KB Home (KBH) traded lower after management abandoned its prior expectation for sequential Q4 margin improvement. Adjusted housing gross margin is now expected at 16.3% in Q4, down from 16.8% in Q3, pressured by pricing, costs, and an unfavorable Southern California mix. Net orders fell 12% yr/yr as higher mortgage rates and resale inventory weighed on demand. Q3 EPS beat but the weaker Q4 outlook overshadowed it.
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