Lennar (LEN) 15 Mar 232023 Q1 Earnings call transcript

Welcome to Lennar's First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's conference is being recorded.

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to reading call of like Collins to now the for the would turn over the David I forward-looking statements.

good including business, and include and prospects. operations, you, morning, conference strategies Today's Thank call cash forward-looking flows, statements, condition, statements financial Lennar's regarding results of everyone. may

yet Forward-looking only forward-looking that to as actual on results. Because Lennar's these the conference matters of this occurred, assurance statements and give are inherently not risks any relate are represent statements have to uncertainties. call and not estimates subject date intended statements to future to

may Many differ Lennar's factors and could and statements. affect future the described from include activities results results to release and in results factors in earnings forward-looking cause These or the the SEC. to activities anticipated note no actual materially including Factors on update those statements. our Risk any report annual assumes under contained Please with XX-K Lennar's SEC most filed forward-looking obligation Form filings caption that Lennar recently in those our

introduce I Chairman. would now like begin. your host, you may Sir, Stuart Executive Miller, Mr. to

with our Co-CEO Thank Co-President; everyone. Co-CEO Chief here and us for morning. Financial from, are as this Lennar and of Collins, Bruce just us Beckwitt, Miami Thank Jon Gross, by here you, in CEO executives Co-President; Jaffe, morning, joining I'm and Bessette, our our you you well. Diane Vice joined heard Officer; David who good and Controller Rick our and There President; Financial other and Services.

then and and construction markets is give is country update comment cost, to company. my Rick After usual, the time. a going strategy, our to supply and land going the of our through introductory I'm macro chain and on As going cycle strategic Jon to overview walk remarks, around

limit to not Diane will quarter given we usual, just for foundries possible. yourself one and and questions can guidance, And follow-up we'll to in boundaries, give modeling. highlights usual, we rough the the can. so as many please question we'll in second And give answer assist many forward as that market volatility as as As then one some thinking and financial as include additional

rising go by begin pleased the of first confidence, with moving up produced then margins, and consistent only declining stalled improving let due adjustments. saying although strong entered results So what that incentives complicated to and the and energized February with prices, for sales with to closed and remained price report interest has and December team is and sales relatively and adjusted consumer We and and quarter customer started me quarter challenging was we're a Lennar be rates again in strong out XXXX. volatile January with shaping rates traffic slowing. that The traffic ahead as

new are Of weeks and for added course, and of issues ended reflective have looking couple stability. past market and a quarter questions that a that bottom looking is of the the for

with certainty trying simply With inflation, next. reconcile rate corners to and order no what the interest Federal aggressive the comes unintended way see from anticipate consequences Reserve curb to and Federal in there the Government hikes around is to

as we This is and volume using endure. of as core flow. that of and constant exactly incentives production with strategy our strong we deteriorate, while generate improve, are price to conditions With cash been on the cash flow. we volatility and but and/or operating stay also focused volatility strong through kind our margins If built and incentives, shock compromise price has margin and maintaining we sales through generating margin absorber, manage mission. bottom certainty volume market our conditions improved line If

flow. focus primary Our cash on is

we as flattish deliveries primary date. headwind XXXX have the rationalizing limited continued a we production have sales displays of machine strategy. and fact to prices costs. activity rates keeping while the the strength which are to concerns at our number to legacy that to be have, Reserve's volume Interest working legacy the move actions maintain versus efficiently land that of We And projecting our is inflation in the through XXXX our dominated Federal

especially worked same drive discussed the time, to At by country the wallet governor their purchasers and and stretch housing the meet half price incentives every supply mayor continues workforce reductions shortage, housing, across to way. every customers as have to

rates interest have institutional single-family rent financially have as purchasers. attractive purchase costs, of with higher rates or sidelined the Higher professional for homes made also Additionally, less capital together the well. capitalization

point rapidly of shock have prices mellowed. been XXXX beginning cost And are normalizing sudden stabilization with With coming cancellations beginning the interest to are that primary normal net margins in The acceptable of reductions higher rising that rates. incentives both and lower, customers, while an is said, we offset. institutional of still the new housing and find has are and interest grips been provide as market believe are a but to sticker moderating, have rates bottoming to lower

a reduction be single-family housing starts As market the current stabilizing and time. I many of factor both said growing the decade-long theme the deficit the will by defined a the remains in dominant by after in and country recession. recession. shortage housing brought shortage on have great This a housing in overall deficit production past, housing should over by for exacerbated multifamily times a is homes This be the

approximately steadfast the in backdrop, ago. as remained began our program tightening this Fed adherence Against to the strategies one adopted year its we've we

country, at and for for prices spite that affordability to selling to In focus shortages on dwellings purchase more housing supply-constrained interest higher I concerns, state we've across of while said, our a the a noted, meet are major a As clearing homes rates levels. building particularly to is needed or market. needs local of driving pace meet consistent as and market rent, concern mission the need. at continued are housing Whether

our In the prior saw adjustments XX.X%, margins fall sales first from quarter, we to to and quarters backlog. reflecting

and buy-downs, prior closing protect is to adjusting to and XXX our cost the as and volatile shifts. of the quarter to points basis incentives points We ensure over price and used closings. that by reflected to incentives they tools interest payments basis sell both XXX and interest fell well backlog margins offset year-over-year, as While rate reductions rate market these homes use pricing

first to quarter XX.X%. Our rate cancellation improved

is higher falling is XX.X% year, than quarter consecutive this last the month. been decidedly the each than While has in lower it XX% last and

start and While for our that homes a enables our of to XX% to reported that were the some to a increase favorably us pace maintain market expected year-over-year, range XX,XXX new has XX,XXX to orders enabled delivered. closings down strong result to us year compared conditions

the the inventory leads supply low factors to growth and home the the hold very extend believe homeowners will On industry on as middle also production inventory resolve. exists decade production fairly a with as shortfall for existing correction combined positive extremely exists, short what note, an longer-term to very of limited be the we existing housing rates without housing home These will and mortgage the limited multifamily past over duration chronic overhang in runway a new correction limited develops.

than We marketing, derive investment sales growing in achieve prices confidence our more in is possible our ability digital from before. ever relevant best at which to significant the

digital pricing marketing We at in and to prices consistent with in formidable model maintain order have our conjunction marquee volume dynamic improving sales to platform clearing drive production used to continue our levels.

