Toll Brothers Q3 EPS Misses, But Reaffirms FY26 Guidance and Boosts Buyback to $700M

summarizeSummary

Toll Brothers reported lower Q3 earnings and deliveries but reaffirmed full-year guidance and raised its buyback target to $700 million.

check_boxKey Events · Earnings and Guidance · TOL

• Q3 Earnings Decline

  Net income fell 24% to $280.1 million ($2.97 per diluted share) from $369.6 million ($3.73) a year ago. Home sales revenue dropped 8% to $2.65 billion on 2,662 deliveries, down 10% from 2,959.

• Margin Compression

  Home sales gross margin was 23.9%, down from 25.6% last year. Adjusted gross margin (excluding interest and inventory write-downs) was 25.6%, down from 27.5%.

• Full-Year Guidance Reaffirmed

  Management reaffirmed FY2026 guidance for approximately $10.5 billion in home sales revenue and adjusted gross margin of 26.1%. Q4 guidance calls for 3,450-3,550 deliveries and 26.0% adjusted gross margin.

• Buyback Increased to $700M

  The company raised its projected FY2026 share repurchases from $650 million to $700 million. In Q3, it repurchased 1.4 million shares for $206.8 million at an average price of $148.63.

auto_awesomeAnalysis · TOL · Real Estate & Construction

Toll Brothers reported Q3 FY2026 earnings below last year's levels, with net income down 24% to $280.1 million and EPS of $2.97 versus $3.73 a year ago. Home sales revenue fell 8% to $2.65 billion on 10% fewer deliveries, reflecting a softer housing market. However, the company exceeded the midpoint of its guidance, grew net signed contracts 5% year over year, and reaffirmed full-year guidance for approximately $10.5 billion in home sales revenue and a 26.1% adjusted gross margin. Management also increased its fiscal 2026 share repurchase target from $650 million to $700 million, signaling confidence in cash generation and balance sheet strength. The results show resilience in a challenging market, but the year-over-year decline in profitability and deliveries is a key concern for investors.