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Toll Brothers, Inc. (TOL - Free Report) , a leading luxury homebuilder, reported fourth-quarter fiscal 2024 (ended Oct. 31) results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis, respectively.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Douglas C. Yearley, Jr., chairman and CEO of Toll Brothers, expressed satisfaction with the company's quarterly performance, highlighting the record home sales revenue and significant growth in contracts. Notably, quarterly adjusted gross margins exceeded guidance, highlighting the strength of the Toll Brothers brand, the financial stability of its customer base and the success of its strategic initiatives, including increasing speculative home production and diversifying its geographic reach, price points, and product lines.
Despite the strong financial results, Toll Brothers' stock experienced a 2.8% decline in the after-hours trading session yesterday.
Toll Brothers is off to a promising start in fiscal 2025, with strong demand recorded in the first six weeks — a positive indicator as the critical spring selling season approaches. The company’s expansive footprint across more than 60 markets in 24 states, coupled with its diverse portfolio of luxury homes tailored to affluent buyers, positions it uniquely for success.
With ownership or control of approximately 74,700 lots at the close of fiscal 2024, Toll Brothers is equipped for sustained growth not only in fiscal 2025 but also into fiscal 2026 and beyond. The solid performance in the fiscal fourth quarter reflects the company’s resilience and adaptability in a dynamic housing market, setting the stage for a robust fiscal 2025.
Toll Brothers Inc. Price, Consensus and EPS Surprise
The company reported adjusted earnings per share (EPS) of $4.63, which topped the consensus estimate of $4.30 by 7.7% and grew 12.7% from the year-ago period.
Total revenues (including Home sales and Land sales and others) of $3.33 billion beat the consensus mark of $3.17 billion by 5.3% and increased 10.4% year over year. Growth was attributable to higher deliveries.
Inside Toll Brothers’ Q4 Results
The company’s total home sales revenues grew 10% (well above our projection of growth of 6.1% year over year) from the prior-year quarter to $3.26 billion. Homes delivered were up 25% (ahead of our expectation of 20.5% growth year over year) from the year-ago quarter to 3,431 units. The average price of homes delivered was $950,200 for the quarter, down from the year-ago level of $1,071,500. We had expected ASP to be down 12% year over year to $943,100.
Net-signed contracts for the quarter were 2,658 units, up 30% year over year. The value of net signed contracts was $2.66 billion, reflecting a rise of 32% year over year.
At the fiscal fourth-quarter end, Toll Brothers had a backlog of 5,996 homes, representing a year-over-year decrease of 9%. Potential revenues from backlog declined 7% year over year to $6.47 billion. The average price of homes in the backlog was $1,078,700 compared with $1,055,800 a year ago.
The cancelation rate (as a percentage of signed contracts) for the reported quarter was 5.9% compared with 10.8% in the prior-year period.
The company’s adjusted home sales gross margin was 27.9%, contracted 120 basis points (bps) for the quarter. SG&A expenses, as a percentage of home sales revenues, were 8.3%, which increased 10 bps from the year-ago quarter.
TOL’s Fiscal 2024 Highlights
Adjusted EPS came in at $13.82, up 11.8% year over year. Total revenues of $10.8 billion in the year were up 8.5%, with deliveries up 13% to 10,813 units. The ASP of delivered units was $976,900, down from $1,027,900 a year ago. Contracts were up 27% in units and dollars.
The company’s adjusted home sales gross margin was 28.4%, contracted 30 bps for the quarter. SG&A expenses, as a percentage of home sales revenues, were 9.3%, which increased 10 bps from the year-ago quarter.
Toll Brothers’ Balance Sheet & Cash Flow
TOL had cash and cash equivalents of $1.303 billion at the fiscal 2024-end compared with $1.3 billion at the fiscal 2023-end. The debt-to-capital ratio improved to 27% from 29.6% at the end of fiscal 2023. The net debt-to-capital ratio also improved to 15.3% from 17.7% in the prior year. At the close of the fourth quarter of fiscal 2024, the company had $1.77 billion available on its $1.96 billion revolving credit facility, set to mature in February 2028.
During fiscal 2024, the company bought back approximately 4.9 million shares at an average price of $127.79 per share, totaling $627.9 million.
TOL’s First-Quarter of Fiscal 2025 Guidance
Toll Brothers expects home deliveries of 1,900-2,100 units (indicating growth at midpoint from 1,927 units delivered in the prior-year quarter) at an average price of $925,000-$945,000 (suggesting a decline from $1,002,600 a year ago).
