Toll Brothers Reports FY 2024 2nd Quarter Results

Toll Brothers, Inc. (TollBrothers.com), the nation’s leading builder of luxury homes, announced results for its second quarter ended April 30, 2024.

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

• Net income and earnings per share were $481.6 million and $4.55 per diluted share, compared to net income of $320.2 million and $2.85 per diluted share in FY 2023’s second quarter.
• Net income and earnings per share included $124.1 million and $1.17, respectively, related to the sale of a parcel of land to a commercial developer. Excluding these gains, net income and earnings per share were $357.5 million and $3.38 per diluted share in FY 2024’s second quarter.
• Pre-tax income was $649.8 million, compared to $430.6 million in FY 2023’s second quarter.
• Home sales revenues were $2.65 billion, up 6% compared to FY 2023’s second quarter; delivered homes were 2,641, also up 6%.
• Net signed contract value was $2.94 billion, up 29% compared to FY 2023’s second quarter; contracted homes were 3,041, up 30%.
• Backlog value was $7.38 billion at second quarter end, down 12% compared to FY 2023’s second quarter; homes in backlog were 7,093, down 6%.
• Home sales gross margin was 25.8%, compared to FY 2023’s second quarter home sales gross margin of 26.4%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.2%, compared to FY 2023’s second quarter adjusted home sales gross margin of 28.3%.
• SG&A, as a percentage of home sales revenues, was 9.0%, compared to 9.1% in FY 2023’s second quarter.
• Income from operations was $623.5 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $203.7 million, which includes $175.2 million from the land sale referred to above.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our second quarter results. We delivered 2,641 homes at an average price of $1.0 million, generating home sales revenues of $2.65 billion, a 6% increase compared to last year’s second quarter. Our adjusted gross margin was 28.2%, 60 basis points better than guidance, and our SG&A expense, as a percentage of home sales revenues was 9.0%, 70 basis points better than guidance. These strong home building results, together with a previously disclosed $175 million pre-tax land sale gain, contributed to record second quarter earnings of $4.55 per diluted share, up 60% compared to last year. In addition, we signed 3,041 net contracts for $2.9 billion in the quarter, up 30% in units and 29% in dollars compared to the second quarter of 2023. 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%.

“Demand for new homes continues to be driven by a resilient economy, favorable demographics and a lack of supply that reflects both the chronic underproduction of housing in the U.S. and the historically low levels of resale inventory caused by the lock-in effect of higher rates. Our strategy of widening our price points to include more affordable luxury homes and increasing our supply of spec homes has helped us grow market share. It also enables us to reduce cycle times, improve inventory turns and leverage our fixed costs, driving revenue growth and higher operating margins. With these strategies firmly in place and producing results, and with our more capital efficient land strategy, we are confident that we can continue to generate attractive returns well into the future.

“We have a healthy balance sheet with low net debt and ample liquidity, and we continue to generate significant operating cash flows. In the second quarter, we repurchased $181 million of common stock and increased our quarterly dividend by 10%. Our solid financial position, more efficient operations and strong cash flow generation should allow us to continue investing in growth while also returning cash to stockholders.”

Additional Information

• The Company ended its FY 2024 second quarter with approximately $1.03 billion in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $754.8 million at FY 2024’s first quarter end. At FY 2024 second quarter end, the Company also had $1.7 billion available under its $1.9 billion revolving credit facility, which is scheduled to mature in February 2028.
• On March 12, 2024, the Company announced a 10% increase in its quarterly cash dividend from $0.21 to $0.23 per share. On April 19, 2024, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on April 5, 2024.
• Stockholders’ Equity at FY 2024 second quarter end was $7.31 billion, compared to $6.80 billion at FYE 2023.
• FY 2024’s second quarter-end book value per share was $70.98 per share, compared to $65.49 at FYE 2023.
• The Company ended its FY 2024’s second quarter with a debt-to-capital ratio of 28.0%, compared to 28.0% at FY 2024’s first quarter end and 29.6% at FYE 2023. The Company ended FY 2024’s second quarter with a net debt-to-capital ratio⁽¹⁾ of 18.7%, compared to 21.4% at FY 2024’s first quarter end, and 17.7% at FYE 2023.
• The Company ended FY 2024’s second quarter with approximately 71,800 lots owned and optioned, compared to 70,400 one quarter earlier, and 71,300 one year earlier. Approximately 52% or 37,000, of these lots were owned, of which approximately 18,500 lots, including those in backlog, were substantially improved.
• In the second quarter of FY 2024, the Company spent approximately $472.0 million on land to purchase approximately 3,470 lots.
• The Company ended FY 2024’s second quarter with 386 selling communities, compared to 377 at FY 2024’s first quarter end and 350 at FY 2023’s second quarter end.
• The Company repurchased approximately 1.5 million shares at an average price of $120.60 per share for a total purchase price of approximately $181.2 million.

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

For full 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.