FORT WASHINGTON, Pa. - Toll Brothers , Inc. (NYSE:TOL), the nation's premier builder of luxury homes, today announced a robust performance for its second quarter ended April 30, 2024. The company's stock responded positively to the news, with a modest increase of 0.99%.
The company reported a significant earnings per share (EPS) of $4.55, outpacing the analyst consensus of $4.14. Revenue also exceeded expectations, reaching $2.84 billion against the estimated $2.58 billion.
The second quarter results showcased a substantial year-over-year (YoY) improvement. Net income soared to $481.6 million from $320.2 million in the same quarter last year, with EPS jumping 60%. Home sales revenues climbed 6% YoY, with delivered homes increasing by the same percentage. The company's net signed contract value surged 29% YoY, and contracted homes rose by 30%.
Despite these gains, the company's backlog value dipped 12% compared to the previous year, and homes in the backlog saw a 6% decrease. However, the adjusted home sales gross margin was reported at 28.2%, 60 basis points above guidance, and SG&A expenses were 9.0% of home sales revenues, 70 basis points better than anticipated.
Douglas C. Yearley, Jr., chairman and chief executive officer, expressed satisfaction with the results, attributing the success to strong home building performance and a strategic sale of land. Yearley highlighted the company's effective strategies, including broadening price points and increasing spec homes, which have contributed to market share growth and improved operating margins.
In light of these results, Toll Brothers has raised its full-year revenue and earnings guidance, now expecting to earn approximately $14.00 per diluted share in fiscal 2024 with a return on beginning equity of around 22%.
Looking ahead, Toll Brothers anticipates third-quarter deliveries between 2,750 and 2,850 units with an average delivered price per home of $950,000 to $960,000. The adjusted home sales gross margin is expected to be around 27.7% for the third quarter and approximately 28.0% for the full fiscal year 2024.
Investors are encouraged by Toll Brothers' solid financial position, more efficient operations, and strong cash flow generation, which the company believes will support continued investment in growth while also returning cash to shareholders. The company's commitment to delivering shareholder value is further evidenced by a 10% increase in its quarterly dividend and a $181 million repurchase of common stock during the quarter.
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