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Apr 30, 2021
Toll Brothers Q2 2021 Earnings Report
Toll Brothers reported record second-quarter results, driven by strong demand and strategic expansion.
Key Takeaways
Toll Brothers announced record second-quarter results for fiscal year 2021. Net signed contract value and contracted homes reached all-time highs. The company is raising its fiscal year 2021 guidance on nearly all key metrics, expecting continued margin improvement and projecting a return on beginning equity in excess of 20% in fiscal 2022.
Net income and earnings per share were $127.9 million and $1.01 per share diluted, compared to net income of $75.7 million and $0.59 per share diluted in FY 2020’s second quarter.
Home sales revenues were a second quarter record $1.84 billion, up 21% compared to FY 2020’s second quarter; delivered homes were 2,271, up 18%.
Net signed contract value was $3.05 billion, up 97% compared to FY 2020’s second quarter; contracted homes were 3,487, up 85%.
Backlog value was $8.69 billion at second quarter end, up 58% compared to FY 2020’s second quarter; homes in backlog were 10,104, up 57%.
Revenue by Segment
Forward Guidance
Toll Brothers provided financial guidance for the third quarter and full fiscal year 2021.
Positive Outlook
- Deliveries are expected to be 2,675 units for the third quarter.
- Full fiscal year 2021 deliveries are expected to be between 10,200 and 10,400 units.
- The average delivered price is projected to be between $820,000 and $840,000 for the third quarter.
- The average delivered price for the full fiscal year 2021 is expected to be between $805,000 and $825,000.
- Adjusted home sales gross margin is anticipated to be 24.8% for the third quarter and 24.6% for the full fiscal year 2021.
Challenges Ahead
- SG&A, as a percentage of home sales revenues, is expected to be 11.6% for the third quarter and 11.8% for the full fiscal year 2021.
- The quarter-end community count is projected to be approximately 310 for the third quarter and approximately 340 for the full fiscal year 2021.
- Other income, income from unconsolidated entities, and gross margin from land sales and other is expected to be $20.0 million for the third quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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