Toll Brothers Reports FY 2024 1st Quarter Results

Toll Brothers, Inc., the nation’s leading builder of luxury homes, announced results for its first quarter ended January 31, 2024.

FY 2024’s First Quarter Financial Highlights (Compared to FY 2023’s First Quarter)

• Net income and earnings per share were $239.6 million and $2.25 per diluted share, compared to net income of $191.5 million and $1.70 per diluted share in FY 2023’s first quarter.
• Pre-tax income was $311.2 million, compared to $253.8 million in FY 2023’s first quarter.
• Home sales revenues were $1.93 billion, up 10% compared to FY 2023’s first quarter; delivered homes were 1,927, up 6%.
• Net signed contract value was $2.06 billion, up 42% compared to FY 2023’s first quarter; contracted homes were 2,042, up 40%.
• Backlog value was $7.08 billion at first quarter end, down 18% compared to FY 2023’s first quarter; homes in backlog were 6,693, down 13%.
• Home sales gross margin was 27.6%, compared to FY 2023’s first quarter home sales gross margin of 25.6%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.9%, compared to FY 2023’s first quarter adjusted home sales gross margin of 27.5%.
• SG&A, as a percentage of home sales revenues, was 11.9%, compared to 12.1% in FY 2023’s first quarter.
• Income from operations was $308.4 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $8.6 million.
• Subsequent to quarter-end, the Company sold a parcel of land to a commercial developer for net cash proceeds of $180.7 million, which is expected to result in a pre-tax land sale gain of approximately $175 million in FY 2024’s second quarter.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our strong first quarter results. We delivered 1,927 homes at an average price of approximately $1.0 million, generating home sales revenues of $1.93 billion. Our adjusted gross margin in the quarter was 28.9%, a 140-basis point increase compared to Q1 2023, and our SG&A expense, as a percentage of home sales revenues, improved by 20 basis points year-over-year to 11.9%. This combination of top line growth and greater operating efficiency led to earnings of $2.25 per diluted share in the quarter, a 32% increase over last year’s first quarter.

“We experienced another quarter of solid demand. We signed 2,042 net contracts for $2.06 billion, up 40% in units and 42% in dollars compared to last year’s first quarter. Since mid-January, we have seen a marked increase in demand coinciding with the start of the spring selling season. With a healthy job market, improving consumer sentiment, and continued low levels of resale inventory, we are optimistic that demand for new homes will remain strong in 2024.

“Based on our first quarter results, and with a strong start to the spring selling season, we are raising our full year guidance across all key metrics. In addition, earlier this month we sold a parcel of land to a commercial developer for net cash proceeds of $180.7 million, which will result in a pre-tax land sale gain of approximately $175 million in our second quarter. Factoring in both the increase to our homebuilding guidance and the impact of the land sale, we now expect to earn between $13.25 and $13.75 per diluted share in fiscal 2024, with a return on beginning equity of approximately 21%.

“At the end of our first quarter we owned or controlled approximately 70,400 lots, providing us with sufficient land to increase community count over the next several years. Our balance sheet is solid, we have ample liquidity, no significant near-term debt maturities, and we expect to generate significant cash flow from operations in fiscal 2024. This will enable us to continue investing in our business while also returning cash to stockholders throughout the year.”

Additional Information

• The Company ended its FY 2024 first quarter with approximately $754.8 million in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $791.6 million at FY 2023’s first quarter end. At FY 2024 first quarter end, the Company also had $1.8 billion available under its $1.9 billion revolving credit facility, which is scheduled to mature in February 2028.
• On January 26, 2024, the Company paid its quarterly dividend of $0.21 per share to shareholders of record at the close of business on January 12, 2024.
• Stockholders’ Equity at FY 2024 first quarter end was $7.02 billion, compared to $6.80 billion at FYE 2023.
• FY 2024’s first quarter-end book value per share was $67.29 per share, compared to $65.49 at FYE 2023.
• The Company ended its FY 2024’s first quarter with a debt-to-capital ratio of 28.0%, compared to 29.6% at FY 2023’s fourth quarter end and 34.1% at FY 2023’s first quarter end. The Company ended FY 2024’s first quarter with a net debt-to-capital ratio⁽¹⁾ of 21.4%, compared to 17.7% at FY 2023’s fourth quarter end, and 27.5% at FY 2023’s first quarter end.
• The Company ended FY 2024’s first quarter with approximately 70,400 lots owned and optioned, compared to 70,700 one quarter earlier, and 71,300 one year earlier. Approximately 51% or 36,000, of these lots were owned, of which approximately 18,400 lots, including those in backlog, were substantially improved.
• In the first quarter of FY 2024, the Company spent approximately $463.2 million on land to purchase approximately 2,620 lots.
• The Company ended FY 2024’s first quarter with 377 selling communities, compared to 370 at FY 2023’s fourth quarter end and 328 at FY 2023’s first quarter end.

(1)  See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.

For the full first quarter results, click here.

About Toll Brothers

Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 57 years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, and second-home buyers, as well as urban and suburban renters. Toll Brothers builds in over 60 markets in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia. The Company operates its own architectural, engineering, mortgage, title, land development, insurance, smart home technology, and landscape subsidiaries. The Company also develops master-planned and golf course communities as well as operates its own lumber distribution, house component assembly, and manufacturing operations.

Contact:

Frederick N. Cooper – Media Contact – fcooper@tollbrothers.com – (215) 938-8312

Source: Toll Brothers, Inc.