Toll Brothers (TOL) Q3 2024 earnings summary

Executive summary

• Delivered 2,814 homes in Q3 FY24, up 11% year-over-year, with record home sale revenues of $2.72–$2.73 billion and an average price of $968,000.

• Net income for Q3 was $374.6 million ($3.60 per diluted share), down from $414.8 million in Q3 FY23; pre-tax income was $503.6 million.

• Net contracts signed were 2,490 for $2.4 billion, up 11% in both units and dollars year-over-year.

• Backlog at quarter end was $7.07 billion and 6,769 homes, down 10% in value and 7% in units from the prior year.

• Raised full-year guidance for adjusted gross margin (now ~28.3%) and EPS ($14.50–$14.75); expects 22.5% return on beginning equity.

Financial highlights

• Q3 home sale revenues reached a record $2.72–$2.73 billion, with 2,814 homes delivered, up 11% year-over-year.

• Adjusted gross margin was 28.8% (vs. 29.3% prior year), exceeding guidance by 110 basis points.

• SG&A expense was 9.0% of home sale revenues, 20 basis points better than guidance.

• Pre-tax income was $503.6–$504 million; net income $374.6 million.

• Book value per share at Q3 end was $73.46, up from $65.49 at FY23 year-end.

Outlook and guidance

• Full-year deliveries guidance raised to 10,650–10,750 homes; average delivered price guidance increased to $975,000.

• Adjusted gross margin guidance raised to 28.3% for FY24; Q4 projected at 27.5%.

• SG&A expected at 8.6% for Q4 and 9.4% for the full year.

• Full-year EPS expected between $14.50 and $14.75; ROE projected at 22.5%.

• Expects to operate from 410 communities by year-end, representing 11% growth.