adjustments. - Management noted that while Tampa and Sarasota are currently challenged, the new Fort Myers/Naples division is exceeding initial expectations. - Management observed a recent trend of customers migrating toward ARM products to combat high fixed rates. - They noted that buyers now expect a reduced competitive interest rate as a baseline requirement before considering a purchase.

M/I Homes (MHO) came out with quarterly earnings of $2.7 per share, missing the Zacks Consensus Estimate of $3.05 per share. This compares to earnings of $4.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -11.48%. A quarter ago, it was expected that this homebuilder would post earnings of $3.17 per share when it actually produced earnings of $3.14, delivering a surprise of -0.95%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. M/I Homes, which belongs to the Zacks Building Products - Home Builders industry, posted revenues of $1.08 billion for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.67%. This compares to year-ago revenues of $1.13 billion. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. M/I Homes shares have lost about 3% since the beginning of the year versus the S&P 500's gain of 12.7%. While M/I Homes has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for M/I Homes was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.19 on $1.1 billion in revenues for the coming quarter and $12.00 on $4.18 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Home Builders is currently in the bottom 5% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, PulteGroup (PHM), has yet to report results for the quarter ended September 2026. The results are expected to be released on October 22. This homebuilder is expected to post quarterly earnings of $2.63 per share in its upcoming report, which represents a year-over-year change of -11.2%. The consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. PulteGroup's revenues are expected to be $4.13 billion, down 6.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report M/I Homes, Inc. (MHO) : Free Stock Analysis Report PulteGroup, Inc. (PHM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

COLUMBUS, Ohio, Oct. 21, 2026 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three and nine months ended September 30, 2026. 2026 Third Quarter Results: - New contracts decreased 2% to 1,861 - Homes delivered decreased 2% to 2,241 - Revenue declined 5% to $1.1 billion - Gross margin of 20.9%; 21.3% excluding inventory charges - Pre-tax income of $87 million, including inventory charges of $5 million, down 38% - Net income of $67 million ($2.56 per diluted share) versus $107 million ($3.92 per diluted share) - Shareholders' equity reached a record $3.3 billion, with book value per share increasing to a record $130 - Repurchased $50 million of common stock - Homebuilding debt to capital ratio of 18% The Company reported pre-tax income of $86.9 million and net income of $66.6 million ($2.56 per diluted share). These results include pre-tax inventory charges of $4.7 million ($0.14 per diluted share). This compares to pre-tax income of $139.8 million and net income of $106.5 million, or $3.92 per diluted share, for the third quarter of 2025. For the nine months ended September 30, 2026, pre-tax income was $280.6 million and net income was $213.5 million, or $8.14 per diluted share. This compared to pre-tax income of $446.0 million and net income of $339.0 million, or $12.32 per diluted share, for the same period of 2025. Homes delivered in 2026's third quarter decreased 2% to 2,241 homes. This compares to 2,296 homes delivered in 2025's third quarter. Homes delivered for the nine months ended September 30, 2026 were 6,361 compared to 2025's deliveries of 6,620 for the nine months ended September 30, 2025, a decrease of 4%. New contracts decreased 2% to 1,861 for the third quarter of 2026 compared to 1,908 in last year's third quarter. For the first nine months of 2026, new contracts were 6,598 compared to 6,278 in 2025, an increase of 5%. Homes in backlog at September 30, 2026 had a total sales value of $1.1 billion, a 9% decrease from a year ago. Backlog units at September 30, 2026 decreased 7% to 2,046 homes, with an average sales price of $539,000. At September 30, 2025, backlog sales value was $1.2 billion, with backlog units of 2,189 and an average sales price of $553,000. M/I Homes had 246 communities at September 30, 2026 compared to 233 communities at September 30, 2025. The Company's cancellation rate was 12% in both the third quarter of 2026 and 2025. Robert H. Schottenstein, Chief Executive Officer and President, commented, "Our third quarter results reflect increasingly difficult market conditions, including higher mortgage interest rates, weaker demand and growing economic uncertainty. Notwithstanding these conditions, we produced fairly solid results generating $87 million of pre-tax income, equating to an 8% return. Despite the current conditions, we remain confident in the long-term fundamentals of the housing industry. Our financial condition is excellent, is highlighted by a very strong balance sheet with record shareholders' equity of $3.3 billion, no borrowings under our $900 million unsecured credit facility, cash of $621 million, a homebuilding debt-to-capital ratio of 18%, and a net debt-to-capital ratio of 2%. We are well positioned to manage through this current cycle given the strength of our balance sheet, low debt levels, diverse product offerings and well-located communities." The Company will broadcast live its earnings conference call today at 10:30 A.M. Eastern Time. To listen to the call live, log on to the M/I Homes' website at mihomes.com, click on the "Investors" section of the site, and select "Listen to the Conference Call." A replay of the call will continue to be available on our website through October 2027. M/I Homes, Inc., celebrating its 50th year in business in 2026, is one of the nation's leading homebuilders of single-family homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota, Fort Myers/Naples and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina and Nashville, Tennessee. Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "targets," "envisions," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements involve a number of risks and uncertainties. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those in such forward-looking statements as a result of various factors, including, without limitation, factors relating to the economic environment, interest rates, availability of resources, competition, market concentration, land development activities, construction defects, product liability and warranty claims and various governmental rules and regulations including changes in trade policy affecting business such as new or increased tariffs, as well as the potential impact of retaliatory tariffs and other penalties, as more fully discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. We undertake no duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted. M/I Homes, Inc. and SubsidiariesSummary Statement of Income (unaudited)(Dollars and shares in thousands, except per share amounts) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 New contracts | 1,861 | | 1,908 | | 6,598 | | 6,278 Average community count | 240 | | 234 | | 236 | | 228 Cancellation rate | 12 % | | 12 % | | 10 % | | 12 % Backlog units | 2,046 | | 2,189 | | 2,046 | | 2,189 Backlog sales value | $1,103,044 | | $1,210,790 | | $1,103,044 | | $1,210,790 Homes delivered | 2,241 | | 2,296 | | 6,361 | | 6,620 Average home closing price | $ 460 | | $ 477 | | $ 459 | | $ 477 | | | | | | | Homebuilding revenue: | | | | | | | Housing revenue | $1,031,362 | | $1,095,418 | | $2,921,946 | | $3,159,924 Land revenue | 11,963 | | 1,724 | | 41,777 | | 12,933 Total homebuilding revenue | $1,043,325 | | $1,097,142 | | $2,963,723 | | $3,172,857 | | | | | | | Financial services revenue | 32,744 | | 34,649 | | 96,311 | | 97,619 Total revenue | $1,076,069 | | $1,131,791 | | $3,060,034 | | $3,270,476 | | | | | | | Cost of sales - operations | 846,869 | | 854,122 | | 2,388,544 | | 2,453,405 Cost of sales - inventory charges | 4,723 | | 7,583 | | 8,923 | | 7,583 Gross margin | $ 224,477 | | $ 270,086 | | $ 662,567 | | $ 809,488 General and administrative expense | 76,568 | | 70,766 | | 207,952 | | 197,086 Selling expense | 64,611 | | 64,049 | | 183,974 | | 180,490 Operating income | $ 83,298 | | $ 135,271 | | $ 270,641 | | $ 431,912 Interest income, net of interest expense | (3,578) | | (4,548) | | (9,969) | | (14,122) Income before income taxes | $ 86,876 | | $ 139,819 | | $ 280,610 | | $ 446,034 Provision for income taxes | 20,323 | | 33,329 | | 67,157 | | 107,064 Net income | $ 66,553 | | $ 106,490 | | $ 213,453 | | $ 338,970 | | | | | | | Earnings per share: | | | | | | | Basic | $ 2.62 | | $ 4.01 | | $ 8.31 | | $ 12.60 Diluted | $ 2.56 | | $ 3.92 | | $ 8.14 | | $ 12.32 | | | | | | | Weighted average shares outstanding: | | | | | | | Basic | 25,431 | | 26,544 | | 25,699 | | 26,895 Diluted | 25,949 | | 27,188 | | 26,233 | | 27,513 M/I Homes, Inc. and SubsidiariesSummary Balance Sheet and Other Information (unaudited)(Dollars in thousands, except per share amounts) | As of | September 30, | 2026 | | 2025 Assets: | | | Total cash, cash equivalents and restricted cash | $ 620,595 | | $ 734,174 Mortgage loans held for sale | 232,575 | | 239,585 Inventory: | | | Lots, land and land development | 1,846,926 | | 1,743,476 Land held for sale | 37,867 | | 9,231 Homes under construction | 1,488,266 | | 1,457,843 Other inventory | 227,589 | | 202,280 Total Inventory | $ 3,600,648 | | $ 3,412,830 | | | Property and equipment - net | 34,884 | | 32,668 Investments in joint venture arrangements | 87,167 | | 81,514 Operating lease right-of-use assets | 49,793 | | 50,322 Goodwill | 16,400 | | 16,400 Deferred income tax asset | 4,508 | | 13,451 Other assets | 213,595 | | 188,600 Total Assets | $ 4,860,165 | | $ 4,769,544 | | | Liabilities: | | | Debt - Homebuilding Operations: | | | Senior notes due 2028 - net | $ 399,007 | | $ 398,233 Senior notes due 2030 - net | 298,251 | | 297,747 Total Debt - Homebuilding Operations | $ 697,258 | | $ 695,980 | | | Notes payable bank - financial services operations | 230,424 | | 231,979 Total Debt | $ 927,682 | | $ 927,959 | | | Accounts payable | 229,132 | | 257,981 Operating lease liabilities | 51,637 | | 51,968 Other liabilities | 399,147 | | 382,187 Total Liabilities | $ 1,607,598 | | $ 1,620,095 | | | Shareholders' Equity | 3,252,567 | | 3,149,449 Total Liabilities and Shareholders' Equity | $ 4,860,165 | | $ 4,769,544 | | | Book value per common share | $ 129.94 | | $ 120.44 Homebuilding debt to capital ratio (1) | 18 % | | 18 % (1) | The ratio of homebuilding debt to capital is calculated as the carrying value of our homebuilding debt outstanding divided by the sum of the carrying value of our homebuilding debt outstanding plus shareholders' equity. M/I Homes, Inc. and SubsidiariesSelected Supplemental Financial and Operating Data (unaudited)(Dollars in thousands) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 Cash (used in) provided by operating activities | $ (13,319) | | $ 43,414 | | $ 159,218 | | $ 146,056 Cash used in investing activities | $ (34,013) | | $ (15,452) | | $ (40,768) | | $ (30,698) Cash used in financing activities | $ (68,014) | | $ (94,186) | | $ (187,044) | | $ (202,754) | | | | | | | Land/lot purchases | $ 135,209 | | $ 115,372 | | $ 345,505 | | $ 363,106 Land development spending | $ 154,418 | | $ 181,320 | | $ 413,523 | | $ 421,927 Land sale