Toll Brothers Reports FY 2026 First Quarter Results

Core Insights - Toll Brothers, Inc. reported strong first-quarter results for FY 2026, exceeding guidance across most metrics, with home sales revenues of $1.85 billion and earnings per diluted share of $2.19, a 25% increase year-over-year [3][8]. Financial Performance - The company delivered 1,899 homes at an average price of $977,000, generating home sales revenues of $1.85 billion, slightly up from $1.84 billion in FY 2025 [3][8]. - Adjusted gross margin for the quarter was 26.5%, exceeding guidance by 25 basis points, while SG&A expenses as a percentage of homebuilding revenues were 13.9%, better than guidance by 30 basis points [3][8]. - Net income for the quarter was $210.9 million, compared to $177.7 million in the same quarter of FY 2025, with pre-tax income rising to $273.6 million from $221.4 million [8][14]. Sales and Contracts - The company signed 2,303 net contracts valued at $2.4 billion, flat in units but up 3% in dollars year-over-year, with an average sales price of $1,033,000 [3][8]. - The backlog value at the end of the first quarter was $6.02 billion, down from $6.94 billion at the end of FY 2025, with homes in backlog decreasing to 5,051 from 6,312 [8][14]. Market Position and Strategy - Toll Brothers continues to focus on the luxury market, benefiting from a broad geographic footprint and a diverse range of home offerings [4][5]. - The company owns or controls approximately 75,000 lots, allowing for an annual community count growth of 8% to 10% in FY 2026 and beyond [5][15]. Recognition and Brand Strength - Toll Brothers was named the 1 Most Admired Home Builder in Fortune magazine's 2026 list of the World's Most Admired Companies, marking the ninth consecutive year of receiving this honor [6][20]. Financial Guidance - For the second quarter of FY 2026, the company projects deliveries of 2,400 to 2,500 units and an average delivered price per home of $975,000 to $985,000 [13]. - Full fiscal year guidance includes 10,300 to 10,700 units delivered and an adjusted home sales gross margin of 26.00% [13]. Balance Sheet and Liquidity - At the end of the first quarter, the company had $1.20 billion in cash and cash equivalents, with a debt-to-capital ratio of 24.4%, down from 26.0% at the end of FY 2025 [15][29]. - The company also extended the maturity of its senior unsecured revolving credit facility and increased the total amount available under the facility [15]. Shareholder Returns - The company repurchased approximately 0.3 million shares at an average price of $146.75 per share, totaling $50.5 million [8]. - A quarterly dividend of $0.25 per share was paid to shareholders, reflecting the company's commitment to returning value to stockholders [15][32].