Q3 2024 Toll Brothers Inc Earnings Call Transcript
Key Points
- Toll Brothers Inc (TOL) delivered 2,814 homes at an average price of $968,000, generating record third-quarter home sale revenues of $2.72 billion.
- The company's adjusted gross margin of 28.8% exceeded guidance by 110 basis points due to greater efficiencies in home building operations and favorable mix.
- Toll Brothers Inc (TOL) signed 2,490 net contracts for $2.4 billion, up approximately 11% in both units and dollars compared to last year's third quarter.
- The company is on target to reach its goal of operating from 410 communities by fiscal year-end, representing 11% growth compared to the start of the year.
- Toll Brothers Inc (TOL) has repurchased $427 million of its common stock year-to-date and increased its buyback expectations for the full year from $500 million to $600 million.
- Demand in the third quarter was uneven, with a slowdown in June despite a strong start in May and a strong finish in July.
- The average pace of home sales per community was 2.1 homes per month, down slightly from 2.2 homes per month in last year's third quarter.
- The company's third-quarter adjusted gross margin of 28.8% was lower than the 29.3% achieved in the third quarter of 2023.
- SG&A expenses as a percentage of revenue increased to 9.0% in the third quarter compared to 8.6% in the same period last year.
- The company's backlog stood at $7.1 billion and 6,769 homes, indicating a potential challenge in converting backlog into deliveries efficiently.
Good morning, and welcome to the Toll Brothers third-quarter fiscal year 2024 conference call. (Operator Instructions)
Please note this event is being recorded. I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead.
Thank you, Dave. Good morning. Welcome, and thank you for joining us. With me today are Marty Connor, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Wendy Marlette, Chief Marketing Officer; and Gregg Ziegler, Senior VP, Treasurer, and our Head of Investor Relations.
As usual, I caution you that many statements on this call are forward-looking based on assumptions about the economy, world events, housing and financial markets, interest rates, the availability of labor and materials, inflation, and many other factors beyond our control that could significantly affect future results. Please read our statement on forward-looking information in our earnings release of last night and on our
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