Toll Brothers Inc Reports Third Quarter Fiscal 2024 Financial Results
Intellectia.AI Updated: 2024-08-20
Toll Brothers, Inc. Reports Third Quarter Fiscal 2024 Financial Results
FORT WASHINGTON, Pa., Aug. 20, 2024 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced financial results for its third quarter ended July 31, 2024.
Key Financial Metrics
| Metric | Q3 FY2024 | Q3 FY2023 | YoY Change | Q2 FY2024 | QoQ Change | Consensus Estimates | Actual vs. Consensus |
|---|---|---|---|---|---|---|---|
| Revenue | $2.72 billion | $2.67 billion | +2% | $2.71 billion | +0.37% | $2.71 billion | Beat by $0.01 billion |
| Earnings Per Share (EPS) | $3.60 | $3.73 | -3.49% | $3.31 | +8.76% | $3.31 | Beat by $0.29 |
| Net Income | $374.6 million | $414.8 million | -9.69% | - | - | - | - |
| Pre-tax Income | $503.6 million | $553 million | -8.94% | - | - | - | - |
| Home Sales Gross Margin | 27.4% | 27.8% | -0.4pp | - | - | - | - |
| Adjusted Home Sales Gross Margin | 28.8% | 29.3% | -0.5pp | - | - | - | - |
Interpretation: Toll Brothers exceeded consensus estimates for revenue and EPS. Although there was a slight decline in year-over-year net income and gross margins, the company demonstrated strong operational efficiency with a significant quarter-over-quarter increase in EPS.
Revenue Performance by Segment
| Segment | Q3 FY2024 Revenue | FY2024 Guidance | Comparison to Guidance |
|---|---|---|---|
| Home Sales | $2.72 billion | Exceeded | Positive Outperformance |
| Net Signed Contracts | $2.41 billion | - | - |
| Backlog | $7.07 billion | - | - |
Interpretation: The company's segment reporting showed robust performance, particularly in home sales revenue which exceeded guidance. Net signed contracts also saw an 11% increase year-over-year, though the backlog value saw a decline compared to the same period last year.
Operational Data
| Data | Q3 FY2024 | Q2 FY2024 | Q3 FY2023 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Delivered Homes | 2,814 | - | 2,535 | +11% | - |
| Contracted Homes | 2,490 | - | 2,279 | +11% | - |
| Homes in Backlog | 6,769 | 7,313 | - | -7% | - |
| Community Count | 404 | 386 | - | +4.7% | - |
| Lots Owned & Optioned | 72,700 | - | - | - | - |
| SG&A as % of Home Sales Revenue | 9.0% | 8.6% | - | +0.4pp | - |
Interpretation: The operational data confirm strong home delivery and contracted homes figures, reflecting healthy demand. Despite a slight increase in SG&A expenses relative to revenues, the company has increased its community count and maintains a significant inventory of lots for future growth.
Comments from Company Officers
Douglas C. Yearley, Jr., Chairman and CEO of Toll Brothers, stated, “We are very pleased to report another quarter of strong results. Our adjusted gross margin, at 28.8% in the quarter, significantly exceeded guidance due to favorable mix and greater efficiencies. With mortgage rates at their lowest point in a year, we are optimistic that demand will remain solid through the end of fiscal 2024 and into 2025. Based on our third quarter outperformance, we are raising our full-year guidance across all key home building metrics.”
Share Repurchase Program
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 during the quarter, bringing full-year repurchases to $427.1 million. Toll Brothers now expects approximately $600 million of share repurchases in fiscal 2024.
Dividends
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.
Forward Guidance
Douglas C. Yearley, Jr. announced that based on the strong third-quarter performance, Toll Brothers is raising its full-year guidance, expecting to earn between $14.50 and $14.75 per diluted share with an adjusted gross margin expected to be approximately 28.3% for the full year.
Stock Price Movement
Following the earnings release, Toll Brothers' stock experienced a minor correction of -0.097%, reflecting market reactions to the earnings report.
Overall, Toll Brothers' third-quarter financial results indicate solid performance and strategic positioning for continued growth in the luxury home market.