that using while on insights and dynamic built platform, Microsoft DIGITS us we digital pricing pricing backbone, maximizing guide marketing a provides analytics better proprietary Our to execution model. our which

more digital accumulate marketing our getting quarter data effectiveness and each we they team and as and to our refine better pricing improve and experience. are enable Our dynamic execution better more team us and and

-- construction we we Our chain to trade in with right-size second current cost a partners our make meaningful high Jon re-establish maintaining our conditions but to consistent at strategy they to was long-term partners level our market production. great strategy will as our time pre continue work our progress shortly, supply cover to this of structure appreciate cycle levels. at trade crisis detail with while

Relative costs, market market in share volume the led construction way -- while maintaining and margin a as corrected. to the has increasing with reduction with reducing Lennar

now trade our contracted, As are participation our from margins reduction have partners. cost driving we

reduce side-by-side the working Our trade costs working. keep and to machine us to with partners are production

While will of year, in of reported will lag the continues Cycle reductions in time a our coming half numbers, through reductions margins. back the through the reductions year. back half be lagging there come in to improve also cost those the

cycle quarter, this While last in production increased time reflects timing days has slightly from XXX that this XXX to days homes been eight almost have months. quarter for

return more coming through, cycle the reviewed we we've know time front our to and seeing reduce that we hit two-week improve will now next inventory over at have accordingly, will our and While will Improved the of stands already end turn, inventory on less to improve are reduction for homes as inventory and that quarters. carry a X.X construction deliveries; started recently, our inventory will help we as well. we'll improve be able which

land strategy acquisitions. land articulated was our third Our to attention and on sharpen

While Rick reduced therefore of this will recognized and all across focus that early land our area us, for and on three myself, platform. be prices, land of would has relative been Rick the a stopped give We specific detail early. strategy, Jon, expensive to concentrated the we bleeding

very as is walked and await home reconsidered margin this in or and today's in renegotiated we only protecting While focusing in purchased strong price, pipeline, we land have deposits that purchasing our We been more current at market we from on relentless pricing line the terms we every land quarter with next prices. sale and deal cash better have pricing. little

improve New lagging time purchases land in margins. will

and positioned capital are managed constructively. allocation that with enable to contracts well shorter-term we be well-structured our structures Fortunately, deal

maintaining reduction increasing to our home market They just land our to will cost are move have taking partners, margin. trade together given us with work or hit that our with first and sellers need share volume lower own prices, in sales we'll we understand on. As while partners where to the

was will quarter-by-quarter SG&A a strategy gross We've hardwired operating and that our margin. lower to been our margins, of at driving our are over those though so the all, to we years net playbook new past not fourth many strong even down Our SG&A costs, lows manage changes, record drive

X.X% drive believe the were won't first down, limit And we'll prices without average volume, our we and be to increases continue we come marginally X.X% last SG&A corresponding percentages to able manage Nevertheless, we hold sales to In cuts. to if cost as quarter, year. additional to levels. able improve advantageous from

some offsetting intense on cost in In and drive and regard, our important find pressure of realtor be our many and is of also earlier times, costs will order potential these new our digital this more of platform discussion in know that upward to drive on critically in marketing We purchasers increases. the focus and sales there sales. difficult marketing

focus inventory exactly and we're machine, control. flow this control our which billion in business and Our XX.X%, are is together XX.X% X% what playbook revolver, first and our in elements our billion -- of can cash first overall capitalization drives together cash and numbers, provides leadership to XXX last down focus tight home every $X.X core focusing team. see strategy land fifth our -- position, business is basis excellent our liquidity our our points inventory on our year's cash $X.X of a quarter quarter And This maintain from day. and flow Both on our debt-to-total and these and is with which part rate, you undrawn in flexibility.

Inventory flow reviewed of business completed extremely low most maintain have we us most net per at control this and part which -- inventory home reviewed completed, the been carefully carefully consistently home completed sold is And point. at and are consistently right enables our is debt actually and has been community of now, capital under to negative an and managed have of homes. the so X,XXX Tight total that cash years. one past enabled as our approximately or land homes, inventory which not and to unsold for management

because well one inventory We chain to lower flat that due time to remained disruption. as expect, as of expanded year-over-year are opposed the cycle supply aware has might

few cash. turn We also additional $X.X and the correct and it this of quarters will inefficiency know will over billion inventory that into approximately next return

year as pause this year growth additional over generate the cash inventory well. a next reduce Additionally, will and in

continue in that focus flow and complement stock order total our our protect to to balance sixth execution and reductions able balance operational strong, returns extraordinary to shareholder is strategy on strong sheet and With equity. our The debt with line we already repurchases improve return on sheet. and enhance bottom to are cash

even year-over-year in execute our compressed to drive profitability flow continue to we continue as and though bottom impacted market. we will cash will profitability. As prices And a strong and line correcting strategies, margins bottom line are be

stabilize. flexibility the improvement sheet to market cash balance will opportunistic Our conditions our as enables and continue to improve. position be This

added of we the Finally, improvement an focus quarter strategy strategy company. have end. strategy, is continuous core since additional throughout last This an additional a

we created and measurement focus perhaps company constructive expertise on it across direct for a year, new with in trite, performance obvious CHRO metrics Drew continuous a area, have program Welcome determined little developed with Last this a a we a and our improvement bonus engagement leader and Although to seems measurement structure. recruited platform. and and our specific in we've aboard, of every central tie Holler.

