“The home used to be just shelter. Now it is the hub of our entire lives”: Lennar reports strong Q4, full-year results

Miami-based homebuilder reported $2.5B in earnings for fiscal 2020

National /
Dec.December 17, 2020 06:00 PM
Lennar Executive Chairman Stuart Miller (iStock)

Lennar Executive Chairman Stuart Miller (iStock)

Instead of spending on restaurants and movies, Americans’ funds went toward initial home purchases and upgrading to better homes.

That is among the reasons Lennar Executive Chairman Stuart Miller attributed to the Miami-based homebuilder’s strong fourth quarter and fiscal year results, during an earnings call Thursday.

“The home used to be just shelter,” he said. “Now it is the hub of our entire lives.”

Lennar reported fourth quarter and fiscal year earnings of $882.8 million, up 31 percent year- over-year; and $2.5 billion, up 40 percent year-over-year, respectively. The company’s stock rose to $79.68 at 3:36 p.m. Thursday, up 7.2 percent from its closing price on Wednesday.

In fiscal 2020, Lennar delivered 53,000 homes, a 3 percent annual increase. It received 56,000 new home orders, up 9 percent, year-over-year, according to the company.

In the fourth quarter, the company delivered 16,000 homes, down 2 percent, year-over-year, and saw 15,000 new home orders, a 16 percent annual jump. The orders totaled $6.3 billion, up 22 percent, year-over-year.

For next quarter guidance, Lennar expects new orders of 14,500 to 14,800, deliveries of 12,200 to 12,500, and a gross margin on home sales of 23.5 percent to 23.75 percent. It expects the average sales price of homes to be $390,000.

For the 2021 fiscal year, the company expects new orders of 62,000 to 64,000, and a 23.75 percent to 24 percent gross margin on home sales. Lennar expects an average sales price of between $386,000 and $388,000.

Among the factors Miller cited for making him bullish on Lennar’s future performance include retaining homebuyers, as customers upgrade to a new home with nicer kitchens and larger yards. And the company should see a windfall from its relationship with Opendoor, expected to go public in the near future, Miller said.

He said past worries about millennials starting families later in life than their parents — thus becoming homeowners later — are dissipating. And the new use of home offices, home gyms and homes as daycare will keep demand strong into the new year.

And even once discretionary spending on movies and restaurants returns after Covid-19 vaccines reach the masses, a strong economy will lead to continued appetite for homes, Miller said.

Nationwide, the number of housing units under construction grew for the third month in a row, as housing continues to drive the construction industry. The last time single-family homes were built at this pace was 13 years ago, just before the housing bubble burst.

Lennar is continuing to build homes in South Florida. It recently paid $13.7 million for land at Arden, a planned community in western Palm Beach County. It also purchased a former mobile home park in Homestead for $29 million, with plans to build a new housing community.





    Related Articles

    arrow_forward_ios
    From left: Nikki Pechet of Homebound, Assaf Wand of Hippo Insurance, The Real Deal's Hiten Samtani and Brendan Wallace of Fifth Wall and Max Simkoff of Doma (Wallace via Jeff Newton)
    Unicorn founders hold court on proptech’s resi revolution
    Unicorn founders hold court on proptech’s resi revolution
    Federal Reserve Chair Jerome Powell (Getty)
    Traders eye Fed pullback on mortgage bonds
    Traders eye Fed pullback on mortgage bonds
    John Helm of RET Ventures
    Venture capital fund closes fund to invest in “rent tech”
    Venture capital fund closes fund to invest in “rent tech”
    (iStock)
    Chinese developers find buyers for bonds, despite some defaults and specter of further regulation
    Chinese developers find buyers for bonds, despite some defaults and specter of further regulation
    Twenty-five percent of all sales were all-cash deals in April, up from 15 percent from a year ago (iStock)
    All-cash home sales are on the up
    All-cash home sales are on the up
    North Fork home inventory can’t meet demand
    North Fork home inventory can’t meet demand
    North Fork home inventory can’t meet demand
    (iStock)
    Home prices rise for 10th straight month, skyrocketing above 2006 peak
    Home prices rise for 10th straight month, skyrocketing above 2006 peak
    Tom Cruise and his 320-acre estate (Getty, LIV Sotheby’s Realty)
    Tom Cruise’s 320-acre Colorado estate sells at near asking
    Tom Cruise’s 320-acre Colorado estate sells at near asking
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...