revenue | $ 11,963 | | $ 1,724 | | $ 41,777 | | $ 12,933 Land sale gross profit | $ 2,304 | | $ 163 | | $ 9,994 | | $ 4,151 | | | | | | | Financial services pre-tax income | $ 13,432 | | $ 16,598 | | $ 41,952 | | $ 47,180 M/I Homes, Inc. and SubsidiariesNon-GAAP Financial Results (1)(Dollars in thousands) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 Net income | $ 66,553 | | $ 106,490 | | $ 213,453 | | $ 338,970 Add: | | | | | | | Provision for income taxes | 20,323 | | 33,329 | | 67,157 | | 107,064 Interest income - net | (6,484) | | (8,118) | | (18,480) | | (23,885) Interest amortized to cost of sales | 7,915 | | 7,651 | | 22,561 | | 22,779 Depreciation and amortization | 5,775 | | 5,116 | | 16,362 | | 14,797 Non-cash charges | 9,357 | | 12,108 | | 22,303 | | 20,224 Adjusted EBITDA | $ 103,439 | | $ 156,576 | | $ 323,356 | | $ 479,949 | (1) | We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations. M/I Homes, Inc. and SubsidiariesSelected Supplemental Financial and Operating Data | NEW CONTRACTS | | Three Months Ended | | | Nine Months Ended | | September 30, | | | September 30, | | | | | | % | | | | | | | % Region | | 2026 | | 2025 | | Change | | | 2026 | | 2025 | | Change Northern | | 746 | | 742 | | 1 % | | | 2,788 | | 2,680 | | 4 % Southern | | 1,115 | | 1,166 | | (4) % | | | 3,810 | | 3,598 | | 6 % Total | | 1,861 | | 1,908 | | (2) % | | | 6,598 | | 6,278 | | 5 % | HOMES DELIVERED | | Three Months Ended | | | Nine Months Ended | | September 30, | | | September 30, | | | | | | % | | | | | | | % Region | | 2026 | | 2025 | | Change | | | 2026 | | 2025 | | Change Northern | | 949 | | 942 | | 1 % | | | 2,593 | | 2,735 | | (5) % Southern | | 1,292 | | 1,354 | | (5) % | | | 3,768 | | 3,885 | | (3) % Total | | 2,241 | | 2,296 | | (2) % | | | 6,361 | | 6,620 | | (4) % | BACKLOG | September 30, 2026 | | | September 30, 2025 | | | Dollars | | Average | | | | | Dollars | | Average Region | Units | | (millions) | | Sales Price | | | Units | | (millions) | | Sales Price Northern | 1,031 | | $ 595 | | $ 577,000 | | | 1,081 | | $ 609 | | $ 563,000 Southern | 1,015 | | $ 508 | | $ 501,000 | | | 1,108 | | $ 602 | | $ 544,000 Total | 2,046 | | $ 1,103 | | $ 539,000 | | | 2,189 | | $ 1,211 | | $ 553,000 | LAND POSITION SUMMARY | September 30, 2026 | | | September 30, 2025 | Lots | Lots Under | | | | Lots | Lots Under | Region | Owned | Contract | Total | | | Owned | Contract | Total Northern | 6,880 | 13,396 | 20,276 | | | 7,140 | 10,843 | 17,983 Southern | 16,545 | 12,113 | 28,658 | | | 17,268 | 15,374 | 32,642 Total | 23,425 | 25,509 | 48,934 | | | 24,408 | 26,217 | 50,625 M/I Homes, Inc. and SubsidiariesNon-GAAP Reconciliation (1)(Dollars and shares in thousands, except per share amounts) | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 Income before income taxes | $ 86,876 | | $ 139,819 | | $ 280,610 | | $ 446,034 Add: Inventory charges (2) | 4,723 | | 7,583 | | 8,923 | | 7,583 Adjusted income before income taxes | $ 91,599 | | $ 147,402 | | $ 289,533 | | $ 453,617 | | | | | | | Net income | $ 66,553 | | $ 106,490 | | $ 213,453 | | $ 338,970 Add: Inventory charges - net of tax (2) | 3,618 | | 5,991 | | 6,788 | | 5,991 Adjusted net income | $ 70,171 | | $ 112,481 | | $ 220,241 | | $ 344,961 | | | | | | | Inventory charges - net of tax (2) | $ 3,618 | | $ 5,991 | | $ 6,788 | | $ 5,991 Divided by: Diluted weighted average shares outstanding | 25,949 | | 27,188 | | 26,233 | | 27,513 | | | | | | | Diluted earnings per share related to inventory charges (2) | $ 0.14 | | $ 0.22 | | $ 0.26 | | $ 0.22 | | | | | | | Add: Diluted earnings per share | 2.56 | | 3.92 | | 8.14 | | 12.32 | | | | | | | Adjusted diluted earnings per share | $ 2.70 | | $ 4.14 | | $ 8.40 | | $ 12.54 | | | | | | | (1) | We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations. | (2) | Represents the related charges divided by diluted weighted average shares outstanding during the respective period as presented in the Summary Statement of Income. View original content to download multimedia:https://www.prnewswire.com/news-releases/mi-homes-reports-2026-third-quarter-results-302914531.html

Image source: The Motley Fool. Wed, Oct. 21, 2026 - Executive Vice President and Chief Financial Officer - Phillip G. Creek - Chief Executive Officer and President - Robert H. Schottenstein - President of M/I Financial - Derek J. Klutch Operator: Good morning, and welcome to the M/I Homes, Inc. Third Quarter Earnings Conference Call. My name is Lacey, and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Mr. Phillip G. Creek Please go ahead. Phillip G. Creek: Thank you for joining us today. With me is Bob Schottenstein, our CEO and president and Derek J. Klutch, president of our mortgage company. First, to address regulation fair disclosure, we encourage you to ask any questions regarding issues that you consider material during this call. Because we are prohibited from discussing significant nonpublic items with you directly. And as to forward looking statements, I want to remind everyone that the cautionary language about forward looking statements contained in today's press release also applies to any comments made during this call. Also, be advised that the company undertakes no obligation to update any forward looking statements made during this call. With that, I will turn the call over to Bob. Robert H. Schottenstein: Thanks, Phillip. Good morning, and thank you for joining us today. Our third quarter results reflect the increasingly difficult market conditions impacting the overall economy, consumer behavior, and obviously the home building industry. In the face of these conditions, we produce solid results generating $87 million of pretax income equating to an 8%-plus return. Conditions changed notably during the quarter. Perhaps the best evidence of explaining