be Lennar Now has call version for that best about me, and our that shareholders help really and formally to continue meaning Jon to to formally reach wanted the company and on ourselves. exciting Rick, our improvements he know drive of expect us higher with of welcome I six we, been Drew months, let earnings harder will to him the that all

inflation. defined their housing adjusting normal been homebuilding thin tailwinds been and The country the have very some to by headwinds are equally by reserve-driven required have remains some while been by consumer has that past stubbornly headwinds the production concerns, decade. on interest has that between have The refined affordability of they home. strong way. seems adjustment and as consumer deficits over along higher And industry a to the it as across well conclusion, high rate rates driven edge the on purchase by interest in new defined careful the navigation tailwinds increases challenged opting strong to very the skating The adjust. attempted shortages and So Federal

and difficult sheet strong Lennar we balance strategy, fortified We closings, the stronger-than-expected precision. with strong ended and and executed liquidity. the cash revenues has conditions, volatile first extraordinarily team with market on these focused quarter and flow, profitability In a have and

margin, a land continue further on a of flow, -- uncertainties of have spite maximizing plan cash driving managing the with balance market challenging and managing maintaining to spend volume, XXXX inventories, We of focus in to enhancing execution our land navigate conditions. sheet and the

homes are not between for broad we between to and some closing guiding a margin XX.X%. boundaries gross with but XX,XXX second and giving Accordingly, quarter expect our we XX% XX,XXX

SG&A. volume and between are full to reconciliation we construction land delivery we year and costs margins the for volume back drive and homes and up carefully as share up targeting of XX,XXX XX,XXX Additionally, through build pick be market managing while

in your our core the we that's our will for way, put, stick as will While ourselves expect we're order we expected. continue and adversity volatility perform to respect. Thank and along what we Simply prepared on you. hope process, we of to to focus trust operating strategies earn and in the

let And across a walk with that, platform. of review to me who's market through going conditions to Rick turn the our over

Stuart. Thanks,

which comments, from and continued As higher market has to Stuart's you tell opening can impacted rates, affordability mortgage overall homebuyer the by be impacted confidence. has housing

targeted or While base most buy-downs, to of by regain markets, some performing mortgage markets incentives and/or our provide in rate adjust our maintain we've pace. sales had well, prices, are of our increase

maintain to adjust market Our pace, to reflect sales pricing continue and strategy our targeted has our sell been homes conditions. to

we flow continuously starts, gross our pricing a our we've strategy, generate basis market as this have for model first maintain starts strategy, the community sales, and price price market dynamic community We reflects used of find homebuilding sales. machine generate where homes by as With of clearing cash sheet Mass our focus to balance and believe each to margins our to quickly on sacrificed sales that fundamentally going. can we possible. our keep

start Jon pace. end, the and benefits our of cost this discuss operational maintaining To will

results quarter of Our price execution our first quarter strategy. reflects the reflect market successful first to

February favorably These new sales each XXXX. per orders increased sales, X.X declined to the see of reported did first fourth February year. Stuart in just month our mentioned, sales We prior compare and in pace X.X the competitor as sequentially the the results. from than the as sales our first quarter, and quarter quarter nationally with community pace new our sales quarter improvement from totaling results, XXXX lower first orders XX% During during very sales

in cancellation of first month XX% quarter. from sequential the in to each improvement quarter fourth the Our quarter in with also declined the rate XX%

our cancellation cancellation In XX%, below our normalized was in fact, rate rate. February much

benefited Our right execution with the buyers. our both Financial cancellation have the in mortgage our from home flawless finding of mortgages product and rates group locking Services

the sequential continued has of base achieve quarter with weeks order lower a sales sales quarter fourth during we in by new pace. offset to partially the XXX,XXX, from in incentives Our saw small first improvement trend mix X% This been price reductions able pushing our impacting first two into totaled was quarter slight which in We've a incentives, first our average higher. our March. without Sequentially, the reduction up monthly sales and primarily price prices.

the first rates have sales stability in and maintained continuing and February interest two and we feel the weeks established spike across and Notwithstanding pricing we rates into our late have pace March, footprint. cancellation our of in market sales

give I'd are focus prior had our our two, adjusted one, you Now we've and price incentives an additional successfully like markets found and and targeted phase. sales well; and across country. the have markets pricing market three, require that incentives to that markets I categories: performing update quarters, adjustments to regained X the regain pricing markets absorption where on momentum, In

Category in the While platform, across gross is X lower now, that markets. has for news our good have the strategy margins resulted no we

migration. well. inventory XX Philly Indi are Florida, first extremely are low New Carolinas, the Southeast employment During from local Charlotte, benefiting in markets far Diego. Southwest March, are markets Coastal from benefiting Atlantic, strong and that Florida, so many quarter Jersey, we growth San performing and Palm and are These had Tampa, and Metro, These economy,

well, perform programs to mortgage normalized sales have buy-down we selectively continued and offer have markets these to incentives. While had

case. a but markets these price targeted adjustments, required Some those are have rare communities in in

reflect and sales Nashville, Our Virginia and in Utah, the adjustments Seattle, including made Colorado, Vegas and and significant Texas, successfully including Category Orlando, markets. These XX Raleigh, markets markets, Austin, markets Coast, more Jacksonville Minnesota Gulf Portland and have we've where momentum Alabama, which all include Northern the Reno Pacific Atlanta, Maryland, X include Chicago, Tucson, regained Northwest, Las and rest of Boise. Phoenix, California, Ocala,

programs, is to momentum. While reductions aggressive increased more had sales each to inventory offer these we price of financing incentives and/or markets, regain in limited have base

some we've and Size In cancellations, cases, and sell all our a on homes prices pricing allowed reducing This of raising basis community-to-community X Category making to limited fluid, by increase and finished we day. our homes inventory. with able has our been proactive a to very of and up pricing week. is of lesser stabilize. our remain incentives We've us we're building not the Category have specific avoid markets, adjustments on often avoid been been by to to extent, our Markets strategic prices. base has In backlog. sales In decisions base varied handful each X reactive. price homes we've adjustments and and markets, seen every primarily a proactive and to net very adjusted

we're said, Stuart committed changes to management address quickly. team any market as As future a

going said market. pace keep first our As homebuilding our and balance in the to This past, our our we to homes we're start machine focus. is sales going, price sheet and maintain

life to monthly I'd and our managing delivery with on banks our Much strategy our basis. develop relationships them driving Before and and like to home to our it by sheet after strategy to a execution for land deliver the our land and our on to land finished sites I while quarter, progress land partners of community quarterly purchase over production. Quarter simultaneously driven and was strategic land machine behalf homebuilding we've just-in-time worked balance management of sales, count. inventory turn and Jon, discuss

purchased finished various In XX,XXX were the for our quarter, from of about home home land sites sites structures. first our XX%

future and to strategy. from continued home percentage We've improving of site growth. increasing first progress year-over-year. years We end evidenced on quarter, from home life years' count also X.X focused significant on to have increasing This our make our our to drive the controlled was land X.X owned XX% our at to XX% of supply years community our sites

the community and ago communities expect of period, increased to the the to at X% first of community by single first increase quarter Our year quarter in the from XX,XXX count the the the digits fiscal from end year. count our end we high

will development come time of Given communities quarter. bulk on lines, our fourth in the these our

to over like turn I'd Jon. Now it to

Thank you, Rick.

