Toll Brothers Shares Soar Afterhours On Solid Q2 Results Beat

Toll Brothers Inc TOL reported second-quarter revenue increased by 18% year-over-year to $2.28 billion, beating the consensus of $2.06 billion. EPS was $1.85, above the consensus of $1.54.
The gross margin of home sales improved to 24.1% from 21.9% in 2Q21. The adjusted margin was 26.1% versus 24.4%.
The operating income increased by 52.8% to $281.66 million, and the margin expanded by 281 bps to 12.4%. SG&A, as a percentage of home sales revenues, was 11.1%, compared to 11.9% in 2Q21.
The net signed contract value was $3.1 billion, up 1% Y/Y, and contracted homes were 2,874, down 18%. Backlog value was $11.7 billion, up 35% Y/Y; homes in backlog were 11,768, up 16% Y/Y.
Buyback: During the quarter, TOL repurchased ~2.2 million shares at an average price of $48.30 per share for ~$106.5 million. The board refreshed the authorization for repurchase by up to 20 million shares — or ~$900 million at the current market price.
The company ended the quarter with ~$535 million in cash and cash equivalents. Q2’s debt-to-capital ratio was 33.1%, compared to 31.9% in 2Q21.
3Q22 Outlook: Toll Brothers expects Deliveries of 2,750 units, with an Average Delivered Price per Home of $895,000 -$915,000.
It expects Adjusted Home Sales Gross Margin of 27% and SG&A, as a Percentage of Home Sales Revenues, of 10.5%.
FY22 Outlook: The company expects Deliveries of 11,000 -11,500 units, with an Average Delivered Price per Home of $890,000 -$910,000. It expects Adjusted Home Sales Gross Margin of 27.5% and SG&A, as a Percentage of Home Sales Revenues, of 10.4%.
Price Action: TOL shares are trading higher by 5.19% at $46.85 during the post-market session on Tuesday.
Photo via Flickr

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