Luxury home contracts signed by Toll Brothers hit a new record in the third quarter, signaling a strong rebound in demand despite the coronavirus pandemic.
“Our net contracts signed for the third quarter were our highest third quarter on record in units and dollars, and our contracts by community, at 8.5, were the third highest quarter in fifteen years,” said Douglas C. Yearley, Jr, President and CEO of Toll Brothers. . the company’s earnings release said Tuesday. “This strength continued in August. We attribute the surge in demand to a number of factors, including historically low interest rates, continued housing under-supply, and consumers have become more focused on the importance of the home than ever before. ”
The company’s net number of signed contract homes jumped 26% to 2,833 units from 2,241 units the previous year, while the contract value rose 18% to $ 2.21 billion, from 1 , 87 billion dollars.
NEW FLAME OF HOUSE SALES IN JULY, HIGHEST SINCE 2006
Toll Brothers reported net income of $ 114.8 million, or 90 cents per share, compared to 146.3 million, or $ 1.00 per share the previous year. Meanwhile, home sales revenue fell 7% to $ 1.63 billion from $ 1.76 billion the previous year, while shipments edged up to 2,022 units from 1,994 units the previous year.
The company noted that the home order backlog for the third quarter was 7,239 units worth $ 6.09 billion compared to 6,839 units worth $ 5.84 billion in 2019. The average price of backlog homes was $ 840,600, up from $ 854,500 the year before.
Toll Brother’s adjusted gross home sales margin was 21.9%, compared to 23.1% last year.
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Going forward, the company expects fourth quarter deliveries of between 2,400 and 2,550 homes with an average price of between $ 815,000 and $ 835,000 and an adjusted gross margin of approximately 21.5%.
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The luxury home rebound comes the same day as the Commerce Department report that overall new home sales rose 13.9% to a seasonally adjusted annual rate of 901,000 units last month, the highest level since December 2006.
Toll Brothers stock closed at $ 46.05 per share at the end of Tuesday’s trading session and is currently up more than 2% in after-hours trading.
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