FORT WASHINGTON, PA — Toll Brothers, Inc. (NYSE: TOL) reported a strong close to fiscal 2025, delivering record annual home sales revenue even as softer demand, higher mortgage rates, and buyer caution weighed on much of the broader housing market.
The luxury homebuilder said fourth-quarter net income totaled $446.7 million, or $4.58 per diluted share, modestly lower than a year earlier, while quarterly home sales revenue rose to $3.41 billion on 3,443 deliveries. For the full fiscal year, Toll Brothers posted net income of $1.35 billion and earnings of $13.49 per share, supported by $10.84 billion in home sales revenue — the highest annual total in the company’s history .
Chairman and Chief Executive Officer Douglas C. Yearley Jr. described fiscal 2025 as a year of disciplined execution in what he called a “choppy environment.” He said the company’s affluent customer base proved more resilient to affordability pressures, allowing Toll Brothers to balance pricing and sales pace while protecting margins.
Gross margins narrowed slightly from the prior year, reflecting higher incentives and input costs. Fourth-quarter home sales gross margin came in at 25.5 percent, down from 26.0 percent a year earlier, while adjusted gross margin was 27.1 percent. For the full year, adjusted home sales gross margin declined to 27.3 percent from 28.4 percent in fiscal 2024.
Backlog, a key forward-looking indicator, declined to $5.5 billion at year-end from $6.5 billion a year earlier, reflecting slower contract activity. Net signed contracts in the fourth quarter fell to $2.53 billion, down from $2.66 billion, as cancellations ticked higher across several regions.
Even so, Toll Brothers continued to expand its footprint. The company ended fiscal 2025 with 446 active selling communities, up from 408 a year earlier, and controlled more than 76,000 home sites nationwide. Management said it expects community count growth of 8 percent to 10 percent in fiscal 2026, supported by a sizable land pipeline and selective acquisitions.
The company also moved to simplify its business mix. During the quarter, Toll Brothers advanced plans to exit the multifamily development business, agreeing to sell roughly half of its apartment portfolio and operating platform for $380 million, with the transaction expected to close in the first quarter of fiscal 2026.
Toll Brothers returned approximately $750 million to shareholders during fiscal 2025 through share repurchases and dividends, while maintaining a conservative balance sheet. At year-end, the company reported a net debt-to-capital ratio of 15.3 percent and $1.26 billion in cash and cash equivalents.
Looking ahead, Toll Brothers forecast first-quarter fiscal 2026 deliveries of 1,800 to 1,900 homes and reiterated its focus on capital efficiency, inventory discipline, and serving higher-income buyers less exposed to monthly payment volatility.
As the housing market continues to adjust to elevated interest rates and uneven demand, Toll Brothers’ results highlight a growing divide between luxury builders and the broader industry — and suggest that, at the top end of the market, buyers are still willing to pay for premium homes in the right locations.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.