Ken Zener's questions to DR Horton Inc (DHI) leadership • Q4 2024
Question
Ken Zener asked if slowing demand was due to having pulled forward sales with incentives, or if it was purely an affordability issue. He also questioned if management still believes in structurally higher long-term gross margins given the persistence of affordability challenges.
Answer
President & CEO Paul Romanowski suggested that the lock-in effect on resale is a key factor and that pent-up demand may be building. EVP Jessica Hansen reiterated that while they will compress margins in the short term to maximize returns, they believe long-term margins can be structurally higher due to scale and a lower cost of capital. EVP & CFO Bill Wheat noted the guided 22.5% margin is still above historical levels.