- Toll Brothers reported a strong QQ2 2024 with record quarterly home-building revenues of $2.65 billion on 2,641 delivered homes at an approximate average price of $1.0 million, underpinning a revenue level of roughly $2.84 billion and a GAAP net income of $481.6 million ($4.60 per share, diluted $4.55). The quarter featured a higher-than-guidance adjusted gross margin of 28.2% and SG&A leverage, contributing to solid operating performance.
- Management raised full-year guidance on higher revenue and profit expectations, driven by resilient demand in a low-inventory market, a wide price-point strategy, and an expanded supply of spec homes. For 2024, Toll now targets about 10,600 deliveries at an average price near $965k, translating to roughly $10.23 billion in revenue, with an adjusted gross margin around 28.0% and SG&A margin near 9.6%. The company expects an operating margin >18% and diluted EPS around $14 for the year, with ROE near 22%.
- The quarterly performance reflects disciplined land strategy, strong cash generation, and capital return to shareholders (share repurchases of ~$181 million and a 10% dividend increase). Toll remains net debt to capital around 18.7%, with ample liquidity (~$2.7B+ total liquidity) and no material near-term debt maturities until 2026.
- Key risks include a continued high-rate environment impacting mortgage demand, potential volatility in land costs, competitive dynamics in a market with increasing spec activity, and the need to sustain pricing power as the mix shifts toward spec and affordable-luxury products. The growth trajectory remains anchored in expanding communities, a controlled land pipeline (~72,000 lots controlled, ~70-75k in the near term), and a continued focus on high-return projects.