Shares of AMREP Corporation (AXR Quick QuoteAXR - Free Report) have lost 10.5% since the company reported its results for the quarter ended April 30, 2026. This compares with a 0.6% gain for the S&P 500 Index over the same period. Over the past month, AXR shares have plunged 9.8%, while the S&P 500 has decreased 1.4%.

AMREP’s Earnings Snapshot

For the fourth quarter of fiscal 2026 ended April 30, 2026, AMREP reported revenues of $11 million, down from $11.2 million in the year-ago quarter. Net income declined sharply to $1.3 million from $3.9 million a year earlier, while earnings per share (EPS) fell to $0.24 from $0.73.

Lower profitability reflected weaker gross profit, which declined to $4.4 million from $5.5 million, and a significantly higher tax provision, despite continued non-operating income of $0.4 million.

For fiscal 2026, AMREP reported revenues of $52.8 million, up 6.3% from $49.7 million in fiscal 2025, driven by stronger homebuilding activity despite softer land sales. Net income declined 19.1% year over year to $10.3 million, while diluted EPS fell 19.4% to $1.91 from $2.37.

Within AXR’s operating segments, land sale revenues decreased 20% to $20.6 million as developed residential land sales slowed, partly offset by higher commercial and undeveloped land sales. Home sale revenues rose 35% to $28.7 million, reflecting higher home deliveries and an increase in average selling prices. Other revenues climbed 27% to $3.6 million, supported by higher landscaping and miscellaneous revenue streams.

AXR’s Homebuilding Offsets Weakness in Land Sales

The homebuilding business provided the primary growth engine during the year. AMREP sold 65 homes compared with 50 a year earlier, while the average selling price increased 3.8% to $441,000 from $425,000. As of April 30, 2026, AXR had 75 homes in production, including 24 under contract representing $12.9 million of expected future home sale revenues, subject to cancellations and change orders.

Land development remained more challenging. Land sale revenues fell as developed residential acreage sold declined to 16.8 acres from 28.6 acres in the prior year. However, sales of developed commercial land and undeveloped land partly offset the decline. Management noted that results from undeveloped land sales can fluctuate significantly depending on the timing and size of transactions.

AMREP’s Margin Trends and Operating Factors

Although net income declined, operating performance showed mixed trends for fiscal 2026. Operating income edged up 2.4% to $12.4 million from $12.1 million as stronger revenues offset higher operating expenses. Land sale gross margin improved to 61% from 52%, benefiting from reimbursement mechanisms and the mix of properties sold. Home sale gross margin also improved to 24% from 21%, although rising building material and skilled labor costs, together with increased customer incentives, continued to pressure profitability.

General and administrative expenses increased 24% to $9 million for fiscal 2026. Land development administrative costs rose 36%, primarily because of higher property taxes, while homebuilding administrative expenses increased 15% due to higher payroll, benefits and professional service costs. Corporate administrative expenses increased 5%.

AXR’s Management Commentary

Management attributed the year's performance to continued delays in municipal approvals, infrastructure availability, contractor schedules and utility response times across both operating segments. AXR also cited elevated construction costs, inflation and higher mortgage rates as factors weighing on housing affordability and demand.

To adapt to these conditions, AMREP increased land and home prices where possible while also offering sales incentives, reducing home and lot sizes, slowing housing starts and certain land development projects, and leasing completed homes when sales demand softened. AXR emphasized that these market conditions contributed to variability in both revenues and margins.

AMREP’s Liquidity and Outlook

AMREP ended fiscal 2026 with cash, cash equivalents and restricted cash of $52.7 million, up from $39.9 million a year earlier, supported by operating cash flow of $12.9 million. The company stated that it believes existing liquidity, operating cash flow and available bank financing are sufficient to fund anticipated spending during fiscal 2027.

While AXR did not issue formal financial guidance, management indicated that revenues from developed residential land sales are expected to decline in fiscal 2027 because it has intentionally slowed certain development projects amid affordability challenges, market uncertainty and permitting delays. At the same time, management expects continued investment in homebuilding while monitoring inflation, mortgage rates, labor availability and broader housing demand.

AXR’s Other Developments

AMREP did not disclose any acquisitions, divestitures or major restructuring initiatives during fiscal 2026. The company continued expanding its owned residential rental portfolio, increasing leased homes to 28 from 21 a year earlier as it opportunistically leased completed homes in response to softer buyer demand.