Matt Johnson

Matt Johnson, on for John Lovallo, questioned the implied back-half gross margin, which appears to be down slightly despite significantly higher sales volume. He also asked for a regional breakdown of the expected year-over-year decline in homebuilding operating margins.

Answer

COO Rob McGibney clarified that significant mix shift is not expected and that the forecast reflects current market conditions. He stated that any improvement in housing gross profit margin would be modest and primarily due to leverage. McGibney emphasized that most of the operating income leverage in the second half would come from the SG&A line due to substantially higher volume. The question regarding regional operating margin drivers was not directly addressed before the next analyst was called.