FORT WASHINGTON, PA — Toll Brothers, Inc. (NYSE: TOL) reported its financial highlights for the first quarter of fiscal year 2025, reflecting a mixed performance as it navigates a shifting housing market. The company posted net income of $177.7 million, or $1.75 per diluted share, which represents a decline from $239.6 million, or $2.25 per diluted share, in the same quarter of FY 2024.
Home sales revenues for Q1 2025 reached $1.84 billion, down 5% year-over-year, despite a 3% increase in delivered homes, totaling 1,991. The average home price clocked in at approximately $925,000. Net signed contract value showed robust growth, rising 12% to $2.31 billion, with contracted homes increasing 13% to 2,307 units.
“Our adjusted gross margin was 26.9% in the quarter, or 65 basis points better than guidance, and our SG&A expense, as a percentage of homebuilding revenues, was 13.1%, or 40 basis points above guidance,” said Douglas C. Yearley, Jr., Chairman and CEO of Toll Brothers. “While our net income and earnings per share came in below expectations, this was due primarily to impairments and a delay in the sale of a stabilized apartment property in one of our joint ventures. Our core homebuilding operations met expectations in the quarter.”
The company emphasized the mixed results in the early spring selling season, with healthy demand in the higher-end markets but challenges in affordability at the lower end. “We continue to strategically manage our pricing, incentives, and spec starts on a community-by-community basis to best match local selling conditions and to appropriately balance pace and price,” said Yearley.
Toll Brothers ended the quarter with a backlog of $6.94 billion, representing 6,312 homes, down 2% and 6%, respectively, compared to the previous year. The company also reported $574.8 million in cash and $1.77 billion available under its $2.35 billion senior unsecured revolving credit facility, enhanced by extended maturity dates and increased liquidity. At quarter-end, Toll Brothers controlled or owned approximately 77,700 lots, ensuring a robust pipeline for future development.
Yearley expressed optimism about the company’s position in the market, stating, “We believe the long-term outlook for the new home market remains very positive and continues to be supported by strong fundamentals. These include favorable demographics, the structural undersupply of millions of homes in the U.S., the aging stock of existing homes, and the accumulated wealth built up from years of stock market and home price appreciation.”
Toll Brothers reaffirmed its guidance for FY 2025, projecting strong deliveries, adjusted gross margin, SG&A margin, and community count growth. Yearley concluded, “With our industry-leading brand, well-located communities at the corner of Main & Main, and our affluent customer base, our unique niche in the luxury market positions us well for continued success.”
With sound financial management, strategic land holdings, and a focus on high-quality homes, Toll Brothers remains well-equipped to capitalize on long-term market trends while navigating near-term challenges in affordability and inventory.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.