06:48 AM EDT, 03/25/2026 (MT Newswires) -- KB Home ( KBH ) shares fell early Wednesday as the homebuilder lowered its full-year housing revenue outlook amid affordability concerns and recent geopolitical tensions, while it reported weaker-than-expected fiscal first-quarter results.

Housing revenue is now set to come in between $4.8 billion and $5.5 billion for fiscal 2026, the company said late Tuesday, down from its previous projections of $5.1 billion to $6.1 billion. Home deliveries are pegged at 10,000 to 11,500 units, versus the prior guidance of 11,000 to 12,500 homes.

The stock declined 2.3% in the most recent premarket activity.

The revised outlook "reflects the current uncertainty of the new home market, which we believe has been impacted by affordability concerns and recent geopolitical tensions," Chief Financial Officer Robert Dillard said during an earnings call, according to a FactSet transcript.

"Concerns surrounding the conflict in the Middle East have introduced an additional layer of uncertainty for consumers who were already working through numerous challenges," Executive Chairman Jeffrey Mezger said in a statement. "Still, we believe we are well positioned to navigate the current environment."

President Donald Trump reportedly said Tuesday that the US and Iran are currently negotiating and Tehran is eager to make a peace deal, according to CNBC. Iran, however, recently denied that it was in talks with Washington.

For the three months through Feb. 28, KB Home's ( KBH ) net income fell to $0.52 per share from $1.49 the year before, missing the FactSet-polled consensus for $0.55. Overall revenue dropped 23% to $1.08 billion, trailing the Street's view for $1.09 billion. Homebuilding revenue slipped to $1.07 billion from $1.39 billion.

Homes delivered fell 14% to 2,370, as the company continued to experience "moderate demand" from a cautious consumer, Dillard said on the call. Net orders advanced 3% to 2,846 homes, buoyed by robust traffic and a lower cancellation rate, Chief Executive Robert McGibney told analysts.

The average selling price decreased to $452,100 from $500,700 in the prior-year quarter, while housing gross profit margin slid to 15.3% from 20.2%.

For the ongoing quarter, KB Home ( KBH ) anticipates housing revenue to be in a range of $1.05 billion to $1.15 billion on expected deliveries of between 2,250 and 2,450 homes. Housing gross profit margin is expected at 15% to 15.6%, assuming no inventory-related charges.

"Price will continue to be the primary driver for margin pressure as we balance price and pace for the remainder of the year," according to Dillard. "Margins are expected to be impacted by higher relative land costs, regional mix and reduced operating leverage, as deliveries are expected to remain below prior year levels."