What happened
D.R. Horton, Inc. (NYSE: DHI) raised its quarterly dividend to $0.50 per share and set a fiscal 2027 outlook below this year's results. The homebuilder is paying holders more while guiding revenue to $30.0 billion to $32.0 billion, against $33.0 billion in fiscal 2026.
The 11% dividend increase is payable Nov. 19 to stockholders of record Nov. 12. Management said fiscal 2027 will be its thirteenth straight year of dividend growth.
Fourth-quarter net income fell 18% to $741.8 million, and diluted earnings per share fell 12% to $2.67. The quarter included $91.4 million of inventory impairment charges in the rental segment, tied to nine multi-family rental projects. For the fiscal year ended Sept. 30, net income fell 19% to $2.9 billion and diluted earnings per share fell 13% to $10.11.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Fourth-quarter net income attributable to D.R. Horton | $741.8 million | from $905.3 million, -18% | SEC 8-K Exhibit 99.1 |
| Fourth-quarter diluted earnings per share | $2.67 | from $3.04, -12% | SEC 8-K Exhibit 99.1 |
| Fourth-quarter net sales orders (homes) | 18,619 homes | from 20,078 homes, -7% | SEC 8-K Exhibit 99.1 |
| Fiscal year consolidated pre-tax profit margin | 11.8% | from 13.8%, -2.0 percentage points | Calculated from SEC 8-K |
| Quarterly cash dividend per share | $0.50 | +11% | SEC 8-K Exhibit 99.1 |
| Fiscal 2027 consolidated revenue guidance | $30.0 billion to $32.0 billion | from $33.0 billion | SEC 8-K Exhibit 99.1 |
Read more: D.R. Horton (DHI) company research
Demand softened in the fourth quarter
Orders show the turn. Fourth-quarter net sales orders fell 7% to 18,619 homes and 9% in value to $6.6 billion. The cancellation rate rose to 23% from 20% a year earlier. Homebuilding revenue slipped 2% to $8.4 billion on 22,915 homes closed, also down 2%.
The full year looked steadier. Orders rose 2% to 84,995 homes and were unchanged in value at $30.9 billion. Homebuilding revenue fell 3% to $30.7 billion, and homes closed fell 1% to 84,202. Backlog at Sept. 30 was 11,714 homes worth $4.46 billion, up from 10,785 homes worth $4.12 billion a year earlier.
Executive Chairman David Auld said rising mortgage rates, affordability limits and cautious consumer sentiment continued to weigh on new home demand. The company is adjusting incentives, pricing and starts community by community. It expects incentives to stay elevated in fiscal 2027.
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Margins, cash returns and the balance sheet
Volume held up better than profit. Homebuilding pre-tax income fell 17% for the year to $3.4 billion, a margin of 11.2%. The fourth-quarter homebuilding margin was 10.6%. The consolidated pre-tax margin was 11.8%, down from 13.8% a year earlier by OptimistFi's calculation from the income statement.
Shareholder payouts stayed large. The company returned $4.1 billion through buybacks and dividends. It bought 24.0 million shares for $3.6 billion and paid $513.3 million in dividends. Shares outstanding ended at 271.4 million, down 8%, and $4.7 billion of buyback authorization remains. Book value per share rose 4% to $85.14.
Cash fell to $2.06 billion from $2.99 billion a year earlier. Total liquidity was $7.2 billion and debt to total capital was 20.8%. The company repaid $600 million of 1.3% senior notes at maturity in October 2026. It has no other senior note maturities in fiscal 2027.
What the fiscal 2027 guidance sets
The company expects to close 79,000 to 84,000 homes in fiscal 2027, so even the top of the range sits just below this year's closings. It guides to an income tax rate of about 25.5%.
Cash plans are steadier than the sales outlook. Management guides to operating cash flow of about $3.5 billion, share repurchases of about $3.0 billion and dividend payments of about $500 million. The planned buyback is below the fiscal 2026 pace.
Why it matters
OptimistFi has argued that D.R. Horton creates value if its national scale keeps affordable homes moving without giving back too much margin or cash. This filing supports the volume half and strains the margin half. Closings and annual orders stayed near last year's levels, while profit and margins fell and incentives are set to stay high.
The caution comes from management, which said conditions became more challenging in the fourth quarter. Cancellations rose and the rental segment booked impairment charges in the same quarter. Backlog growth gives some cushion. But fourth-quarter orders fell while full-year orders rose, so the exit rate is weaker than the annual figure suggests.
What's next
D.R. Horton said it would give first-quarter fiscal 2027 guidance on its conference call on Oct. 29 at 8:30 a.m. Eastern. It plans to report first-quarter results before the market opens on Jan. 19, 2027.
A cancellation rate that eases from the fourth-quarter level, with orders holding, would support the scale-and-cycle case. Higher cancellations or deeper incentives would weaken it.
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Sources
- D.R. Horton fourth quarter and fiscal 2026 earnings release (SEC 8-K Exhibit 99.1) — Earnings release dated Oct. 29, 2026 with results, dividend, fiscal 2027 guidance and financial statements.
- D.R. Horton Form 8-K — Item 2.02 current report furnishing the earnings release.
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
