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KB Home CEO reflects on pleasant surprises in Q2

BY HBSDEALER Staff

KB Home’s second-quarter performance may have topped out economists’ expectations, but CEO Jeffrey Mezger had a measured, practical take on the homebuilder’s growth.

"We have produced year-over-year revenue increases for eleven straight quarters and operating income improvement for ten consecutive quarters," commented Mezger. "The sustained progress in our results demonstrates the success of our targeted land and land development investments across our operating footprint, the appeal of our product designs and unique home buying experience, as well as our sound growth platform."

With revenue up 8% to $565 million, KB Home generated earnings of $26.6 million to be exact, up drastically from a loss of $3 million a year ago. 

The homebuilder’s profit rides on the back of increased selling prices throughout the nation, as well as an increased backlog of 3,398 homes. KB Homes’ average selling price rose 10% year-over-year.

"Increasing the number of new home communities we have open for sales remains a top priority for us," added Mezger, noting recent land acquisitions by the company. "We expect to measurably expand our community count into 2015 with the significant investments we are making in our land pipeline. We believe that with these and other strategic initiatives we have underway and the performance improvements we have delivered over the past several quarters, we are well positioned for accelerated revenue growth and profitability going forward."

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RILA has a word on union contract negotiations

BY HBSDEALER Staff

Kelly Kolb, VP government affairs of the Arlington, Virginia-based Retail Industry Leaders Association (RILA), made a statement on behalf of the organization regarding union contract negotiations at West Coast ports.

With the deadline to resolve the negotiations drawing near, RILA said its priority was to avoid work stoppage and to keep supply chains functioning as usual.

"The window to resolve the contract negotiations is rapidly closing," she said. "Failure to secure a deal by the June 30 deadline would be particularly undesirable to the retail community as it jeopardizes the movement of goods destined for shelves during the all-important back-to-school and upcoming holiday seasons. Undertaking all the essential measures to avoid work stoppages and strikes that halt the supply chain should be the top priority."

Kolb added that the organization was hoping to avoid a similar fallout as the work stoppage of 2002, during which the American economy lost nearly $1 billion per day.

"In light of those memories, many retailers have taken stock of the uncertain labor situation at the West Coast ports and have implemented contingency plans to preserve the reliability of their supply chains," she continued. "Some of our members advise that they are beginning to reroute shipments through other channels, taking advantage of more stable routes that became essential during the protracted disputes of 2002."

"As both sides understand, modifications to the massive supply chain plans of the retail industry take time to implement and even longer to undo. The importance of preserving reliable channels for retail supply chains cannot be understated," she concluded.

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The 2014 HCN Industry Scoreboard

BY HBSDEALER Staff

(Click the image for a larger version.)

 

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