KB Home (KBH) Boosts Community Count In Denver & Menifee
Zacks Investment Research | Dec 11, 2019 09:08PM ET
KB Home (NYSE:KBH) announced the addition of two new residential communities — Stone Creek Ranch in Denver and Salerno in Menifee.
These affordably-priced communities will have one-story single-family and two-story single-family homes, with up to seven bedrooms and four baths. The communities start with the price tag of mid $300,000. Moreover, these communities will be built per the latest ENERGY STAR guidelines, which will help homebuyers save a reasonable amount in utility costs. With the addition of these new communities, the company now operates in 38 markets across eight states, serving a wide range of buyer groups.
The move is in line with KB Home’s ongoing brand-expansion strategy.
Focus on Community Openings Bodes Well
The company focuses on its KB2020 business strategy that aims to boost scale in existing geographic footprint, improve profitability per unit, increase operating margin, drive earnings and generate positive cash flow to redeploy growth as well as reduce debt.
To that end, KB Home is aggressively investing in land acquisition to boost community count and drive revenues. During the fiscal first, fiscal second and fiscal third quarter, the company achieved 10%, 17% and 18% increases in average community count, respectively. KB Home expects average community count to increase 10% and 12% year over year, respectively, in fiscal fourth quarter and 2019.
KB Home expects land investments to drive additional community openings throughout 2020. The company also intends to generate year-over-year growth in average community count in the mid-single digit range in fiscal 2020.
Price Performance
Owing to major contribution from KB Home’s businesses, shares of the company have surged 87.1% year to date compared with its Zacks Zacks Investment Research
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