the intra quarter volatility is the movement in the benchmark 10-year US treasury bond. July 1, the-- 10-year treasury was at 4.5%. By August 1, it had risen to 4.75%. It then began to rise at a faster pace, particularly during September, and by September 30, it had reached 5.3%. In similar fashion, the average par contract interest rate for a 30 year fixed rate mortgage increased by nearly 100 basis points during the quarter. Going from roughly 6.75% at July 1 to close to 7.75% at September 30. The combination of these rising rates along with elevated fuel prices concerns with inflation, and the continued conflict in Iran, have clearly impacted consumer confidence and demand and have contributed to growing economic uncertainty. As of today, mortgage rates have come down slightly, which is very good news. But the current choppy and challenging conditions may continue for some time. Regardless, this is not the first time we have managed through challenging conditions. We have been in business for 50 years. And during times like this, execution matters more than ever and a strong balance sheet is absolutely essential. I am proud to share that on both of these counts, MI Homes is very well positioned to navigate the current market conditions. During the quarter, our teams executed at a very high level. And as I will explain in more detail in a few moments, our balance sheet is rock solid. As strong as at any time in our 50-year history. For the quarter, we sold 1.86 thousand homes, 2% less than a year ago and for the first 9 months of 2026, we have sold 6.6 thousand homes which is 5% more than a year ago. We continue to use mortgage rate buy downs as our primary incentive to drive sales. With rates rising during the quarter, the cost of such buydowns has increased. Thereby impacting our margins. We have carefully managed the nature and extent of rate buy downs as we deal with rising rates. And I might add, while rate buy downs are clearly important at this time, well located communities, quality product, and thoughtful design are just as, if not more important. When I talk about how much execution matters during times like this, the quality of our product, the strength of our communities, and the skills of our sales associates all make a meaningful difference in our results. In other words, nearly every builder is buying down rates. But the builder results from 1 builder to another clearly differ. And the difference is often all about execution. During the quarter, we closed 2.24 thousand homes, a 2% decrease compared to a year ago. Year to date, we have closed 6.36 thousand homes which is 4% less than a year ago. Our third quarter total revenue decreased by 5% to $1.08 billion and pretax income decreased 38% to what I mentioned earlier, $87 million. Our gross margin, excluding inventory charges, was 21.3% 23 basis points lower than a year ago, down primarily due to the higher cost of rate buy downs and higher lot costs versus a year ago. Our mortgage company's capture rate for the quarter was 96% 1 of the highest capture rates we have ever seen and certainly 1 of the highest capture rates in the history of the home building industry. We continue to see quality buyers in terms of credit worthiness with average credit scores of 748 and average down payments over 16%. Our Smart Series line of homes, which as most of you are our most affordable line of homes and generally appeals to the first time home buyer continues to be an important contributor to our sales performance. Of note, during the quarter, our Smart Series sales comprised about half of our sales. The other half went to second time or move up buyers. We ended the quarter with 246 communities and estimate that at the end of this year, our community count will be about 5% higher than last year. Respect to some comments about our markets, our division income contributions in the quarter were led by Chicago, Columbus, Minneapolis, Dallas, and Charlotte. New contracts during the third quarter in our Northern region increased by 1%. New contracts in our Southern region decreased by 4%. Our deliveries in the Northern region increased by 1% compared to last year and represented 42% of our company wide total. in our Southern region decreased by 5% over last year and, of course, represented the other 58% of deliveries. We have an excellent land position. I repeat, we have an excellent land position. Our owned and controlled lot position in the southern region decreased by 12% compared to last year and increased by 13% versus last year of the northern region. 41% of our total owned and controlled lots are in the North and the other 59% in the southern region. Company wide, we own on our books approximately 23.4 thousand lots which is roughly a 2.5-year supply. In addition, we control approximately 25.6 thousand lots via option contracts resulting in a total of roughly 49 thousand owned and controlled lots, equating to about a 5-year supply. My earlier remarks, I spoke about how critically important a strong balance sheet is in times like this. And as I said, our balance sheet is rock solid. and continues to be in excellent condition. We ended the third quarter with an all time record $3.3 billion of equity equating to a book value per share of $130. We had zero borrowings under our $900 million unsecured revolving credit facility, and we ended the quarter with over $600 million in cash. This has resulted in a debt to capital ratio of 18% and a net debt to capital ratio of 2%, 1 of the lowest debt levels in the homebuilding industry. Moreover, in looking at our balance sheet, it is important to recognize that we are 1 of the few builders that does virtually zero land banking. there is no confusion about what is on our books, and what is not. And our balance sheet has essentially zero goodwill on it. We are very proud of our financial condition. In closing, though these are more challenging times, we remain quite confident in the long term fundamentals of the homebuilding industry. With our strong land position, well located geographic footprint, well located communities, diverse product offering, and strong balance sheet MI Homes is well positioned to manage through this current cycle. And with that, I will turn it over to Phillip. Phillip G. Creek: Thanks, Bob. Our new contracts were down 2% when compared to last year. They were up 15% in July, down 6% in August, and down 16% in September. And our cancellation rate for the quarter was 12%. 