Toll Brothers Reports FY 2024 3rd Quarter Results

Toll Brothers, Inc. (TollBrothers.com), the nation’s leading builder of luxury homes, announced results for its third quarter ended July 31, 2024.

FY 2024’s Third Quarter Financial Highlights

(Compared to FY 2023’s Third Quarter)

• Net income and earnings per share were $374.6 million and $3.60 per diluted share, compared to net income of $414.8 million and $3.73 per diluted share in FY 2023’s third quarter.
• Pre-tax income was $503.6 million, compared to $553.0 million in FY 2023’s third quarter.
• Home sales revenues were $2.72 billion, up 2% compared to FY 2023’s third quarter; delivered homes were 2,814, up 11%.
• Net signed contract value was $2.41 billion, up 11% compared to FY 2023’s third quarter; contracted homes were 2,490, also up 11%.
• Backlog value was $7.07 billion at third quarter end, down 10% compared to FY 2023’s third quarter; homes in backlog were 6,769, down 7%.
• Home sales gross margin was 27.4%, compared to FY 2023’s third quarter home sales gross margin of 27.8%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.8%, compared to FY 2023’s third quarter adjusted home sales gross margin of 29.3%.
• SG&A, as a percentage of home sales revenues, was 9.0%, compared to 8.6% in FY 2023’s third quarter.
• Income from operations was $497.2 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $1.1 million.
• The Company repurchased approximately 2.1 million shares at an average price of $118.57 per share for a total purchase price of $245.9 million, bringing full year repurchases to $427.1 million. The Company now expects approximately $600 million of share repurchases in fiscal 2024.  

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased to report another quarter of strong results. In our third quarter, we delivered 2,814 homes at an average price of $968,000, generating record third quarter home sales revenue of $2.72 billion. Our adjusted gross margin, at 28.8% in the quarter, significantly exceeded guidance due to favorable mix and greater efficiencies in our home building operations, and our SG&A margin of 9.0% beat guidance by 20 basis points. This combination of revenue and margin outperformance drove earnings of $3.60 per diluted share in the quarter.

“Net signed contracts were up year-over-year approximately 11% in both units and dollars, with July being our strongest month in the quarter. We are also encouraged by our solid deposit and traffic activity through the first three weeks of August. With mortgage rates at their lowest point in a year and trending lower, favorable demographics, and continued imbalance in the supply and demand of homes for sale, we are optimistic that demand will remain solid through the end of fiscal 2024 and into 2025.

“Based on our third quarter outperformance and our expectations for the fourth quarter, we are raising our full year guidance across all key home building metrics, including adjusted gross margin, which we now expect to be approximately 28.3% for the full year. We also expect to earn between $14.50 and $14.75 per diluted share with a return on beginning equity of approximately 22.5%.

“We remain on target to achieve our goal of operating from 410 communities by fiscal year end, representing 11% community count growth this year. At the end of the third quarter, we owned or controlled 72,700 lots, providing us sufficient land to grow community count in fiscal 2025 and beyond. We have a healthy balance sheet with low net debt, no significant near-term debt maturities and ample liquidity. In our third quarter, we repurchased $246 million of common stock, bringing our year-to-date repurchases to $427 million. We continue to generate strong operating cash flows and we are increasing our expected share repurchase total for fiscal 2024 from $500 million to $600 million as we continue to both return capital to shareholders and invest in growth.”

Additional Information:

• The Company ended its FY 2024 third quarter with $893.4 million in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $1.03 billion at FY 2024’s second quarter end. At FY 2024 third quarter end, the Company also had $1.77 billion available under its $1.96 billion revolving credit facility, which is scheduled to mature in February 2028.
• On July 19, 2024, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on July 5, 2024.
• Stockholders’ equity at FY 2024 third quarter end was $7.41 billion, compared to $6.80 billion at FYE 2023.
• FY 2024’s third quarter-end book value per share was $73.46 per share, compared to $65.49 at FYE 2023.
• The Company ended its FY 2024’s third quarter with a debt-to-capital ratio of 27.6%, compared to 28.0% at FY 2024’s second quarter end and 29.6% at FYE 2023. The Company ended FY 2024’s third quarter with a net debt-to-capital ratio⁽¹⁾ of 19.6%, compared to 18.7% at FY 2024’s second quarter end, and 17.7% at FYE 2023.
• The Company ended FY 2024’s third quarter with approximately 72,700 lots owned and optioned, compared to 71,800 one quarter earlier, and 70,200 one year earlier. Approximately 50% or 36,300, of these lots were owned, of which approximately 19,300 lots, including those in backlog, were substantially improved.
• In the third quarter of FY 2024, the Company spent approximately $374.7 million on land to purchase approximately 2,100 lots.
• The Company ended FY 2024’s third quarter with 404 selling communities, compared to 386 at FY 2024’s second quarter end and 345 at FY 2023’s third quarter end.

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.