Rick enable we pace. how focused sales You've community our does Lennar heard starts. machine remain to community maintain by Accordingly, finding from Stuart forward on moving market and production to this keep with

construction stated per resulted first sales our consistent quarter space This manage sort in production-first a then strategy establish community. our with keeping continue to home being one and inventory. of ending effectively pace the matching with starts to about only inventory We homebuilder,

By this construction To playbook construction areas achieving results focus: three executing in cycle has can maximize we believe lowering remind primary flow financial of conditions. market time reducing our we you, all playbook, and costs, even production.

Let me address area. each

noted and we evidenced market with industry-wide down This XX% the future last in respectively, drop will material. a XX% January has As in the starts months, in at free down starts has three and over permits. XX%, the proxy in and starts the reported to permits in labor XX% in a caused and are and a up starts the already XX%, conditions and further permits speed nationally period. starts November, last quarter, availability for year-over-year while and the activity change is which were permit same December of year-over-year sharp continue drop Declining and reduction of XX%,

at Looking first quarter. our

cost for X%. costs driven lumber primarily -- environment was XXXX. This construction last reduction from cost started other homes versus the through about constructions the deliveries, sequentially in categories. home almost from offset in expected, increases by flowing most fell XXXX partially by summer, in Year-over-year QX XX%, costs for in the reflecting by our by rose construction elevated As costs

to of with our reduce in to and cost our trade continue progress Importantly, working materials. make the we first partners labor quarter,

we evaluated maintain all divisions. changes now all an Additionally, we review of process our across specification ongoing engineering have product and our appropriate of lines value for

our we in feel first-hand. understand already this and in communicate there's which They our with permits partners our appreciate. greatly order to steps them have in they taken space, of industry, to our and starts the noted, meet We support have continuously our and margin volume. the to pace sacrifice in strategy maintaining sales trade keep stock As I also

as In know keep helping they board understand help in have with stable. lower it are churn, us we to they to businesses them the costs partnered on make construction their us to they're our financially happen. They mission,

which start expect begin margin our seeing We to factored quarter closings, second savings through are these our flow into to guidance.

Last quarter, I communicated back flow half the we had identified cost about the $XX,XXX which closings per savings in of our year. home and will construction through

months. now contracted lumber, We of costs throughout supply in savings the material cost few up the identifying price from for mills distribution where continue managing the inflationary reduced the Potential an cost and time the at additional make inventory savings, savings to have and by quantities next environment rally combination over as channels for headwind certain are is sets lumber a these through future the minimal progress potential pressures. small on to same impacted while

At this well construction of least strategy. prices at for again. time under is focus time, home in reaffirming in we savings, will per come the $XX,XXX serve Cycle should us home second further area which our pressure are comfortable

in Stuart saw of supply first XXXX. by cycle As impacted our in second extended those challenges chain closings times homes noted, half the the were quarter the as

For increased year-over-year days XX X and time the quarter, respectively. and cycling days sequentially,

started duration heavily inventory. chain year, and continue supply from our were more close we quarter second will homes of home by impacted beyond, which As the disruptions, to into eliminating move last the those of longer we

time housing cycle material due benefits greater the and labor availability of starts. the Our reduction also to in from significant

of overall pre discussed, increased As opportunities end to the the previously fewer months end as compared conditions. back the front construction are sequence affected about from to at The of pandemic bulk a two our front out as time there we've end. cycle this build

of we roof the can first week. but sorters our days quarter, our can't few we over of time recapturing end. example, cycle the reduced two the front-end been without By significant a in a has There front time on end at on we we improving have install weeks put by each by peak. time pace For on throughout windows. the cycle are improvement wall, Currently, the from

and have will as some see in as transformers, appropriate cycle free how a approve the wait significant fund. potentially chain to strengthening workforce levels will trend our staffing this tied or of inventory lingering next long issues over municipalities. be can our labor that time quarters supply the remaining decline We maintained up This depend sheet. up few even at further the our Reducing and amount in tort on such cash balance will is

focus us. flow The production. a its avoiding This be is efficiencies was and third trade flow disruption, the quarter, and production area Lennar. the of throughout average completions even consistent to versus flow for the with allow both Prior consistent [valleys]. properly core the even the drives SG&A starts staffed the to for and partners at trade supply peaks month pandemic chain and related executed focus efficiencies Even and completions both Lennar and for our fuel and

operations focus entire second not the reducing intense a focus cost, of month involved are quarter, day production. forward flow. there on see for we to company. -- These at return Everyone even an flow start at strategies and and on every cycle everyday the times yet, are While Lennar lowering we in we achieving our focused single of each even planned are purchasing deliveries can to as look

would to over like to turn I Diane. now it

of great our regarding and Stuart, Jon Jon, provided performance. everyone. Rick and you, homebuilding deal a good have Thank color morning,

going XXXX. segments sheet balance then of I'm QX minutes in few spend therefore, on So and provide our results our high-level to the Lennar boundaries Other a Financial and Services for

Services. Financial with starting So

Services prior earnings Financial quarter, were million volume, million. homes. of $XX lower decrease $XX earnings team in For the as loss the driven Mortgage the a result first by of compared price The year. our million average in our to operating $XX operating the decline produced earnings was sales primarily in of

