Luxury homebuilder Toll Brothers reported better-than-expected fiscal second-quarter earnings late Tuesday and forecast full fiscal-year profit growing 13% as it increased delivery expectations. Meanwhile, Williams-Sonoma, another upscale housing-related play, announced a big earnings beat early Wednesday.
Toll Brothers' fiscal Q2 earnings grew 60% to $4.55 per share with revenue totaling $2.84 billion, up 13% vs. a year ago. The homebuilder delivered 2,641 homes at an average price of $1 million, generating home sales of $2.65 billion, a 6% increase.
Analysts expected earnings of $4.14 per share and revenue of $2.58 billion, according to FactSet. The consensus among analysts also had Toll Brothers' Q2 home deliveries hitting 2,482. The luxury builder had expected to deliver 2,400 to 2,500 homes with an average price per home of $1 million-$1.01 million in Q2.
Toll Brothers also revised higher its full fiscal year delivery guidance on Tuesday. The company predicts deliveries of 10,400 to 10,800 homes with an average price of $960,000 to $970,000. Toll Brothers is projecting EPS of $14. For Q3, the homebuilder forecasts 2,750 to 2,850 home deliveries with an average price of $950,000 to $960,000.
At the end of the fiscal first quarter, Toll Brothers had expected full fiscal year deliveries of 10,000 to 10,500 homes with an average price of $940,000 to $960,000.
"Demand for new homes continues to be driven by a resilient economy, favorable demographics and a lack of supply that reflects both the chronic underproduction of housing in the U.S. and the historically low levels of resale inventory caused by the lock-in effect of higher rates," Chief Executive Douglas Yearley Jr. said Tuesday.
"Our strategy of widening our price points to include more affordable luxury homes and increasing our supply of spec homes has helped us grow market share," he added.
Toll Brothers Stock Performance
Toll Brothers stock sank 8.5% to 119.17 during market action on Wednesday. TOL shares dropped 0.6% to 130.22 during Tuesday's trade. Ahead of Wednesday trade, the stock had advanced 8.7% in May, adding to a 26% run in 2024.
Toll Brothers stock is trading below an official 128.75 buy point from a cup-with-handle base, according to MarketSurge analysis.
Toll stock has a strong 95 Composite Rating out of a best-possible 99. The stock has a 95 Relative Strength Rating and an 89 EPS Rating.
Williams-Sonoma Earnings
Meanwhile, home furnishings retailer Williams-Sonoma reported first-quarter earnings growing 54% to $4.07 per share with revenue declining 5% to $1.66 billion early Wednesday. Analysts forecast Q1 EPS of $2.74 with sales totaling $1.65 billion.
Williams-Sonoma also reiterated its 2024 revenue guidance on Wednesday. The company expects sales in the range of a 3% decrease to a 3% increase this year.
The stock bolted higher early before falling 11% Wednesday, dropping below a 319.78 buy point from a flat base. Williams-Sonoma stock had surged 56% in 2024.
The stock is the No. 1 holding in the SPDR S&P Homebuilders ETF. Toll Brothers is also a significant member.
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