M/I Homes (NYSE:MHO) reported fourth-quarter earnings Wednesday that fell short of the prior year’s records, as the Columbus-based builder grappled with $51.2 million in pre-tax charges that bit into its bottom line.
The charges included a $40 million writedown on inventory and $11 million for warranty-related costs, reflecting the ongoing pressure of high interest rates and shifting demand in the residential sector.
For the quarter ended Dec. 31, 2025, revenue decreased 5% to $1.15 billion, while net income tumbled to $64 million, or $2.39 per diluted share.
Excluding the impact of the one-time charges, adjusted diluted EPS stood at $3.91.
While home deliveries for the quarter dipped 4% to 2,301 units, the company saw a 9% uptick in new contracts, suggesting that buyer demand is beginning to stabilize despite a cooling broader market.
Meanwhile, the company’s "fortress" balance sheet remains its most significant competitive advantage.
M/I Homes ended the year with $689 million in cash and zero borrowings under its $900 million credit facility.
Its homebuilding debt-to-capital ratio improved to 18%, a conservative level that allowed the company to return $202 million to shareholders through stock repurchases throughout the year, including a new $250 million authorization launched in November.
However, the road ahead contains visible hurdles.
Backlog units plummeted 29% to 1,809 units at year-end, a contraction that could signal a leaner delivery schedule for the first half of 2026.