Tuesday, April 28, 2020

Lawler: D.R. Horton: Order Decline Not as Bad as Feared So Far in April

by Calculated Risk on 4/28/2020 03:33:00 PM

From housing economist Tom Lawler:

Below is an excerpt from D.R. Horton’s earnings press release from earlier today:

“The Company has experienced increases in sales cancellations and decreases in sales orders in late March and to date in April as compared to the same period in the prior year. Month-to-date in April 2020, the Company’s net sales orders are approximately 11% lower than the same period a year ago. This month-to-date net sales trend may not be indicative of the net sales results that may be expected for the full month of April 2020, because a significant number of sales contract cancellations typically occur in the final days of each month, which can significantly affect net sales orders for the full month. As of the date of this report, the Company’s weekly net sales order volumes in the most recent two weeks have increased as compared to the preceding four weeks.”
D.R. Horton’s YOY sales decline so far in April is much smaller than some other larger builders have experienced, with the company attributing some of the “less-than-expected” drop in orders to its inventory of affordably priced homes, and especially its inventory of move-in ready “spec” homes, as well as its increased used of concessions that if often deploys during periods of weak demand.

A recording of the company’s conference call is available on its investor relations website.

D.R. Horton YOY % Change in Net Orders
Jan-Feb 202027.3%
March 20205.9%
YTD April 2020*-11.0%