Adjusted home sales gross margin is expected to be 26.25%, implying a decline from 27.6% in the year-ago period. SG&A expenses are estimated to be 12.7% of home sales revenues, indicating a rise from 11.9% in the year-ago period. The company expects the effective tax rate to be 22%.
What TOL Expects for Fiscal 2025
For fiscal 2025, home deliveries are now anticipated to be in the range of 11,200-11,600 units. The estimated range reflects growth from fiscal 2024. It expects the period-end community count to be 410-450.
The average price of delivered homes is now expected to be $945,000-$965,000, indicating a decline from fiscal 2024.
Toll Brothers now expects an adjusted home sales gross margin of 27.25%. This reflects a decline from 28.4% reported in fiscal 2024.
SG&A expenses, as a percentage of home sales revenues, are now projected to be 9.4%-9.5%, still reflecting an increase from fiscal 2024. The company expects the effective tax rate to be 25.5%.
D.R. Horton, Inc. (DHI - Free Report) reported fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results, with earnings and revenues missing Zacks Consensus Estimate and decreasing on a year-over-year basis.
D.R. Horton’s quarterly performance fell short of expectations primarily due to a combination of high mortgage rates and buyer hesitancy. DHI expects consolidated revenues in the range of $36-$37.5 billion (below the consensus mark of $39.5 billion) compared with $36.8 billion in fiscal 2023. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24.5%.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
NVR’s results were backed by improved demand trends, which resulted in higher settlements. Although the cancelation rate increased in the quarter, growth in new orders is encouraging for the company.
Meritage Homes Corporation (MTH - Free Report) reported third-quarter 2024 results, wherein earnings and total closing revenues topped the Zacks Consensus Estimate but declined year over year. This is the seventh consecutive quarter of earnings and revenues beat.
Meritage Homes’ third-quarter results highlight a strategic shift to affordable, quick-turn homes, driving $1.6 billion in revenues and record closing volume. The company reported a 145% backlog conversion and a 17.2% return on equity. Capital allocation focused on growth with $659.4 million in land investments, 7,800 new lots, and $57.1 million returned to shareholders.
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Toll Brothers Q4 Earnings & Revenues Beat With Strong Contract Growth
Toll Brothers, Inc. (TOL - Free Report) , a leading luxury homebuilder, reported fourth-quarter fiscal 2024 (ended Oct. 31) results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis, respectively.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Douglas C. Yearley, Jr., chairman and CEO of Toll Brothers, expressed satisfaction with the company's quarterly performance, highlighting the record home sales revenue and significant growth in contracts. Notably, quarterly adjusted gross margins exceeded guidance, highlighting the strength of the Toll Brothers brand, the financial stability of its customer base and the success of its strategic initiatives, including increasing speculative home production and diversifying its geographic reach, price points, and product lines.
Despite the strong financial results, Toll Brothers' stock experienced a 2.8% decline in the after-hours trading session yesterday.
Toll Brothers is off to a promising start in fiscal 2025, with strong demand recorded in the first six weeks — a positive indicator as the critical spring selling season approaches. The company’s expansive footprint across more than 60 markets in 24 states, coupled with its diverse portfolio of luxury homes tailored to affluent buyers, positions it uniquely for success.
With ownership or control of approximately 74,700 lots at the close of fiscal 2024, Toll Brothers is equipped for sustained growth not only in fiscal 2025 but also into fiscal 2026 and beyond. The solid performance in the fiscal fourth quarter reflects the company’s resilience and adaptability in a dynamic housing market, setting the stage for a robust fiscal 2025.
Toll Brothers Inc. Price, Consensus and EPS Surprise
Toll Brothers Inc. price-consensus-eps-surprise-chart | Toll Brothers Inc. Quote
TOL’s Quarterly Earnings & Revenue Discussion
The company reported adjusted earnings per share (EPS) of $4.63, which topped the consensus estimate of $4.30 by 7.7% and grew 12.7% from the year-ago period.
Total revenues (including Home sales and Land sales and others) of $3.33 billion beat the consensus mark of $3.17 billion by 5.3% and increased 10.4% year over year. Growth was attributable to higher deliveries.
Inside Toll Brothers’ Q4 Results
The company’s total home sales revenues grew 10% (well above our projection of growth of 6.1% year over year) from the prior-year quarter to $3.26 billion. Homes delivered were up 25% (ahead of our expectation of 20.5% growth year over year) from the year-ago quarter to 3,431 units. The average price of homes delivered was $950,200 for the quarter, down from the year-ago level of $1,071,500. We had expected ASP to be down 12% year over year to $943,100.
