Q2 2024 Toll Brothers Inc Earnings Call Transcript
Key Points
- Toll Brothers Inc (TOL) delivered 2,641 homes at an average price of approximately $1 million, generating record second quarter home sales revenues of $2.65 billion, up 6% compared to last year.
- The company signed 3,041 net agreements for $2.94 billion, up 30% in units and 29% in total dollars compared to last year.
- Adjusted gross margin was 28.2% in the second quarter, 60 basis points better than guidance.
- SG&A expense as a percentage of home sales revenues was 9.0%, 70 basis points better than guidance.
- Toll Brothers Inc (TOL) raised its full-year 2024 revenue and earnings guidance, expecting to deliver 10,600 homes at an average price of approximately $965,000, resulting in $10.23 billion of revenue.
- The average price of contracts signed in the quarter was approximately $967,000, down about 1% compared to last year and down 4.4% sequentially.
- Spec homes generally carry a lower margin compared to build-to-order homes, with spec homes delivered at a 26.1% margin compared to 29.8% for build-to-order homes.
- Write-offs in home sales gross margin totaled $28.4 million in the quarter, compared to $11.1 million in the second quarter of 2023.
- SG&A as a percentage of revenue is expected to tick up about 20 basis points quarter-over-quarter, despite slightly higher revenue.
- The company is seeing modest increases in resale inventory in some markets, which could impact future demand and pricing strategies.
Good morning, and welcome to the Toll Brothers Second Quarter Fiscal Year 2024 Conference Call. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) The company is planning to end the call at 9:30 when the market opens. (Operator Instructions). Please note today's event is being recorded. I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead, sir.
Thank you, Rocco. Good morning. Welcome, and thank you all for joining us. 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 last night and on our website to better understand the risks associated with our forward
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