Luxury homebuilder Toll Brothers announced strong financial performance for the third quarter, attributing its success to a combination of factors, including a shortage of resale inventory. The company reported a net income of $414.8 million, or $3.73 per share, representing a significant increase compared to the previous year’s earnings of $273.5 million, or $2.35 per share. This surpassed analysts’ expectations of $2.85 per share.
Toll Brothers’ revenue also saw a notable boost, climbing to $2.69 billion from $2.49 billion. Analysts projected revenue of $2.4 billion, making this figure even more impressive.
The backlog value for the company stood at $7.9 billion by the end of the third quarter, marking a 30% decrease compared to the same period last year.
Douglas Yearley Jr., Chief Executive of Toll Brothers, highlighted the positive market conditions for new homes, citing the scarcity of resale inventory, favorable demographic trends, and a long-standing underproduction of homes as contributing factors to their success. The company’s strategic decision to increase the supply of spec homes in recent quarters also played a role in their impressive performance.
Despite challenges posed by rising interest rates, Yearley noted that these circumstances further solidify the low levels of resale inventory, benefiting the new home market.
Toll Brothers’ strong third-quarter results highlight the company’s ability to thrive in a competitive market.