50% of our third quarter sales were to first time buyers, and 80% were inventory homes. Our community count was 246 at the end of the third quarter, up 6% versus a year ago. The breakdown by region is 103 in the Northern Region, and 143 in the Southern Region. During the quarter, we opened 27 new communities while closing 15. We currently estimate that our 2026 year-end community count will be about 5% higher than last year. We delivered 2.24 thousand homes in the third quarter, and about 35% of our third quarter closings came from inventory homes that were both sold and delivered within the quarter. And this also compares to 35% in last year's third quarter. As of September 30, we had 5.2 thousand homes in the field, versus 5 thousand homes in the field a year ago. And our construction cost and cycle time were flat in the third quarter. Compared to the second quarter. Our revenue decreased 5% in the quarter This decline was due to fewer homes delivered and our average sale price declined also. Our gross margin was 20.9% for the quarter, including $5 million of inventory charges. Excluding these charges, our gross margin was 21.3%. Our third quarter SG&A expenses were 13.1% of revenue, compared to 11.9% a year ago. And our third quarter expenses increased 5% versus a year ago. Increased costs were primarily due to our increased community count. Interest income, net of interest expense for the quarter was $3.6 million and our interest incurred was $9.2 million. Our pretax income was 8% for the quarter, and our return on equity was 9%. During the quarter, we generated $103 million of EBITDA compared to $157 million in last year's third quarter. And our effective tax rate was 23% in the third quarter compared to 24% in last year's third quarter. Our earnings per diluted share for the quarter decreased to $2.56 per diluted share from $3.92 last year. And our book value is now a record $130 per share. With that, I will turn it over to Derek J. Klutch to address our mortgage company results. Derek J. Klutch: Thanks, Phillip. Our mortgage and title operations achieved pretax income of $13.4 million compared to $16.6 million in 2025's third quarter. Down 19% Revenue decreased 5% from last year to $32.7 million due to lower margins on loans sold, a lower average loan amount, and a slight decrease in the number of loans originated. The average loan to value on our first mortgages for the third quarter was 84%. Consistent with 2025's third quarter. 63% of the loans closed in the quarter were conventional, and 37% FHA or VA. Compared to 55% and 45%, respectively, for 2025's third quarter. Our average mortgage amount decreased to $403 thousand in 2026's third quarter compared to $406 thousand last year. Loans originated decreased to 1.83 thousand loans, which was down 1% from last year while the volume of loans sold decreased by 5%. Finally, as Bob mentioned, our mortgage operation captured 96% of our business in the third quarter. This was up from 93% last year. Now, I will turn the call back over to Phillip. Phillip G. Creek: Thanks, Derek. Turning to the balance sheet, our financial position continues to be very strong We ended the third quarter with no borrowings under our $900 million credit facility. And had a cash balance of $620 million. We continue to have 1 of the lowest debt levels of the public homebuilders, and are well positioned with our maturities. Our bank line matures in late 2030 and our public debt matures in 2028 and 2030. Our unsold land investment at September 30, 2026, is $1.9 billion compared to $1.8 billion a year ago. And at September 30, we had $853 million of raw land and land under development and $1.1 billion of finished unsold lots. During the third quarter, we spent $135 million on land purchases and $155 million on land development. For a total of $290 million. At 090 lots and controlled 49 thousand lots. At the end of the quarter, we had 721 completed inventory homes, and 3.24 thousand total inventory homes. And of the total inventory, 1.04 thousand are in the northern region, and 1.9 thousand are in the Southern Region. Last year at 09, we had 776 completed inventory homes, and 3 thousand total inventory homes. We spent $50 million in the third quarter repurchasing our stock and have $200 million remaining under our current board authorization. Since the start of 2022, we have repurchased 21% of our outstanding shares. This completes our presentation. We will now open the call for any questions or comments. Operator: As a reminder, if you would like to ask a question, please press *1 on your telephone keypad. Your first question comes from the line of Alan Ratner with Zelman and Associates. Please go ahead. Alan Ratner: Hey, good morning. Thanks for all the detail and taking my question. Robert H. Schottenstein: Thanks, Alan. This is Bob. Good to talk to you. Likewise. Alan Ratner: You know, you guys have been probably 1 of the most nimble builders over the last decade or so in terms of making some modest adjustments to your business model and strategy based on market conditions You know, I am thinking, obviously, the growth in the Smart Series and kind of