TOL

Toll Brothers Reports 50% Jump in Net Income

Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, has reported its financial results for the second quarter of fiscal year 2024, ended April 30, 2024. A comparison with the same period in fiscal year 2023 reveals several significant changes across various financial metrics.

Net income and earnings per share for the second quarter of fiscal year 2024 were $481.6 million and $4.55 per diluted share, compared to $320.2 million and $2.85 per diluted share in the same period of fiscal year 2023. Excluding gains related to the sale of a parcel of land to a commercial developer, net income and earnings per share were $357.5 million and $3.38 per diluted share in the second quarter of fiscal year 2024.

Pre-tax income saw a substantial increase, reaching $649.8 million, compared to $430.6 million in the second quarter of fiscal year 2023.

The company witnessed a 6% increase in home sales revenues, which amounted to $2.65 billion for the second quarter of fiscal year 2024. This increase in revenue was complemented by a 6% rise in delivered homes, totaling 2,641 in the same period.

Notably, net signed contract value surged by 29% to $2.94 billion, with contracted homes increasing by 30% to 3,041. However, backlog value at the end of the second quarter of fiscal year 2024 decreased by 12% to $7.38 billion, with homes in backlog down by 6% to 7,093.

The home sales gross margin for the second quarter of fiscal year 2024 was reported at 25.8%, slightly lower than the 26.4% recorded in the same period of fiscal year 2023. Adjusted home sales gross margin, which excludes interest and inventory write-downs, also saw a marginal decline to 28.2% from 28.3% in the second quarter of fiscal year 2023.

Selling, general, and administrative (SG&A) expenses as a percentage of home sales revenues improved to 9.0% from 9.1% in the second quarter of fiscal year 2023.

The company’s income from operations for the second quarter of fiscal year 2024 stood at $623.5 million, reflecting a significant increase compared to $425.7 million in the same period of fiscal year 2023.

Douglas C. Yearley, Jr., Chairman and Chief Executive Officer of Toll Brothers, expressed satisfaction with the second quarter results. He emphasized that the company delivered 2,641 homes at an average price of $1.0 million, generating home sales revenues of $2.65 billion, which represented a 6% increase over the prior year's second quarter.

Additionally, the company signed 3,041 net contracts for $2.9 billion in the quarter, marking a 30% increase in units and a 29% increase in dollars compared to the second quarter of 2023. Based on these results, the company has increased its full-year revenue and earnings guidance, now expecting to earn approximately $14.00 per diluted share in fiscal year 2024 with a return on beginning equity of approximately 22%.

Looking ahead, Toll Brothers provided financial guidance for the third quarter and full fiscal year 2024, outlining expectations for deliveries, average delivered price per home, adjusted home sales gross margin, SG&A, period-end community count, other income, and tax rate.

The company highlighted its strong financial position, with a healthy balance sheet, low net debt, ample liquidity, and significant operating cash flows. In the second quarter of fiscal year 2024, Toll Brothers repurchased $181 million of common stock and increased its quarterly dividend by 10%.

Today the company's shares have moved -0.6% to a price of $130.22. If you want to know more, read the company's complete 8-K report here.

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