Toll Brothers Expected to Record Higher Revenues in Hot Housing Market – Earnings Snapshot

By Denny Jacob

Toll Brothers Inc. is expected to report second-quarter results after the market closes Tuesday. Here’s what you need to know:

PROFITS: The luxury homemaker is expected to post net income of $179.3 million for the quarter, up from $128 million in net income a year earlier, according to FactSet.

REVENUE: The Fort Washington, Pa.-based company is expected to post $2.08 billion in revenue, up from $1.93 billion a year ago, according to FactSet.


— DEMAND: While the housing market is still warm by historical standards, the market is cooling slightly. A combination of rapidly rising mortgage rates and record home prices is cooling the US housing market. April sales fell for the third month in a row and fell to their weakest pace in nearly two years.

— WINDS AGAINST: In addition to rising mortgage rates and record home prices, investors will be looking for additional information on home demand amid headwinds such as record inflation, concerns about a recession and continued supply chain disruptions. General Manager Douglas Yearley Jr. said last quarter’s supply chain challenges, labor shortages and municipal delays remained a challenge and those issues were exacerbated when the Omicron wave peaked in January, resulting in fewer deliveries than expected.

— GUIDANCE: As all of these factors present challenges for the housing market, look for any changes in the projections for the full year. Toll Brothers previously forecast home sales revenue growth of 20% and an adjusted gross margin of around 27.5%.

Write to Denny Jacob at [email protected]

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