Meritage Homes Reports Q2 Earnings Amid Slower Sales
Meritage Homes (NYSE:MTH) reported weaker second-quarter results, with home orders falling 9% year over year to 3,575 units. Despite this decline, the company achieved $1.4 billion in home-closing revenue and an adjusted EPS of $1.42. Management noted stable demand but cited affordability pressures, higher interest rates, and increased incentives as factors affecting sales performance. Meritage reduced finished-home inventory by 27% and saw a sequential improvement in direct construction costs per square foot, contributing to better gross margins. However, reported gross margin declined year over year due to lower revenue leverage and rising land costs. The company raised its full-year closing and revenue expectations but still anticipates results roughly 5% below those of 2025. Meritage returned $131 million to shareholders in the quarter through buybacks and dividends, with plans for at least $55 million quarterly repurchases for the remainder of 2026. The company also highlighted regional variations in demand, noting stronger performance in certain markets like Texas and Southern California compared to weaker areas such as Orlando and Denver.
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