Toll Brothers(US:TOL)2025-02-18 21:39Financial Performance - In the first quarter of FY 2025, Toll Brothers delivered 1,991 homes at an average price of approximately $925,000, generating home sales revenues of $1.84 billion, a 5% decrease compared to FY 2024's first quarter[4][6]. - Net income for the first quarter was $177.7 million, or $1.75 per diluted share, down from $239.6 million, or $2.25 per diluted share, in FY 2024's first quarter[6][11]. - Home sales revenue for the three months ended January 31, 2025, was $1,840,776, a decrease of 4.7% from $1,931,836 in the same period of 2024[29]. - Total consolidated revenues for the three months ended January 31, 2025, were $1,859.1 million, a decrease of 4.5% from $1,947.8 million in the same period of 2024[32]. - Basic earnings per share decreased to $1.76 in Q1 2025 from $2.28 in Q1 2024, representing a decline of 22.8%[29]. Sales and Contracts - Net signed contracts for the first quarter totaled $2.31 billion, representing a 12% increase in dollar value and a 13% increase in units compared to the same period last year[5][6]. - Total contracts for the three months ended January 31, 2025, increased to $2,307.2 million, up 11.7% from $2,064.8 million in Q1 2024[32]. - Total home sales units increased to 1,991 in Q1 2025 from 1,927 in Q1 2024, representing a growth of 3.3%[32]. Backlog and Inventory - The backlog value at the end of the first quarter was $6.94 billion, down 2% year-over-year, with homes in backlog decreasing by 6% to 6,312 units[6][11]. - The backlog of homes as of January 31, 2025, was valued at $6,938.4 million, a decrease of 2.0% from $7,081.1 million in January 2024[32]. - Total inventory increased to $10,677,502 as of January 31, 2025, compared to $9,712,925 as of October 31, 2024, reflecting a rise of 9.9%[27]. Margins and Expenses - The adjusted home sales gross margin for the quarter was 26.9%, down from 28.9% in FY 2024's first quarter, while the home sales gross margin was 25.0% compared to 27.6% in the prior year[6][11]. - Gross margin for home sales decreased to 25.0% in Q1 2025 from 27.6% in Q1 2024, reflecting increased costs[29]. - SG&A expenses as a percentage of home sales revenues increased to 13.1%, compared to 11.9% in FY 2024's first quarter[6][11]. Financial Position and Debt - The company ended the first quarter with approximately 77,700 lots owned or controlled, with 56% of these lots controlled, ensuring sufficient land for growth[7][13]. - The net debt-to-capital ratio improved to 21.1% as of January 31, 2025, compared to 15.2% on October 31, 2024[44]. - The company has extended the maturity dates of its term loan and revolving credit facilities to February 2030, increasing the capacity of its revolving credit by nearly $400 million[7][13]. Other Financial Metrics - Customer deposits held in escrow increased to $112,671 as of January 31, 2025, from $109,691 as of October 31, 2024[27]. - Interest expense charged to home sales cost of revenues was $20,076 for the three months ended January 31, 2025, compared to $23,578 in the same period of 2024[31]. - The effective tax rate for the three months ended January 31, 2025, was 19.7%, down from 23.0% in the same period of 2024[29]. - The company reported a loss from unconsolidated entities of $8,743 for the three months ended January 31, 2025, slightly improved from a loss of $9,172 in the same period of 2024[29]. Regional Performance - The South region reported revenues of $506.3 million in Q1 2025, a decrease of 5.0% from $532.9 million in Q1 2024[32]. - The Mountain region saw a significant increase in units sold, rising to 663 in Q1 2025 from 485 in Q1 2024, representing a growth of 36.7%[32]. Share Repurchase - The company repurchased approximately 0.2 million shares at an average price of $127.02 per share, totaling $23.7 million[6].