DR Horton said full-year revenues would likely come in between $27.4 billion and $27.6 billion, down from a prior estimate of between $27.6 billion and $28.1 billion, due to what it called "continuing significant disruptions in the supply chain, including shortages and delivery delays in certain building materials along with tightness in the labor market."
So-called 'closed home' estimates for the final three months of its fiscal year, which ends on September 30, were seen in the range of 21,300 to 21,700, a figure that's down around 7.4% from its July estimate.
Gross margins will likely improve, however, thanks to "strong new home demand and limited housing supply continue to support pricing power across most of (the group's) operating footprint" to between 26.5% and 26.8%.
The updated forecasts echo a similar warnings earlier this month from homebuilder PulteGroup (PHM) - Get PulteGroup, Inc. Report, which noted that "shortages for a variety of building products, combined with increased production volumes across the homebuilding industry, are directly impacting our ability to get homes closed to our level of quality over the remainder of 2021."
DR Horton shares were marked 2.4% lower in early trading Monday to change hands at $88.65 each.
Last month, U.S. Senators Jerry Moran and Jeanne Shaheen, as well as Commerce Secretary Gina Raimondo, met with industry leaders to address both supply chain issues and the soaring cost of lumber, which has added nearly $30,000 to the price of a new single-family home, the National Association of Home Builders has estimated.
“Runaway construction cost growth, such as ongoing elevated prices for oriented strand board that has skyrocketed by nearly 500% since January 2020, continue to put upward pressure on home prices,” said NAHB Chairman Chuck Fowke.
“Policymakers must address supply chain bottlenecks for building materials that are raising costs and harming housing affordability,” he added.