Lennar Corporation (NYSE:LEN) Q2 2023 Earnings Call Transcript

And any time that you find a process that becomes data-driven and the data improves to the point that it’s actually relevant, at some point, there are large learning models that can be helpful in enhancing productivity. These are the areas where we are leaning in. I mentioned that we brought on a strategic Chief Technology Officer in Scott Spradley. And all of this is a coordinated program of taking steps at a time to improve the ingestion of data, to use the data more constructively and then to bring it to its next level where we’re actually driving productivity gains within our business. We’ll have more to report. In the meantime, if you find yourself in Miami, come on by. We’ll show you what we mean. We have visualized it, and you can understand what we’re doing.

Alan Ratner: Great. Looking forward to checking that out, and I appreciate the additional information there. Second, on the pricing side, would love to just drill an air a little bit. So volume has continued to come in ahead of initial expectations. Your closing guide for the year now is about 10% above where it was 6 months ago. You’re expecting orders to be up sequentially, which understood is a function of your start pace but you’re probably not starting homes, unless you think there’s demand for them. Yet when I hear your pricing commentary, it seems a bit more muted than I would expect, frankly, as far as more stability as opposed to maybe some pricing power returning to the market. So I know you’ve always been very articulate about your belief in the housing shortage at affordable prices, which I think is the key distinction there.

And I’m curious if your decision at this juncture to not be more aggressive raising price is a function of your views on perhaps if prices were to go up or reaccelerate that, that would kind of take demand out of the market? Or is it just more of a conservatism stance around wanting to take market share in this still kind of choppy environment right now?

Stuart Miller: Listen, that’s a great question. I think we’ll all speak to that. Let me start by saying, we’ve been very thoughtful about this, and we’re thoughtful about it on a day-to-day basis. We view the fact that at the affordable level, as you properly point out, there is a housing shortage. You hear it when you speak to mayors and governors across the country. You don’t hear it as a national expression as much. But at the local levels, the need for workforce housing is a dominant need, and it’s become a social imperative. So thinking about where we fit into the equation, and I don’t want to make too much of this, but we have focused on saying, look, there’s a void that needs to be filled. There’s a needed an appetite.

And what we’re going to do is instead of driving price, we are going to drive pace and hold price. And that relationship between price and pace is something that Jon, Rick, myself, Diane, we talk about it all the time. It’s the focus — it’s the whole focal point of the machine that we talk about. And at the core, we’re recognizing that from the national landscape and the local landscapes, they need the volume, the supply is constrained, and therefore, we’re focusing more on pace than we are on price. And we’re focusing on consistency and predictability of pace so that we can rationalize costs at the same time. Rick? Jon? Whoever.