LGI Homes Raises 2026 Margin Guidance for Second Straight Quarter

The Tip Desk · August 5, 2026 · 3 min read

Second-quarter homebuilding gross margin of 19.8% and adjusted margin of 23.2% both exceeded the midpoint of the ranges the company had already lifted after the first quarter.

LGI Homes, Inc. (LGIH) raised its full-year 2026 homebuilding gross margin outlook for the second consecutive quarter, citing first-half results that exceeded the midpoint of guidance it had already increased after the first quarter.

The homebuilder now expects homebuilding gross margin as a percentage of homebuilding revenues of 19.0% to 21.0% and adjusted homebuilding gross margin of 22.5% to 24.5%, up from 18.5% to 20.5% and 22.0% to 24.0% set after the first quarter. It also lifted full-year average sales price guidance to $360,000 to $370,000 from $355,000 to $365,000 issued with fourth-quarter 2025 results. Other 2026 items, including 4,600 to 5,400 home closings and 150 to 160 ending communities, were reiterated.

In the three months ended June 30, 2026, homebuilding revenues were $501.5 million, up 3.7% from a year earlier. Total home closings were 1,440, including 75 currently and previously leased homes, up 8.8%. Closings contributing to revenue were 1,365, up 3.2%. Average sales price per home closed was $367,407, up 0.5%, after a nearly 3% increase to $362,924 in the first quarter. Total revenues were $516.0 million.

Homebuilding gross margin was 19.8% of homebuilding revenues and adjusted homebuilding gross margin was 23.2%, both above the midpoint of the previously increased ranges. Chairman and Chief Executive Officer Eric Lipar said the results reflected a disciplined approach to pricing, incentives, and inventory management and the continued benefits of the self-development platform. Net income was $27.0 million, or $1.16 a share, after $2.2 million, or $0.09 a share, in the first quarter.

The company ended June 30 with 151 active communities, up 3.4% from a year earlier, reaching the low end of its full-year community guidance six months into the year. Average monthly absorption was 3.0 homes per community.

Segment results in the quarter were uneven. West posted the largest homebuilding revenue at $134.6 million on 299 closings and an average sales price of $450,197. Central contributed $127.8 million on 419 closings. Southeast homebuilding revenues were $108.1 million on 323 closings, down from $150.1 million on 456 closings a year earlier. Florida reported $71.4 million on 203 closings, and Northwest $59.6 million on 121 closings.

The company reduced debt by $128.6 million in the quarter and ended with a debt-to-capital ratio of 42.6%, a 220-basis-point improvement year over year. Net debt to capital was 41.6%. Total liquidity was $468.0 million, including $61.1 million of cash and $406.9 million of revolving-credit availability. Notes payable were $1.58 billion.

For the six months ended June 30, 2026, homebuilding revenues were $821.2 million, down 1.6% from a year earlier, with 2,246 home closings, down 3.1%, and an average sales price of $365,649, up 1.6%. Six-month homebuilding gross margin was 19.4% and adjusted homebuilding gross margin was 23.3%. Net income was $29.1 million, or $1.25 diluted a share.

Net orders in the six months were 2,260, with a cancellation rate of 47.4%, versus 2,528 net orders and a 24.2% cancellation rate a year earlier. Ending backlog was 1,298 homes and $525.5 million, including 269 units tied to bulk sales agreements.

The company is confident in achieving its 2026 objectives and remains focused on balancing sales pace, profitability, and inventory management. The outlook assumes economic conditions, input costs, interest rates, and land availability in the remainder of 2026 are similar to those experienced to date, and does not take into account additional U.S. trade-policy changes.