Q1 2026 Toll Brothers Inc Earnings Call Transcript
Key Points
- Toll Brothers Inc (TOL) exceeded its revenue guidance, delivering 1,899 homes and generating $1.85 billion in home building revenue, surpassing expectations by approximately $24 million.
- The company reported a 25% increase in earnings per diluted share, reaching $2.19 compared to $1.75 in the previous year's first quarter.
- Toll Brothers Inc (TOL) maintained a strong balance sheet with ample liquidity, low net debt, and a strong investment-grade credit rating.
- The company has a diversified portfolio and an affluent buyer profile, which positions it well to capitalize on improvements in homebuyer demand.
- Toll Brothers Inc (TOL) has a robust land bank with approximately 75,000 lots under control, allowing for continued growth in community count over the next several years.
- The average delivered price was below guidance due to a higher mix of lower-priced finished spec homes.
- Certain markets, such as Tampa, Atlanta, San Antonio, and the Pacific Northwest, remain challenged.
- The company's gross margin is expected to decline sequentially from 26.5% in Q1 to 25.5% in Q2 due to mix changes.
- The company faces potential headwinds from rising lumber prices, which could impact building costs.
- Weather-related disruptions in the mid-Atlantic region, particularly from North Carolina to Georgia, slowed operations for a week to 10 days.
Good day and welcome to the Toll Brothers' first-quarter, fiscal-year 2026 conference call.
(Operator Instructions)
Please also note, today's event is being recorded.
I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead, sir.
Thank you, Rocco. Good morning. Welcome and thank you for joining us.
With me today are Gregg Ziegler, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Wendy Marlett, Chief Marketing Officer, and Karl Mistry, who will be taking over as the third CEO in our company's history on March 30, when I will transition to the Executive Chairman role.
Karl is an outstanding leader who has been with Toll Brothers for over 20 years. He has run home building operations in many of our key markets and currently heads all of our eastern operations. He knows this company inside and out, and I'm very confident he is the right person to lead us through the next phase of growth.
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