Net-signed contracts for the quarter were 2,658 units, up 30% year over year. The value of net signed contracts was $2.66 billion, reflecting a rise of 32% year over year.
At the fiscal fourth-quarter end, Toll Brothers had a backlog of 5,996 homes, representing a year-over-year decrease of 9%. Potential revenues from backlog declined 7% year over year to $6.47 billion. The average price of homes in the backlog was $1,078,700 compared with $1,055,800 a year ago.
The cancelation rate (as a percentage of signed contracts) for the reported quarter was 5.9% compared with 10.8% in the prior-year period.
The company’s adjusted home sales gross margin was 27.9%, contracted 120 basis points (bps) for the quarter. SG&A expenses, as a percentage of home sales revenues, were 8.3%, which increased 10 bps from the year-ago quarter.
TOL’s Fiscal 2024 Highlights
Adjusted EPS came in at $13.82, up 11.8% year over year. Total revenues of $10.8 billion in the year were up 8.5%, with deliveries up 13% to 10,813 units. The ASP of delivered units was $976,900, down from $1,027,900 a year ago. Contracts were up 27% in units and dollars.
The company’s adjusted home sales gross margin was 28.4%, contracted 30 bps for the quarter. SG&A expenses, as a percentage of home sales revenues, were 9.3%, which increased 10 bps from the year-ago quarter.
Toll Brothers’ Balance Sheet & Cash Flow
TOL had cash and cash equivalents of $1.303 billion at the fiscal 2024-end compared with $1.3 billion at the fiscal 2023-end. The debt-to-capital ratio improved to 27% from 29.6% at the end of fiscal 2023. The net debt-to-capital ratio also improved to 15.3% from 17.7% in the prior year. At the close of the fourth quarter of fiscal 2024, the company had $1.77 billion available on its $1.96 billion revolving credit facility, set to mature in February 2028.
During fiscal 2024, the company bought back approximately 4.9 million shares at an average price of $127.79 per share, totaling $627.9 million.
TOL’s First-Quarter of Fiscal 2025 Guidance
Toll Brothers expects home deliveries of 1,900-2,100 units (indicating growth at midpoint from 1,927 units delivered in the prior-year quarter) at an average price of $925,000-$945,000 (suggesting a decline from $1,002,600 a year ago).
Adjusted home sales gross margin is expected to be 26.25%, implying a decline from 27.6% in the year-ago period. SG&A expenses are estimated to be 12.7% of home sales revenues, indicating a rise from 11.9% in the year-ago period. The company expects the effective tax rate to be 22%.
What TOL Expects for Fiscal 2025
For fiscal 2025, home deliveries are now anticipated to be in the range of 11,200-11,600 units. The estimated range reflects growth from fiscal 2024. It expects the period-end community count to be 410-450.
The average price of delivered homes is now expected to be $945,000-$965,000, indicating a decline from fiscal 2024.
Toll Brothers now expects an adjusted home sales gross margin of 27.25%. This reflects a decline from 28.4% reported in fiscal 2024.
SG&A expenses, as a percentage of home sales revenues, are now projected to be 9.4%-9.5%, still reflecting an increase from fiscal 2024. The company expects the effective tax rate to be 25.5%.
TOL’s Zacks Rank & Peer Releases
Toll Brothers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton, Inc. (DHI - Free Report) reported fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results, with earnings and revenues missing Zacks Consensus Estimate and decreasing on a year-over-year basis.
D.R. Horton’s quarterly performance fell short of expectations primarily due to a combination of high mortgage rates and buyer hesitancy. DHI expects consolidated revenues in the range of $36-$37.5 billion (below the consensus mark of $39.5 billion) compared with $36.8 billion in fiscal 2023. Homes closed are anticipated within 90,000-92,000 units. The income tax rate is expected to be 24.5%.
NVR, Inc. (NVR - Free Report) reported mixed third-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. On the other hand, both metrics increased on a year-over-year basis.
NVR’s results were backed by improved demand trends, which resulted in higher settlements. Although the cancelation rate increased in the quarter, growth in new orders is encouraging for the company.
Meritage Homes Corporation (MTH - Free Report) reported third-quarter 2024 results, wherein earnings and total closing revenues topped the Zacks Consensus Estimate but declined year over year. This is the seventh consecutive quarter of earnings and revenues beat.
Meritage Homes’ third-quarter results highlight a strategic shift to affordable, quick-turn homes, driving $1.6 billion in revenues and record closing volume. The company reported a 145% backlog conversion and a 17.2% return on equity. Capital allocation focused on growth with $659.4 million in land investments, 7,800 new lots, and $57.1 million returned to shareholders.