Meritage Homes Corporation reported first‑quarter 2026 results on April 22, 2026, with home‑closing revenue of $1.1078 billion, a 17% decline from the $1.342 billion recorded in Q1 2025. The company’s diluted earnings per share were $0.82, down 51% from the $1.69 EPS posted in the same quarter last year. Both revenue and earnings fell short of consensus estimates, which were $1.18 billion for revenue and $0.98 for EPS.
The miss was driven by a combination of macro‑economic headwinds and internal cost pressures. Elevated mortgage rates and consumer affordability concerns reduced demand, while higher lot costs and increased incentive utilization eroded gross margins. Gross margin contracted to 17.5% from 22.0% in the prior year, a 450‑basis‑point decline that directly impacted profitability. The company’s net‑sales‑per‑month absorption rate fell to 3.6 from 4.0 in Q1 2025, reflecting a 10% drop in market activity.
Management highlighted the challenges in its earnings call. Executive Chairman Steven J. Hilton noted, "With the spring selling season commencing this quarter, we experienced some improved demand, achieving an absorption rate of 3.6 net sales per month and sales orders of 3,664 homes. However, these results were below our expectations as 2026 began with a severe winter storm in January and then transitioned into military operations in Iran midway through the quarter, which negatively impacted consumer sentiment and mortgage rates." CEO Phillippe Lord added, "We leaned into our strategy again this quarter, focusing on what we can control. We are proud of another year‑over‑year improvement in our cycle times driving 2,967 closings this quarter, and, with nearly 70% of these deliveries coming from intra‑quarter sales, a backlog conversion rate of 254%."
In light of the results, Meritage updated its full‑year 2026 guidance, projecting home‑closing volume and revenue to be at or within 5% of 2025 levels. The cautious outlook signals management’s concern about ongoing market softness while maintaining confidence in its operational discipline and balance‑sheet strength. The earnings miss and margin compression underscore the company’s exposure to macro‑economic volatility, but the guidance suggests a focus on steady performance rather than aggressive growth.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.