These in Title cost as million Title the in result compared team to of volume Homebuilding result market. through prior between to of as a teams continues were and earnings great successfully synergies as challenging solid efficiencies through increased results per the this the earnings as a achieve year. Financial million $XX higher decrease executed operating together were our Services primarily $XX accomplished and technology. transaction they

our had The $XX at this $XX traded then operating loss of Lennar of losses mark-to-market looking Segment for million. first Other noncash quarter, result which So million. technology totaled loss was primarily our investments, on the an segment the publicly

returns our then to drumbeat And on Lennar balance a turning at is There and laser-focused sheet. be to on constant flow. cash

finished our our and to turn land determination and we've with begin. where homebuilding The be ended acquiring drumbeat strategies efficiency no This construction pricing total possible. that homes will deliver primarily homes asset unwavering $X.X This cash billion the steadfast liquidity. results to facility, with of approximately continuing quarter, quarter borrowings as market purchases on we noted. these generate and homesites cash our about our by to determination we of to by $X.X inventory The was as increase judicious of with vertical preserve were continued many to a billion $X.X soon as revolving credit billion cash of provided

sites sites lighter. land owned we balance home and focus becoming efficiency, quarter XXX,XXX a At controlled on goal home Given for XXX,XXX total our enhanced of continued of XXX,XXX sites. our end, home we sheet

provides to of year. the X.X this to increased market in to to improved position years grow year, Our share with believe prior sites from way. own portfolio XX% continue controlled us home our years and capital-efficient X.X in competitive a prior We sites a from home strong XX% in years the

Consistent our completed which about started total $XXX we commitment finished inventory homes shares million. as managed the and approximately were about million allocation, successfully unsold quarter with levels. X our During ended we quarter, homes capital repurchased we inventory, XX,XXX about to totaling strategic with in of the XX,XXX X,XXX

million. Additionally, we paid dividends totaling $XXX

And then our looking profile, senior is is maturity at our note maturity million, in next XXXX. due debt fiscal $XXX which

We paydown of continue our debt. to from benefit

strong the ever, to You to with $X.X quarter about our was in may lowest savings. recall at debt senior end, notes, interest million of year. improvement about that an $XXX earnings, repaid XX.X% our total capital prior which we've equates from XX.X% which in Combined billion was homebuilding

balance We our to sheet. remain on And increasing just returns. committed a few shareholder final points

billion. Our stockholders' equity increased to $XX

approximately increased $XX, Our our was over XX%. on our equity on share return book value and approximately inventory return was XX% per to

with strength I'd strong through low in liquidity our have we to sheet, And that balance leverage difficult move conditions. the summary, the with provides provided volatility XXXX. issue market confidence in historically to financial overview, brief thoughts that as It QX. us continues In and turn of significant we given targeted guidance like be our flexibility to the to

of last very quarter. mentioned, give So did ranges to some we're the each components as second as of boundaries and Stuart for we our broad quarter, providing

start let's So new with orders.

price anticipate to QX expect We and be be range XX,XXX year-over-year. ending QX the We in to be slightly sales to count orders flat QX we to QX in market. the should XX,XXX our in be as XXX,XXX our the homes average XX,XXX deliveries range price to to to up range our and new of of XX,XXX XXX,XXX expect community homes, to continue of to

to be sales range stock million, will quarter. XX% categories, Other we Lennar $XX QX to $XX category. in be of $XX anticipate business we Services expect since of determined to that any land end the earnings multifamily the the for Lennar SG&A to and their for does the and be include and The in homebuilding Other in a venture And of expect have our the range of and expect XX.X% combined million and estimate margins our mark-to-market to million prices our adjustments $XX loss not of investments potential adjustment at earnings by other technology of about our the our be to each to X.X% We about Financial We we range for X.X%. joint million. of expect gross

foundation G&A QX of to X.X% We our and revenues, be about corporate total on our will X.X% per charitable to based home contribution delivery. expect be $X,XXX

We share the approximately should XX.X% average be and expect rate shares. about our XXX to count tax be weighted million

quarter. so you per to estimates EPS all $X.XX together, pull in these And produce the range second that an when share between should for $X.XX

this our XX,XXX another forward given we're deliveries XXXX providing quarter, update to which on next our look Stuart should range previous boundaries market increase call. we did of full to again, only XX,XXX, be XX,XXX to giving is as of We as volatility, XX,XXX. delivery year for once earnings you Finally, mentioned, an range first last

operator. to the And with it over let me that, turn

And Stephen Instructions] come first from our [Operator Evercore ISI. question will Kim from

very to guys. commentary results. first orders. and impressive Wanted your a guidance Yes. times could, if Super and on interesting ask Thanks question, about very I much, your

think your So you that per sales running indicated I at X.X February absorptions were community.

second Your anything, higher curious absorption in order is? less the if that. quarter the than guidance And than because I that why see, show for quarter. in XQ would we that seems something demand to to was order usually we implied your what in And seems first if expect starts? higher or a that you see might in excess greater the up imply guide, be margin exceeds

should answer please. Hold on with struggling that who We're question.

it's Jon. David,

I I pace. heard at market building we pace. made a found of matches It's pace think think our adjustments our that the really -- what defined discussion you it we start approach, in that is stroke a we've my achieve as as view, the points to really

healthy it's so And sales look the by think to a is pace market current we very year-over-year market community, the environment. managed relative that as at market and by you it community

I and community. managing community from community basis. these each recognize, it's are that And up in overall community fact of by that most in of a numbers, you the community -- overview the each field base might our it's think we roll-up the numbers Steve, the with not look to business happening they match what's perfectly important managing by at really exactly when a

some see And so to numbers. you're anomalies the in going

demand to margins. the to going And whether is going is or volume we're to to that answer numbers Your question both. really really if be it's stronger, in higher see as that about to optimizing reflected higher

volume some but itself our demand We model a greater ability price will, the greater pricing garner additionally, to will margin. that dynamic with express and greater see and through demand higher sales

important unsold front is, that as we a really us current. more lot welcome one are know, inventory a Additionally, have position, you that. in homes of thought of very on not And

tend far how mortgage of getting about of far more. in lend could which use in a We terms But shorter disciplined not ahead rate very selling. out too sales. we're find So buy-downs, potentially to some cycle we're very open to in effective duration we up it

that's go to next. going exactly Yes, I where was

segue. for that So thanks

you So this pricing dynamic know model. have I

as One and of the prefer they QMIs recently, really seem did curious you than the much even past. have they well, we've did, in is things more than noticed that to that quick I'm homebuyers if move-in homes

