Citi has highlighted KB Home's (KBH) recent earnings report, which revealed a miss on fiscal Q3 gross margins (20.7% vs. 21.2% consensus) and a reduction in full-year guidance to 21.1-21.2% from 21.1-21.5%. The company attributed this to increased incentives amid softer demand in June and July, though demand showed improvement in August. KBH's net order volumes also fell short of expectations (3,085 vs. 3,382 consensus). The report comes as Tropical Storm Helene is expected to impact Florida, potentially affecting construction materials demand negatively but boosting roofing demand. Citi notes, "As interest rates slid, we saw almost an instant reaction out of the consumer," indicating a positive shift in consumer behavior in August. The current price of KBH is $81.75, down 6.5% from the previous close.