adjusting the spec mix based on market conditions. We have been in a challenging market for a while now, but it sounds like things have kind of taken another leg down this quarter with not much certainty or outlook for improvement in the near term. So I am curious whether this more recent leg down and the move higher in rates is causing you to maybe think through the strategy heading into 2027 and just thinking through your model, whether it is the mix of your business at spec versus BPO or price point or just strategy? I am curious if you are kind of making any adjustments or beginning to think about making any based on the current market reality. Robert H. Schottenstein: that is a great question. You know, the first thing I want to say is you cannot know what you do not know. Right? I mean, sorry for you know, saying something so obvious. But at the beginning of this year, I do not know if too many people that predicted that we would see not only the kind of rate movement that we have seen, which has trended considerably up rather than flat or down, But I do not think anyone believed or even had in their crystal ball that there would be a war beginning at the end of the first quarter and that has it has continued now for 6 months. And all of the related economic impacts that it has had, which I think have impacted in a negative way consumer confidence. But that is been well documented. You have written about it as articulately as anyone. Having said all that, in good time and in bad, I think that-- and I did not always know this, but it could not be clearer to me today as it-- maybe it was not as clear 20 years ago. But in good time and in bad, there is no financial piece of paper that is more important than your balance sheet. And when things are more challenging, the importance of the balance sheet becomes more and more important. Not because you think, you know, that we are about to enter a tsunami or some hundred year flood or something. But because you have to be prepared to deal with unexpected things like we have sort of seen happen this year, I do not think the sky is falling. I do not believe that. Nobody knows for sure. I still think that there is so many positive underlying fundamentals that support the long term health and vitality of the homebuilding industry. We are not gonna start selling a bunch of land. We have got a great land position. Are we going to be more careful about new deals? Yes, we are. But we control enough land both on and off of our books to be able to manage whatever come what may. We are not gonna make any material changes Maybe in a few markets, we might adjust our product mix a little bit company wide. I do not see us making a lot of material changes to that. there is a bit of a lead time associated with that anyway. I think we have a great strategy. And I think that we have been doing the right things So it is easy to say execution matters. We are not perfect. We do not do everything A+,, but we do a lot of things really well. You know, the 96% capture rate in our mortgage operation yet another. it is highest in the industry. That we did-- it is-- that is not dumb luck. A year ago, it was 93%, and that was the highest in the industry. pay a lot of attention to sales training more than ever More sales training going on in our company today than at any time in our 50-year history. And that did not just start when rates went up 100 basis points. that is been going on since the beginning of the year. Because you have to keep getting better. And I love the way we think about land. We were 1 of the few builders that was never romanced into doing land banking and a lot of off balance sheet stuff. Maybe we should have. I do not know. But I like that we control it. And I like that we are not paying the premium for it. And I am liking that our best deals are not potentially cross-collateralized with a land banker who may be looking to call a bad deal. My point is you know, we have our hands firmly on the rudder. If we do not go in the right direction, it is our fault. But we are really intensely focused on what we can control and our customer service scores are the highest in company history. Our home readiness scores, has to do with the completeness of the home, at the time of closing, are the highest in company history. This is all third party tabulated. Our Google review scores across all of our divisions are the highest in company history So when you talk about execution and focusing on controllables, there is a lot to really feel good about. But this is a-- these are tough conditions. You know? July conditions were a whole lot better than September, and August was a whole lot better than September too. But I do not see any reason for some radical change. Yeah. We are gonna watch new hiring. We are gonna control expenses. You know, we are gonna do all the things that my guest, most of our peers are gonna be doing right now as well. as we are dealing with all these uncertainties But I do not think the sky is falling. And I could not be a-- home building is a cyclical business. This is not your first rodeo either. You have seen the cycles. Maybe we are due for a bit of 1 because things have been pretty good for quite some time. But I would not want to be any other builder. I would not want to be anywhere else. I love our geographic footprint. You know, there is times when Florida is a lot better than the Midwest. And there is times when Texas is the strongest. You know, and these things come and go and go up and down. But in balance, we have got a very dominant position in the Midwest, a tremendous position in the Carolinas,, you know. Florida is a little bit of a struggle right now, particularly the West Coast. But remain extremely bullish long term on Florida. And Dallas and Houston remain 2 of our