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Jan 31, 2020
Toll Brothers Q1 2020 Earnings Report
Toll Brothers' first quarter results for fiscal year 2020 were announced, revealing a mix of increased contract activity and decreased profitability compared to the previous year.
Key Takeaways
Toll Brothers reported a decrease in net income and earnings per share for the first quarter of FY 2020, while net signed contract units and values increased. Home sales revenues slightly decreased, and home building deliveries increased. The company also repurchased a significant number of shares during the quarter.
Net income decreased to $56.9 million, with diluted EPS at $0.41, down from the previous year's $112.1 million and $0.76 respectively.
Home sales revenues were $1.30 billion, a 2% decrease, while home building deliveries increased by 5% to 1,611 units.
Net signed contract units increased by 31% to 1,806, and contract value rose by 28% to $1.49 billion.
The company repurchased 11.7 million shares for $476.0 million, reducing share count by approximately 8%.
Toll Brothers
Toll Brothers
Toll Brothers Revenue by Segment
Revenue by Segment
North Revenue
CapyFin.comMid-Atlantic Revenue
CapyFin.comSouth Revenue
CapyFin.comMountain Revenue
CapyFin.comPacific Revenue
CapyFin.comLand Sales Revenue
CapyFin.com Forward Guidance
Toll Brothers provided financial guidance for the second quarter and full fiscal year 2020, including projected deliveries, gross margins, SG&A expenses, and other income.
Positive Outlook
- Second quarter deliveries are expected to be between 1,850 and 2,050 units with an average price of between $800,000 and $820,000.
- Fiscal Year 2020 deliveries are projected to be between 8,600 and 9,100 units with an average price of between $800,000 and $820,000.
- Second quarter Adjusted Home Sales Gross Margin is anticipated to be approximately 20.50%.
- Fiscal Year 2020 Adjusted Home Sales Gross Margin is expected to be around 21.25%.
- Community count growth of approximately 10% is expected by the end of FY 2020 compared to FYE 2019.
Challenges Ahead
- Second quarter other income, income from unconsolidated entities, and land sales gross profit are projected to be approximately $5 million.
- Fiscal Year 2020 other income, income from unconsolidated entities, and land sales gross profit is expected to be approximately $115 million.
- Second quarter tax rate is estimated to be approximately 26.0%.
- Fiscal Year 2020 tax rate is projected to be approximately 25.0%.
- Fiscal Year 2020 SG&A expense reflects costs in advance of revenues from staffing and advertising associated with the planned increase in community openings.
Revenue & Expenses
Visualization of income flow from segment revenue to net income