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Toll Brothers Gains as Sales of Luxury Homes Stay Hot

Stock MarketsDec 08, 2021 09:44
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By Dhirendra Tripathi

Investing.com – Toll Brothers stock (NYSE:TOL) rose nearly 2% in premarket trading Wednesday as the luxury home builder continued to ride the housing boom in the fourth quarter to deliver solid earnings while guiding for strong growth in the current year and going into 2023.

After the start of trading, the shares were up 0.2%.

The company reaped the benefits of a roaring equity market as wealthy buyers liquidated part of their stocks to enjoy some luxury properties while also diversifying their investments.

As a result, it also improved its margins and closed October with a record backlog value of $9.5 billion, up 49% year-on-year. The number of homes in its backlog were 10,302, up 32%.

The average price of homes in that backlog was $922,100, up around 13% from $818,200 a year earlier.

Purchase contracts during the quarter were down 13% from a year earlier to 2,957 units. Contracted value was up though, by 10% at $3 billion.

“We, like the rest of the industry, continue to be challenged by significant supply chain and labor constraints that are extending delivery times for our homes. Notwithstanding these issues, which we expect to continue for the foreseeable future, we project 20% revenue growth in FY 2022,” Chairman and Chief Executive Officer Douglas C. Yearley, Jr, said in a statement.

Home sales revenue rose just over 21% in the financial year that ended October 31. It rose 18% during the fourth quarter to $2.95 billion.

Adjusted profit per share nearly doubled to $3.02.

The company increased its community count by 7% to 340 by the end of the financial year. It projects 10% growth in the count in the current year and said it owns or controls enough land for additional meaningful growth in the next financial year as well.

According to Yearley, peak lumber prices from the spring of 2020 should flow through its first half deliveries.

 

 

 

Toll Brothers Gains as Sales of Luxury Homes Stay Hot
 

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