First quarter results for Toll Brothers—No. 10 on the latest Builder 100—met or exceeded guidance across nearly all metrics, the company reported. For the period ending Jan. 31, Toll Brothers delivered 1,899 homes at an average price of $977,000, generating home sales revenues of $1.85 billion.
Douglas Yearley, Jr., outgoing chairman and CEO, said: “Our adjusted gross margin was 26.5% in the quarter, 25 basis points better than guidance, and our SG&A expense, as a percentage of home building revenues, was 13.9%, 30 basis points better than guidance. As a result, we earned $2.19 per diluted share in the quarter, a 25% increase compared to the first quarter of fiscal 2025. In addition, we signed 2,303 net contracts for $2.4 billion in the quarter, flat in units but up 3% in dollars year over year as our average sales price increased to $1,033,000.
“We continue to be very pleased with our focus on the luxury market and its more affluent customer base. We also continue to benefit from our broad geographic footprint, the widest variety of home offerings and price points in the industry, and our balanced mix of build-to-order and spec homes. Our business model and strategy have allowed us to perform well in the current environment, giving us the confidence to maintain our full year guidance.”
At the end of Q1, Toll Brothers owned or controlled approximately 75,000 lots, supporting projected community growth of 8% to 10% annually in fiscal 2026 and beyond, while maintaining a solid balance sheet and strong liquidity. The company’s net signed contract value was $2.38 billion compared to $2.31 billion in FY 2025’s first quarter; contracted homes were 2,303 compared to 2,307.
Backlog value was $6.02 billion at Q1 end compared to $6.94 billion at FY 2025’s Q1 end; homes in backlog were 5,051 compared to 6,312. Home sales gross margin was 24.8%, compared to FY 2025’s Q1 home sales gross margin of 25.0%.
Additionally, the company substantially completed its previously announced sale of approximately half of its Apartment Living portfolio, including its operating platform, to Kennedy Wilson for net cash proceeds of approximately $330 million. Toll Brothers intends to exit the multifamily development business by selling its remaining Apartment Living assets over the next several years.
For the second quarter, the company expects deliveries of 2,400 to 2,500 units, an average delivered price per home of $975,000 to $985,000, adjusted home sales gross margin of 25.5%, SG&A as a percentage of home sales revenues of 10.7%, and a period-end community count of 455, with a 26% tax rate.
For the full fiscal year, it expects deliveries of 10,300 to 10,700 units, an average delivered price per home of $970,000 to $990,000, adjusted home sales gross margin of 26%, SG&A of 10.25% of home sales revenues, community count of 480 to 490, other income and related items of $130 million, and a 25.5% tax rate.
