KB Home is the latest home builder to acknowledge a slowdown in the market for new homes. Zacks Investment Research reports:
Shares of KB Home (KBH - Free Report) decreased 15.3% yesterday, after the company trimmed its guidance for fourth-quarter fiscal 2018. It also underperformed the industry in a year’s time. The stock has lost 38.8% compared with the industry’s 32.7% decline.
For fourth-quarter fiscal 2018, the company expects revenues to be between $1.31 billion and $1.34 billion, down from the prior estimate of $1.39 billion and $1.45 billion. This downside can be attributed to decrease in deliveries in Texas, lower-than-expected spec sales and potential delayed closings in California due to wildfires.
Moreover, rising labor costs might mar KB Home’s growth prospective as it limits home builders’ pricing power. Also, land prices are increasing owing to limited availability. The recently imposed tariff on imported steel and aluminum is an added concern.