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Hovnanian reports 14.6% gross margin in Q3 2026
The homebuilder said it expects gross margin to rise to 15.8% at the midpoint in Q4, supported by a bigger share of deliveries from newer communities.
Hovnanian Enterprises reported gross margin of 14.6% for Q3 2026, citing a challenging macro backdrop that included high mortgage rates, inflation, and geopolitical uncertainty.
Management said the quarter reflected a sequential recovery from a first-quarter trough, driven by the gradual burn-through of older, lower-margin land inventory.
The company reported sales pace of 9.4 contracts per community and is executing a portfolio transition from older land positions toward newer communities underwritten for current market conditions.
For Q4, Hovnanian’s guidance assumes stable market conditions, with gross margin expected to improve to 15.8% at the midpoint as newer communities make up a larger portion of deliveries; the company also pointed to delivery delays at a new unconsolidated joint venture that contributed to adjusted pretax income finishing slightly below guidance for the first time in 23 quarters, according to the Yahoo Finance earnings call summary.