Forestar Fourth-Quarter Revenue Falls After Third-Quarter Gain

The Tip Desk · October 31, 2026 · 3 min read

Net income attributable to Forestar was $59.2 million, or $1.15 a share, as lots sold rose 2% to 5,004.

Forestar Group Inc. (FOR), a national residential lot developer, reported fourth-quarter revenue of $580.8 million on 5,004 lots sold, a 13% decline from $670.5 million a year earlier. That reversed the 4% year-over-year increase to $407.0 million in the third quarter. Lots sold rose 2% from 4,891 a year earlier, after a 1% year-over-year increase to 3,659 lots in the third quarter.

Average sales price per lot fell to $108,300 from $115,700 a year earlier. Development-project lot sales were $540.2 million. Tract sales and other revenue dropped to $38.7 million from $103.4 million a year earlier. Lot banking project revenue fell to $2.0 million from $19.4 million, and lot banking lots sold fell to 24 from 148. Lots sold to customers other than D.R. Horton were 822, compared with 828 a year earlier.

Net income attributable to Forestar fell 32% to $59.2 million, or $1.15 a share, from $87.0 million, or $1.70 a share, a year earlier. Pre-tax income decreased 31% to $78.6 million from $113.1 million, with a 13.5% pre-tax profit margin. Fourth-quarter results included a $10.0 million pre-tax gain on sale of assets and $7.6 million of real estate impairment charges, versus a $4.5 million gain and no impairment a year earlier.

For the fiscal year ended September 30, 2026, net income attributable to Forestar decreased 15% to $142.6 million, or $2.78 a share, from $167.9 million, or $3.29 a share, in fiscal 2025. Pre-tax income decreased 12% to $192.1 million from $219.3 million. Revenues decreased 2% to $1.6 billion from $1.7 billion. Fiscal 2026 results included the same $10.0 million pre-tax gain on sale of assets and $7.6 million of real estate impairment charges. Lots sold during fiscal 2026 decreased 5% to 13,545 lots from 14,240 lots in fiscal 2025. Return on equity was 7.8% for fiscal 2026.

The owned and controlled lot position declined to 84,400 lots at September 30, 2026 from 91,700 at June 30, 2026, including 58,200 owned and 26,200 controlled. Owned lots under contract to sell fell to 21,500, or 37% of owned lots, representing about $2.2 billion of future revenue, from 23,500 lots, or 38%, representing about $2.3 billion at June 30, 2026. Fully developed owned lots declined to 8,100 from 9,600. Another 18,600 lots, or 32% of owned lots, were subject to a right of first offer to D.R. Horton under executed purchase and sale agreements.

Unrestricted cash was $657.0 million and total liquidity was $1.3 billion at September 30, 2026, from $1.1 billion of liquidity at June 30, 2026. Net debt to total capital fell to 6.7% at year-end from 17.7% at June 30, 2026, with debt of $794.2 million and no senior note maturities until fiscal 2028. Book value per share increased 8% from a year ago to $37.56.

Chairman Donald J. Tomnitz said new home demand continues to be impacted by ongoing affordability constraints and cautious consumer sentiment, with rising mortgage rates adding further pressure in the fourth quarter. The company said it currently expects to deliver between 12,000 and 13,000 lots, generating $1.4 billion to $1.5 billion of revenue, in fiscal 2027.