Scott Olson
Toll Brothers (NYSE:TOL) stock rose 2.6% in Tuesday after-hours trading after the homebuilder posted stronger-than-expected fiscal Q4 earnings and issued solid guidance for Q1 and FY2024 deliveries.
Toll (TOL) said it expects that a recent 75-basis-point drop in mortgage rates will reduce inflation and add to already solid demand.
The homebuilder expects Q1 2024 deliveries of 1.80K-1.90K, higher than the Visible Alpha consensus of 1.78K, and full-year 2024 deliveries of 9.85K-10.35K vs. the Visible Alpha estimate of 9.77K. Adjusted homes sales gross margin is expected to be 28.0% for Q1 and 27.9% for FY2024.
In addition, the company expects its community count to increase about 10% in fiscal 2024 from the 370 communities it operated at the end of fiscal 2023.
“Over the long-term, the outlook for the new home market remains bright, supported by favorable demographics, the supply-demand imbalance that has resulted from over a decade of underproduction, and the aging of the country’s existing housing stock,” said Toll (TOL) Chairman and CEO Douglas C. Yearley, Jr.
Q4 GAAP EPS of $4.11, topping the $3.72 consensus, rose from $3.73 in Q3 and declined from $5.63 in Q4 2022.
Revenue for the quarter ended Oct. 31, 2023 increased to $3.02B from $2.69B in the prior quarter and $3.71B a year ago. That exceeded the average analyst estimate of $2.79B.
Q4 deliveries of 2.76K vs. 2.52K; on a Y/Y basis, deliveries fell 27%.
Adjusted home sales gross margin of 29.1% increased from 26.7% in the previous quarter and 29.0% in the year-ago period.
Backlog value was $6.95B at the end of Q4, compared with $7.9B at the end of Q3 and $8.87B at the end of Q4 2022.
Conference call on Dec. 6 at 8:30 AM ET.