And completion, of from offer which your could in past. were very different is spec you I the homes things that so probably way to the you imagine actually reduce need that incentive near something as the would level

dynamic And so incentives that process? that Are I'm true? curious, you to you your has reduce And is as the get adjusted change? model reflect that finding pricing specs can your along construction actually further

Rick. it's Steve,

we question, of we're in the that. sales back if the definitely We eight, of start our or your keep amount That's getting pricing. that the of to that sales type my QX premium XX to the going And the of able as the the can on weeks, conveyor six, last incentives the since basis, our they production commentary, the just have to projection. for middle reflective that's as coming we've belt, they're improves, you is why to keeping in going. I incentive. pace monthly basis the that's seen a That's of our of completed will. for on mid-Xs. fairway of off weekly push lowering And cadence mentioned a really get continued market if pace been why And sort really lower homes completion the close But strategy homes being we with

all do and this in remarks. wake I’d of bit note it's remarks Little I to discussion an the increased numbers very did volatility know my overlay the important I Have and I writing even up see volatility. looking be think at moving that looked around in finished as market context to and I of a about conditions. forward. talked strange my to night last say that that morning

much. Thanks this appreciate take yield, though, And Yes. Stuart, very X.X% the XX-year morning. will to that. we

other the what like. see We'll Absolutely. numbers look

to line go we'll the from Associates. of Alan Next, & Zelman Ratner

obviously, I lower mirror and your to a data. opinion, pricing couple that how that's steady earlier as just headlines of and least a were was of the that now reconcile comments a see rearview parse finally are as Stuart far that to pertains little comments just bit February, hoping a remained tick the sales little your too over. first Rick's and you the of did activity taking higher overall Stuart, March between weeks banking from late late you through the March First, February early from now, And kind here to But not have the in in of of weekly bit but rates. at

guess bring orders market reconcile kind you B, aggressive pricing think I would adjusting speak, again comments? you has up? prices a price, sales can you So And point or clearing what A, I'm a to that so just to of more those pace that get curious, fade given bit, incentivizing were if found at to on

moving to as It's world direct entered a is it's It of relative kind the of to to shock have were we a into went answer March Well, on I into traffic read the our remained very intrigued definitely sales looking we rates, We're of mean end we fact direction, each in the February a dramatically information. are that watch a strong. levels. our of pace doesn't your saw sit, we interest day. normal relatively basis the a rapid in last subsiding. from of is rates about the said in different interest impact at away. number question that started reconcile February, everyday big community. at sticker But February, and end the We to granular new every that read of a an what pricing is gone ways assessment. There -- To of change part

And might able ago. might disrupting with assessment. in find they But consumers' have to as touch are to incentives at movements rate get that rate interest we X might have are and sales the discounting affordability interest nine movements intersection step between we that or do, the we in months same have the months the keep not and to time, and

anomalous. of end to regular the on impact those February, definitely And but impact of in really on a as not saw on sales. we basis. much all came are an traffic of we an That's So play

it's Alan, Jon.

who a lever the that pulled purchase mortgage went decision. rates we made to part impact our impact a of sales, there's customers forward sort travel. to to of connection an of see our and I interest buydowns think rate didn't as a I rate that on point were think, of That's, queue up, our in we with moving is an we're seeing the keep why while

we did stability first for And and I'd make cancellation and didn't the see into in two really much just March, in down prior stable ticked aggregate stayed see weeks. sales going the of final rates that zone February. the a number the is in two Incentives comment variation of weeks weeks first really month the of two

really all that. Appreciate That's helpful.

build private publics early financing more know different the regional for capital. here. that a are you the it's guys the it's anything that from coming the given so take a this the tougher here kind you industry of which holistically, the financing of debt kind some may directions lot that I huge and whether can debt sheet purchases, be could your But uncertainty that have. or in term hand, you advantage a banks regional the result But near today, Second, on other utilizes over strength in one and period and of the reliant think to and in banking if long-term given balance on it's about up rent tightening, sector on builders AD&C

So might competitive business your advantage even capital one do Stuart. if or that perspective? And impact How is have out, tightening are any could a this headwinds do maybe there that this see for if you that playing from best how occur? you

clean there's consequences. so them around really many to unintended a So out. not a is use was sure to Alan, the think very one, my words comments, of And There I'm I are going important there. just question don't they're answer I clear And in intentional out it. your shake and swirling I how

to through smaller support system. right rates. a moving going shakes market, going to. the all feel be banking to There's are ripple movement way the regional upward. banking something housing of out buyers we'll to is capital but whether also going The only And broader community going not downward. it and tuned it's how very structure the to that cost the absolutely capitalization is builders of There's the the be system be for be You're that or SFR

weekend going But those unexpected it's to the many the has is happened, seen not whether just just ways with we're few how we the days, going over past to whether it's or -- landscape it, I shift. to in see about the that not around are to able and be we Unintended over we've deal over had think And consequences think night. corners. last

sales account out there platform into So both community-by-community laid and marketing model these that are I and use them. going the it's that volatility, basis deal to stay in that close and our just we all our have that production hope will how strategic well that effects, important things to a and commentary prices dynamic with keep very I daylight focus the out to our on sit some moving, machine recognizing there ripple going unexpected that we'll see have digital are to and margins. the to and we're taking pricing the impact market is to

from Susan the to line of Maklari go Sachs. Goldman we'll Next,

that that how refining that? improving the give you around comments you that we've volatility can or the first ground? going My especially boundaries any mentioned us is helped those to your XX,XXX guidance process. last that and specifics over And those given XX,XXX? to dynamic pricing giving model, seen confidence give question the us closings back of couple in you the months, And on there constantly Are that you to the for adjust has to you of your 'XX rates in are

Jon. it's Susan, Hey,

into premiums, dynamic pricing clear view incentives, mortgage home us of base Our elements cetera. et model go the a different associated buydowns, pricing that very and really pricing gives

pricing having We've can product top base basis cetera, week in of our biggest pricing, community-by-community on developed track what's give market stay sales incentives, these needed happening driving conditions. changes operators that very that on that what a is results. and what's evolved and dynamic of within et on plan-by-plan much we've tools So view additional through where pace, the impact week over they

the well As as competitive landscape.

