Toll Brothers Inc. Records Remarkable Revenue Increase Amid Robust Housing Demand

Toll Brothers

FORT WASHINGTON, PA — Toll Brothers Inc. (NYSE: TOL), a renowned name in the American housing industry, recently divulged its encouraging performance for the second quarter of the fiscal year 2024, ended April 30. The picture painted by these figures points to a company on the rise, gaining momentum in an increasingly robust market.

The financial highlights report a net income of $481.6 million and earnings per share at $4.55, experiencing a significant rise from the net income of $320.2 million and $2.85 earnings per share in the second quarter of the previous fiscal year. Even after excluding gains from selling a land parcel, the net income and earnings per share still stood at a commendable $357.5 million and $3.38, respectively.

Pre-tax income also skyrocketed to a healthy $649.8 million, marking an increase from the preceding year’s second quarter, which was at $430.6 million. The company’s home sales revenue saw a positive uptick of 6%, reaching $2.65 billion with the number of delivered homes also seeing a 6% increase, totaling 2,641 homes.

Contracts were blooming as well for Toll Brothers, with the net signed contract value and contracted homes marking a 29% and 30% increase respectively. But, it’s not all roses; the company also reported a 12% decrease in backlog value at the quarter’s end, with homes in the backlog also witnessing a minor dip of 6%.

Toll Brothers Inc. seems to be navigating the fiscal waves efficiently, with income from operations reaching $623.5 million. Other income, including gross margins from land sales, contributed an additional $203.7 million, thanks in part to a notable $175.2 million from a land sale.

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Douglas C. Yearley, Jr., the chairman and chief executive officer of Toll Brothers, expressed satisfaction over the second quarter results. He amplified the company’s achievement of 60 basis points above the predicted gross margin and 70 basis points better than projected in their SG&A expense, as a percentage of home sales revenue.

“We are very pleased with our second quarter results, ” said Yearley. “Based on these outstanding results, and with continued solid demand as we start our third quarter, we are increasing our full year revenue and earnings guidance. We now expect to earn approximately $14.00 per diluted share in fiscal 2024 with a return on beginning equity of approximately 22%.”

Yearley attributes the positive demand for new homes to a resilient economy, favorable demographics, and a chronic lack of supply borne out of the underproduction of housing in the U.S and historically low levels of resale inventory. He also commented on the strategic decision to include more affordable luxury homes and increase their supply of spec homes.

Looking forward, he expresses confidence in the continuation of their successful trend, backed by a healthy balance sheet, efficient operations, and significant operating cash flows. This will enable them to invest in growth while also returning cash to stockholders.

Overall, the financial performance of the luxury home building company is projected to sustain its upward trajectory. As a seasoned player in the housing industry, Toll Brothers Inc.’s strategic initiatives steer them to promising profitability and growth, despite the market’s inherent challenges.

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