best operations out of our 17. So, you know, just trying to tell it like I see it. Phillip G. Creek: And, Alan, 1 other thing I would add, I would sure echo what Bob says about how much execution matters. Obviously, having a really, really strong clean balance sheet, having a lot of liquidity is really important. So we continue to always focus on that. We have kind of reduced starts a little bit. You know, due to market conditions. You will see that our spec levels a little over 3 thousand in total. And our finished spec levels being in that, you know, 700 range is pretty much flat where it was a year ago even though we do have 5% more stores. So we are not trying to force anything, because demand, you know, is an issue. But, again, we will just continue trying to, you know, block and tackle better than others. Alan Ratner: Very helpful. Thank you very much for all the color. Thanks, Alan. Operator: Your next question comes from the line of Buck Horne with Raymond James. Please go ahead. Buck Horne: Hey. Good morning, guys. Appreciate all that color. Very helpful. Yeah, wanted to follow-up a little bit on-- Robert H. Schottenstein: Good morning. Buck Horne: To follow-up kind of on what you are seeing in you mentioned the West Coast Of Florida. It looks like at least in early October, you guys have made some more significant pricing adjustments on some quick move-in homes, particularly in Tampa and Sarasota. Maybe follow up on kind of how Florida is trending in general for you and how you think those pricing adjustments will take? And are you making any more significant either incentive adjustments or pricing adjustments in other regions in October? Phillip G. Creek: Buck, as Bob said, you know, Florida and Texas you know, have been a little more challenging in general, you know, than the Midwest and The Carolinas have been. We have had a very, very strong operation in Florida, especially for years. Orlando has actually held up, you know, pretty good for us. Tampa, you know, Sarasota had been a little more challenging. We obviously make, you know, adjustments on a community basis. Periodically as we need to. And we are excited about our. You know, still a little bit of a start up operation in Fort Myers in Naples. But I would not say we are doing anything you know, significantly. You know, again, it is kind of a subdivision by subdivision situation. You know, if you just look at our you know, new contracts, you know, in the third quarter, Actually, you know, compared to the prior year, you know, Sarasota was up. You know, Tampa was down a little bit. You know? So it is kind of a little bit of a mixed bag in Florida. But overall, it still continues to be challenged. But you know, we still feel really good about our leadership teams and really good about our opportunity there. Robert H. Schottenstein: The only thing I might add Fort Myers Naples, exceeding our expectations. We are off to a very good start there. And, obviously, it is it is a relatively new division for us. But very optimistic about that. I just wanna underscore, we probably have 1 of the best teams in our company in Tampa. So whatever the market may come, I have got tremendous confidence that we will figure it out. Buck Horne: No. Appreciate that. Yeah. And go Rays, right? So 1 quick 1 on labor availability. It seems like there is been a lot more discussions about, you know, whether it is immigration enforcement activity or just other complications with you know, getting crews out to job sites on time. Are you seeing any effects of labor availability or immigration enforcement so far here in the through the third quarter? Phillip G. Creek: You know, in certain markets, and it seems to kind of come and go You know, we have issues with ICE and those type issues. Overall, you know, we feel good about where we are. We do have a few more houses in the field, today than we did a year ago. We do desire to grow. We talked about, you know, community count being up, you know, 5% at the end of this year. From a land position, you know, we could be doing. And I think also from a labor standpoint, we could be doing, you know, probably 1 thousand or 1.5 thousand more homes a year if the demand was there. that is the biggest issue we have right now. So I would not say that, labor is a huge issue. You know, from a cost standpoint, you know, especially with all the gas increases and diesel and land develop and those type of things, we feel pretty good about our, construction costs and land development costs have continued to be pretty flat. So we continue to, you know, focus on all those blocking and tackling things, Buck. And wish we were making more progress, but, you know, we feel pretty good about what we are doing. Buck Horne: Appreciate the color. Sounds like you are doing a great job under the circumstances. Alright. Good luck, guys. Phillip G. Creek: Thanks, Buck. Operator: Your next question comes from the line of Jay McCanless with Citizens Bank. Please go ahead. Jay McCanless: Hey. Good morning, everyone. Phillip G. Creek: Hey, Hey. Jay McCanless: So on the SG&A, could you talk about how much-- were there any onetime items in there? Or is that just where the level is now with the higher community count? Phillip G. Creek: You know, Jay, as we said, our SG&A expenses were up about 5%, you know, which is similar to community count. You know, for every community, in general, you have a couple more salespeople. You know, you have construction people, etcetera. So in general, that community count increase, does increase that. Are we spending a little more money on the advertising promoting side, yes, we are. But the biggest issue is just, you know, the impact of increased community count, which you know, we have talked about. You know, we sure like to increase that community count, you