Yes.

it model, form of is market view it's their information build to forward actionable backward that and with in backward-looking what dynamic being ingested market-by-market we All and what's into it graphic basis. in in more accumulate clear pricing means what's is the giving of as ingestion where and understanding And up that the a of in components and field dependable operators testing data, a of the is our really us to on we helps -- the ability pricing that market, our happening come the expected. that is happening the

about. over and are to communities on place six harder most to is X,XXX better moving probably easy how understanding lagging assets, doing to the important are what coast-to-coast. And months takes to our that last on thing meaning look has up get that the all It's par. quite communities the interesting a the is communities ones That's might platform a and at underperforming direction. see our it the taken across to be what of It's in them dynamic performing that's that pricing well zero-in those that are right model focus underperforming not and to focus the that on

sales pace. opportunities. to upside from the the that performing adjustments ones a also to are But value identify It of pricing because well not the allows the us we're maximizing need that

really on land have matches about pace that start into trying is the a that it’s ties to we're all our that a to set foundation work sales and we start a enables And -- pace. pace

So want then we that on land, navigate make where to us sure we land and to. we that helps spot to we want the know enterprising

Yes.

sheet, the very things the crisis, be for? And are returns come advantage we've That's But leverage shareholder looking relative of? you've periods strongest Where will to opportunities sheet time. financial helpful. to And you balance things to, how Obviously, could this that opportunities do gone of ever to say, global right then through out the it's what of think drive the or turning when thinking you've able balance how Historically, uses now. got conditions other all know take you slowdowns growth. to investing had, are about operating long-term especially the to probably you're balance long-term the Okay. of you've some there really sheet? together given or been in hard growth certain

emphatically organic Susan, our focus So growth. is say that me on let primary

really opportunities traditional kind a are outside of not strategic We of being sense. looking opportunistic in and

continuous focused and actual on program. to opportunity operators that -- generating the serious motto we improvement improvement right improve, focus outside company stock, we really that are can not to run primary clearly not is I've We across debt, this here. is paying the continuous homebuilder, Continuously think looking before, a set have, opportunistic now. all on the that to or with cash, that a of said refining we and buying boundaries. opportunistically down that the our We're as many the around levers we of business is And said, where an back skill I times are we up to focused being going best-of-breed board, manufacturer the opportunity We biggest the continuously improved should. have and we're are asset-light internally and our down focused its be

land focused a of to strength enabling business well it. And is how we and continues to do to our for that grow very running right our on strategy focused us what on, complementary staying we're build and the enables our balance the execute of systematically in We're refining crosshairs asset-light that light land a componentry programming not sheet The thinking. that of is us and be future. to

I might put come is capital, individual if the the with think that community-by-community vehicles. things builders, level margin, we basis one in consistent where a can opportunities smaller developers land on regional the of on our need that they with on that smaller

And our Truman Research. from from question next comes Patterson Wolfe

Actually, this Sadowski]. is [Paul

to a your quarter-over-quarter question, basis. order regional First X% ASP on X% increased

that. in that geographic Was of off drove cetera? dimension et then did order mix, the that, actually bottom was percent power. And product imagine submarket following or I come communities the on balanced all it But pricing? what more have pricing your power pricing can't You

mix So my QX. as QX and and was most really I between reductions, said some increase comments, primary incentive impact between of price product that was with the of in QX the QX

we percentage of That's the I'm that the... right As not far have sure as communities, now.

midpoint half quarter the basically Well, right. The guidance. last gross you In first All thought XQ of little the margins the you Do would second to you a mentioned continue is about margin question, that to came XQ for thought year. Okay. kind your will second in relative low on you bit the the first higher see be that point of half? believe quarter, flat. 'XX the

with the timing which a flow with partners don't radically lag there's Generally, back is some boundaries, some direction. move a is we do said, that term subtle savings feel that want we do. through. but we're in year that and the in flows of actually what be recognize able days. the through our correct Remember, of that I a trying margins there, these that are should term But do half kind assuming as a the we to word be what little With better and and our -- of to partners there's the one half we anticipating engage guidance. difference are know strangely start that just give boundaries. our different little is our that bit conditions but working building do stronger, work world market I we to in cost the second a We've to used our building actually of numbers. should the and

And BTIG. our Carl Reichardt next question from from comes

about talked you inventory at turns. X.Xx, turns Stuart,

optimizing think turns land So inventory do if getting to where in and like pace a those normal normalized go? times about think can the you at like hunky-dory you for cycle program Lennar, back world, selling

in and some but line the and to our answer will that it's currents So that the disruption disruption management just that supply is back understand cycle leave chain a factor of much thinking us. of it much a there this it's the chain that the time We because of of to lot a times very our I'm of in question, getting let's important another part focus cross prediction. in right not prepared reconciliation of thinking, of want reconciliation I to we've to the our that at for day, are spent that and answer very make metric What think and of team. say supply be And call. now about center the the holdovers some very

the had you assumption to do are Okay. get what you've I think do that under And actually that, least. still to at on that conditions take the necessary postponed obviously, business shot then intend the spun that? Quarterra, you to

in it negative of couple say over answer the I'll seen the unfold weeks. not past the that conditions and we've

moving us not taking just the We and -- as are even to I become the financial for last markets more said there's last quarterly complicated. say I to is bit Quarterra This the that have the have look, -- markets created would be are complication. call, quarter, markets time Since a the that capital market.

opportunity to for well. like And think feel and right I company. see we're I'm I It's an wait that to going item look next leave as the the that open answering do as questions, thing want right like I and to for the Carl. not your me. not

color, That's much. quite Thanks so the right. all guys. I appreciate

We have time more, to two please.

Absolutely.

