DR Horton (DHI) Q4 and FY21 Cropped view, supply issues exist – September 21, 2021



DR Horton, Inc. (DHI Free Report) lowered its guidance for the fourth quarter of fiscal 2021 for closed homes, consolidated revenue and gross margin on home sales. The company has witnessed significant supply chain disruptions, including shortages and delays in delivery of some building materials, as well as a tight labor market.

He now expects homes in the fiscal fourth quarter to be closed between 21,300 and 21,700, against 23,000 to 24,500 expected earlier. For the full year 2021, the company expects the number of closed homes to increase by 24-25% or 81,300 to 81,700 from 83,000 to 84,500 forecast earlier.

Due to reduced closing volume, partially offset by an increase in the average sale price of closed homes, DR Horton now expects revenues to be between $ 7.7 billion and $ 7.9 billion from the range. previously projected from $ 7.9 billion to $ 8.4 billion. It now expects revenue for fiscal 2021 to grow 35-36 percent from a year ago, to $ 27.4-27.6 billion, from a previous forecast of 27. , 6 to 28.1 billion dollars.

Nevertheless, the gross margin is now expected between 26.5 and 26.8% for the fourth fiscal quarter against 26-26.3% expected earlier. The upward trend in gross margin expectations is primarily supported by strong demand for new homes and limited housing supply which supports pricing power across most of its operating footprint. The mixed trend in housing fundamentals will likely have a limited impact on DR Horton’s fiscal profits in the fourth quarter.

For fiscal 2022, he expects closed homes to grow at a double-digit percentage rate.

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On September 20, DR Horton and other industry greats like PulteGroup, Inc. (MPS Free report), Lennar Corporation (LEN Free report), and Toll Brothers, Inc. (TOL Free Report) fell significantly after the release of homebuilder confidence data by the National Home Builders Association (NAHB) / Wells Fargo Housing Market Index (HMI) for September, which rose by one point to 76 from in the previous month. NAHB President Chuck Fowke noted that delivery times remain elongated and that the chronic labor shortage in construction is expected to persist as the global labor market recovers.

That said, DR Horton – who belongs to the Zacks Building Products – Home Builders industry and holds a Zacks # 3 (Hold) rank – remains optimistic about the outlook for the industry, given the strong demand for single-family homes, falling material prices as well as low interest rates.

You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

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