Toll Brothers reports Q3 results, lifts stock repurchase plan

Toll Brothers (NYSE: TOL ) released third-quarter financial results and hosted an earnings call on Wednesday.

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Access the full call at Summary Toll Brothers reported a strong third quarter, delivering 2,662 homes and generating $2.6 billion in home sales revenue, exceeding guidance.

The company maintained a focus on luxury move-up buyers, with this segment contributing 61% of home sales revenues.

Net signed contracts increased by 5% year-over-year despite challenging market conditions, with a continued emphasis on price discipline and margin performance.

Strategic initiatives include an 8-10% community count growth for fiscal 2026 and 2027, supported by existing land positions.

The company plans to increase stock repurchases to $700 million for the year, up from the previous $650 million projection.

Toll Brothers reported a strong balance sheet with $3.3 billion in liquidity and a net debt to capital ratio of 15.6%.

Management highlighted the company's ability to navigate market challenges with a durable business model and continued focus on high-margin, customizable luxury homes.

Full Transcript A Good morning and welcome to the Toll Brothers third quarter fiscal year 2026 conference call.

All participants will be in a listen only mode.

Should you need assistance, please signal a conference specialist by pressing the Star key followed by zero.

After today's presentation there will be an opportunity to ask questions.

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The company is planning to end the call at 9:30 when the markets open.

During the question and answer, please limit yourself to one question and one follow up.

Please note this event is being recorded.

I would now like to turn the conference over to Doug Yearly, Executive Chairman.

Please go ahead.

C Thank you Betsy Good morning, welcome and thank you all for joining us.

With me today are Carl Mistry, Chief Executive Officer, Greg Zigler, Chief Financial Officer and Seth Ring, President and Chief Operating Officer.

During today's call I will provide a brief overview of our third quarter results and current market conditions.

Carl will discuss our operating performance and trends across our markets and Greg will review our financial results and our outlook.

Before we begin, please note 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 our website to better understand the risks associated with our forward looking statements.

We are pleased with our third quarter performance in a challenging housing market.

We continue to produce solid Results.

We delivered 2,662 homes and generated $2.6 billion of home sales revenue exceeding the midpoint of our guidance in both units and dollars.

Adjusted gross margin was 25.6% or 35 basis points better than guidance and we generated $280.1 million of earnings or $2.97 per diluted share which also beat guidance.

NET Signed contracts increased 5% compared to the third quarter of last year.

Demand from luxury buyers remained relatively resilient and we continue to benefit from the expansion of our community count.

While orders improved, the overall sales environment remained subdued with low consumer confidence and elevated mortgage rates continuing to weigh on demand.

Consistent with our long standing approach, we continue to prioritize price discipline and margin performance over sales pace, a strategy that we believe is particularly important in the current environment.