Our Rehaut from next question comes JPMorgan. from Mike

That I your know, ASP, months. maybe over points margin Jon's to on XX,XXX that's guess, three the comments to six of little you've home XXX last, first it, against believe you per was been it like able The to achieve, a closing to wanted of savings over I just back feel I that circle improvement. basis second I -- quarter question, that don't call

So of you seems amount about in relatively second stable. second remain mentioned -- It half incentive little some more I'm hesitant think we earlier a backdrop would pricing should savings they trying quarter a still about like improvement provided 'XX and I'm this say, to in okay, margins of event? sorry, to that -- and just back expecting might other half. things gross kind about to the Are offset by there XXX. be those back think that? how Just up more half trying Is margins flow considering the fiscal that through of you're gross

say Jon you let let I that before comment, me Mike, just So the hit on head. the nail

general flag correct. you're the yes, caution it's is sending the that that, that think I volatility up

then even course. the volatility to costs back recognize it's are for day around. on not components. We lumber numbers up, working is correct. its moving number are with moving run We look that larger just whether that that number, your static. every to is said, at expanding numbers, leaving a and it room within And things assessment it's Whether and we're down you if other But cost moving

answer is some well. Jon. elements the So Go as of yes, to ahead for volatility we're other themselves express room leaving

Yes.

of the which that just that something six lag is for months contract addressed a call as So tomorrow, we beginnings delivered We QX, you're time today, because a under put moment Stuart now. there it it from mentioned, seeing I start ago. very affects homes

have timing you that cycle. So

does a some. up lumber have that do likelihood move You

battling, goes constant are concrete as our efficiency is a that battle manufacturers. There and in affects a for example, that aggregates energy on headwind. We

contract what we But in So feel and that's all it's about. have it's I and give far. why put take said comfortable we with so under that,

that where And you will XXX% apply there offsets. be of the math because you do so shouldn't

a a little but down, roughly bump the second and to there? up the about XQ, And March. in bump six kind in struck of we're any to was And a quarter talking quarter that of maybe the first. February, Or bit heard gross shorter think I XX the of Rick during referred think versus bit Okay. I makes there weeks, of the second to I of then gross incentives we same increasing focus that type margins little been the a sense. you getting offset wouldn't even the second call, term, what second Why to of in is maybe guidance half past, that at me margins? quarter That's see this flat a I is declining again, in guess, end very incentives, the guess the the even I there and benefit? time, helpful more over in the instead of guided on terms is you've XQ of

more part our I price on down have incentives it's net guidance, adjust XX.X, And pushed of type is if thing you the of some a one to benefit. base incentive which to QX, think focused ultimately, is think of at And is of improvement. need you that equation. look the occasionally, QX base another. incorporates up we But really we're to because prices about pricing. The we've

year. we reduction pricing that the get incentives will feel net the move as a benefit and through in we we from So

and and improvements stages So traffic we're markets stabilized at of really volume the making beginning change. the as

of Mike. going work And It's together Bottom to of especially line plays in the are going lot is up. the it parts near in the and a the parts all over moving moving out all we're term. way these, to quarter, going it roll

sure things the injection moving make rational is So market in all just you're the the including seeing some to volatility we're of conservatism that around.

Great. Last question please.

from Bouley Our Barclays. comes question from final Matthew

going So the on on one follow-up system. everything banking around

or market, some as out mortgage of broader you of And fluid, of I own very industry all laid thoughts to of kind And all the any go to level and of recognize may guys business. to there. Kind any out selling sort banking lending there? standards unpack exposure just how You this have on higher regional is through lay process kind your you mortgage system secondary loans of pertaining very the impact the sort thoughts but much do just that?

to that. chime Bruce you to morning Nice on let in going Bruce. We're hear this

and Nice other agencies of to the we banks. that loans sales With investors, are sell to not be to respect parties we that regional to have here.

always to no of attention very paying that, financing have backdrop regional to did agencies. close but investors sell banks. from those the Some we And We're could the disruption. is

we very to feel about the sales investors. good So

big are banks. lines the warehouse commercial Our primarily

the little bank warehouse line. very regional So component with

experienced financial XXXX an is in 'XX. crisis been we that. team really we're and in back vetted good This that's shape, through the So

So comfortable. we the we've and feel and very we have quickly, reacted playbook very

Yes.

like than especially Let mortgage more the banks. markets established products the also capital say me that pretty regional product. are There fluid, around

void these companies have I we we'll high show temporarily of Some of look up. a degree fill insurance able confidence to some at spaces. And the to of that be are any that think starting

Bruce. Perfect Stuart Thanks Wonderful. right. All you and color there.

and and at you Second one, are you're to back trying on mentioned just the prices that. very push it top sounds around sticky land like

said think what little on push get you a this of of eventually if margins, stage? you see kind doing be at can correctly. lagged kind elaborate back a benefit if and market where kind curious you just you're it I you'd to to heard of the I I'm should think you land

up. What that prices will the sometimes makes home. have And residual somewhat come might back down, and day, of perhaps back the off can value value of or value price is land used land residual bounce what a play sticky land sales the therefore, of the is at the for. residual to the they'll the Look, of come expectation home price but land relative it is landholders wait. be And old end residential into

pricing day, the believe will the ultimate into products. and land to valuation of end to land, of to have finding use cash that Ultimately, and At we're to there and that that want the revert of end of we're rational a if that I sell normal. and new generate to be kind relationship landholders the home sense new coming normal cost the price. owners of between going is land home have And

because We water are the or us by going to buy simply not impaired put that's land under next patiently we're it to that waiting and reconcile to for going margin. the doing we're

bit And if of come situated it stays so upside, little that a more. will into time. pay around we to a understanding are kind land play. to is that is, If new corrects going the to sure valuation we'll has quite the that but there our it market where But come to sellers

Just and what's land make in clarity, it close can that ebb there, flow, quickly. we all that so as really going is for are and we're very operationally, staying on does flow, to know that decisions out

Rick? Right.

market, And activity starts Jon land the I that doubt highlighted. there's no that and sellers the land permits are seeing the think

or of nervous. last the land. can some There's XX Jon, had years. they that them of think have land I bit last last always than more heard developed. in comment think of a piece are the I the piece that little acquired be getting all They for

we'll them. strong respectable really if make So with structure specifically we're going being margins. and forward to sense, deals And very to we're underwriting well, careful for the them or today's prices and move

say these So let village. the in land and in the homebuilder, going it's the the define guess, trade, me to partners Well, along is future. working the pricing current world, just seller is takes say, it I and or they concluding a lines all homebuilding building the recognizing the together and

report future us, we want With everybody look to to Thank future again the that, to as I in forward joining you say you. and reporting quarters. for we thank

concludes today's participating. for you That conference. Thank all

your You enjoy disconnect your of the line, may please rest and day.