Toll Brothers delivered a robust fourth quarter of fiscal 2024, underscoring the durability of its luxury/homebuyer demand and the effectiveness of its blended build-to-order and speculative (spec) strategy. In Q4, the company reported 3,431 homes delivered and home sales revenues of approximately $3.26–$3.30 billion, resulting in an adjusted gross margin of 27.9% and an operating margin of 18.3%. Net income reached $475.4 million with diluted EPS of $4.63, marking a fourth quarter and full-year record performance. For the full year, Toll Brothers deployed a disciplined capital allocation plan that included significant stock repurchases (approximately $628 million in 2024) and a quarterly dividend, and ended the year with strong liquidity (roughly $3.1 billion of liquidity, plus $1.3 billion in cash and $1.8 billion available under revolvers). The company reaffirmed and quantified its 2025 outlook, guiding to 11,200–11,600 new home deliveries with an average price of $945k–$965k and an expected full-year gross margin of about 27.25% (Q1 guided to 26.25% due to mix and incentives). Toll reiterated its commitment to ROE discipline, land efficiency, and geographic/product diversification as drivers of attractive returns.
The management team emphasized sustained demand supported by favorable demographic dynamics, a large cohort of affluent buyers with meaningful equity and cash purchase capability, and a long runway of new supply entering the market. They also highlighted a number of strategic levers: expanding land programs with a targeted mix of owned vs. options (approximately 60% option land), increasing community counts to 440–450 by year-end 2025, and maintaining a disciplined incentive strategy to balance pace and price as markets evolve. The outlook remains sensitive to macro conditions—particularly mortgage rates, election-related uncertainty, and broader housing-market policies—yet Toll asserts it is “built to succeed in this type of market” given its geographic breadth (24 states, 60 markets), wide price-point spread, and strong new-home value proposition versus resales.
Key takeaways for investors: Toll’s 2024 results reinforce its ROE leadership and capital efficiency in a high-price-point market, while 2025 guidance demonstrates continued growth along with a measured margin trajectory and a balanced approach to buybacks and land acquisition. The near-term margin headwind in Q1 is acknowledged as an anomaly tied to mix and incentive timing, with the company seeking margin expansion back toward its 27.5% long-run target for the balance of the year. The stock-repurchase cadence and robust cash generation support a constructive capital allocation narrative, though investors should monitor rate trajectories, demand momentum in Florida and Phoenix, and the pace of land development and new community openings as the year unfolds.