European Building Materials Results read-through: DHI FQ3 26 (Apr-Jun)

Research evidence excerpt

European Building Materials Results read-through: DHI FQ3 26 (Apr-Jun)

Global Research

22 July 2026ab

European Building Materials Equities

Europe including UKResults read-through: DHI FQ3 26 (Apr-Jun)

Building Materials

Julian Radlinger, CFA

DHI reported calendar Q2, slightly reducing home sales guide Analyst

DHI, the largest US homebuilder, covered by UBS US Homebuilding analyst John Lovallo, julian.radlinger@ubs.com

reported FQ3 26 (Apr-Jun) results. For the quarter, margins beat and orders missed +44-20-7901 6558

slightly, and DHI trimmed its guide for home closings for FY26 implying closings down Patrick Rafaisz, CFA, FRM

~3% y/y in FQ4 (vs +4% in FQ3). In the quarter, "stick and brick" costs (the products Analyst

and materials DHI buys to build houses, as well as labor costs) were down patrick.rafaisz@ubs.com

2% sequentially and down 5% y/y. On the call, the most relevant management +41-44-239 90 66

comments from a building products and materials perspective were:

(1) We expect starts to be lower in (calendar) Q3 than Q2. We will continue to manage

our inventory levels and starts pace based on market conditions. (2) Orders were a little

weaker than our internal expectations, which is driving the lower closings guidance. We

saw a bit of softening mid-quarter into the later part of the quarter. (3) We're happy

with the trade-off of higher gross margin vs lower sales volumes. (4) Re input costs, it's

an "ongoing battle" and looking for us to hang on to, perhaps squeeze out a little

additional cost in future quarters.

Read-through to US resi-exposed building products suppliers (SGO, WIE, AMRZ,

GEBN)

After KBH and LEN, which have both reported their Mar-May quarters already, DHI is

another homebuilder that's focussing on preserving margins at the expense of more