know, 5% to 10% a year is kind of our goal. Been able to do that the last couple years and this year. Okay. Jay McCanless: And then the next question I had, you know, you guys gave a lot of useful commentary about shifting into more move up product last quarter. I guess, could you talk about what the numbers were? and I think you gave them already, but maybe talk about what the numbers for move up were this quarter and kind of following on Alan's question, are you guys looking to pivot more into move up into 2027 than what you did in 2026? Phillip G. Creek: You are talking about the move up buyer categories that we are talking about? Robert H. Schottenstein: Communities. Yeah. I mean, I did not follow Buck, Jay, I did not follow the question. Phillip G. Creek: Will you reask it? Jay McCanless: Sure. You know, last quarter's conference call, you guys talked about shifting into more move up communities, focusing more on the move up buyer Could you talk about what you are doing this quarter? But then also, kind of following on Alan's question, are you looking for ways to maybe change that mix of move-up communities in 2027? Robert H. Schottenstein: Not really. what is in place in select markets and I am not gonna mention which ones because there is no reason to. But in select markets, we. There is a greater emphasis on more move up than first-time. That began probably 3 to 6 months ago. And that will continue. So nothing has really changed in the last couple of quarters In many of our markets, we have a very good mix right now and I do not see it changing much. But clearly, in 2 or 3 or maybe 4 of our markets, we are shifting the mix a little bit more towards the move up. That. that is already underway. it is playing out as we speak. And you know, that is that is not a change during the third quarter. That was something that we started earlier this year. And these were markets where over 75% of our business was first time We never really felt great about that even before the move up became more in vogue. We always felt you know, sometimes things just sort of end up a certain way. I never want too many eggs in 1 basket Because we do not have to do that. We are not going to. Jay McCanless: Got it. And then the last question I had, just could you talk about what the incentive levels were this quarter and how they are trending to start the fourth quarter? Phillip G. Creek: Well, obviously, our margins, have been going down. And as Bob said, you know, we primarily use incentives in mortgage rate buy downs. Every community is a little different. You know, as far as. Especially with first time buyers, they tend to need, you know, more help also with closing costs. I think also 1 of the things in the marketplace right now in general is I think, you know, the first thing all buyers expect is a reduced competitive interest rate and you are seeing in certain markets a little more price reduction, So it is kind of hard to figure out, you know, all the different breakdown of incentives. Incentives definitely did increase as we went through the quarter. But, again, it is just a community by community standpoint. you know, we are having customers go a little bit more toward ARM products now. Than they were before. But that is something that is just always changing that, you know, we just have to deal with, and we track that every day and work on it every day in every community. Jay McCanless: Okay. Great. that is all I had. Thanks, guys. Phillip G. Creek: Thank you, Jay. Operator: There are no further questions. I would now like to turn it back to Phillip Creek for closing remarks. Phillip G. Creek: Thank you very much for joining us. Look forward to you next quarter. Operator: This concludes today's conference call. You may now disconnect. Before you buy stock in M/I Homes, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and M/I Homes wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. M/I Homes (MHO) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

KB Home (KBH) came out with quarterly earnings of $1.05 per share, beating the Zacks Consensus Estimate of $0.88 per share. This compares to earnings of $1.61 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +19.32%. A quarter ago, it was expected that this homebuilder would post earnings of $0.43 per share when it actually produced earnings of $0.43, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. KB Home, which belongs to the Zacks Building Products - Home Builders industry, posted revenues of $1.3 billion for the quarter ended August 2026, surpassing the Zacks Consensus Estimate by 0.42%. This compares to year-ago revenues of $1.62 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. KB Home shares have lost about 15.2% since the beginning of the year versus the S&P 500's gain of 13.4%. While KB Home has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for KB Home was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.44 on $1.59 billion in revenues for the coming quarter and $3.27 on $5.07 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Home Builders is currently in the bottom 5% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, M/I Homes (MHO), has yet to report results for the quarter ended September 2026. The results are expected to be released on October 21. This homebuilder is expected to post quarterly earnings of $3.05 per share in its upcoming report, which represents a year-over-year change of -26.3%. The consensus EPS estimate for the quarter has been revised 3.2% lower over the last 30 days to the current level. M/I Homes' revenues are expected to be $1.09 billion, down 3.3% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KB Home (KBH) : Free Stock Analysis Report M/I Homes, Inc. (MHO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research