Q2 2025 Toll Brothers Inc Earnings Call Transcript
Key Points
- Toll Brothers Inc (TOL) delivered 2,899 homes at an average price of approximately $934,000, generating record second-quarter home sales revenue of $2.71 billion, exceeding guidance by $236 million.
- The company posted an adjusted gross margin of 27.5% and an SG&A margin of 9.5%, both better than guidance.
- Toll Brothers Inc (TOL) reaffirmed its guidance for fiscal 2025, projecting home sales revenue of $10.9 billion at the midpoint and earnings of approximately $14 per diluted share.
- The company has a strong financial position with $686 million in cash and cash equivalents and a net debt-to-capital ratio of 19.8%.
- Toll Brothers Inc (TOL) increased its projected share repurchases in fiscal 2025 from $500 million to $600 million, reflecting confidence in its financial health.
- Net agreements signed in the second quarter were down approximately 13% in units and 11% in dollars compared to the previous year, indicating softer demand.
- The average sales price in the quarter decreased to approximately $983,000 from $1 million in the first quarter.
- Incentives increased to approximately 7% of the average sales price, up from the recent average of 5% to 6%, reflecting a need to boost demand.
- The backlog at the end of the second quarter was down 7% in dollars and 15% in units compared to a year ago.
- Market conditions remain challenging with economic uncertainty affecting consumer confidence and demand.
Good morning, everyone, and welcome to the Toll Brothers second-quarter fiscal year 2025 conference call. (Operator Instructions) Please also note, today's event is be recorded. At this time, I'd like to turn the floor over to Douglas Yearley, CEO. Please go ahead.
Thank you, Jamie. Good morning. Welcome, and thank you all for joining us. With me today are Marty Connor, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Wendy Marlett, Chief Marketing Officer; and Gregg Ziegler, Senior VP, Treasurer and Head of Investor Relations.
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 of last night, and on
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