Toll Brothers, Inc. delivered strong first-quarter fiscal 2026 results, surpassing guidance on key metrics. The company reported net income of $210.9 million and diluted earnings per share of $2.19, reflecting a 25% increase from $1.75 in the year-ago quarter.5556
Financial Highlights
Total revenues reached $2.15 billion, up 15.4% year over year. Home sales revenues stood at $1.85 billion from 1,899 home deliveries at an average price of $977,000. Adjusted home sales gross margin hit 26.5%, exceeding expectations by 25 basis points, while SG&A expenses as a percentage of home sales revenues came in at 13.9%, 30 basis points better than guided.5554
Other income from joint ventures, land sales, and operations totaled $72 million, boosted by a partial sale of the Apartment Living portfolio yielding $330 million in net cash proceeds. The company plans to exit multifamily development over the next several years.56
Operational Metrics
Toll Brothers signed 2,303 net contracts valued at $2.38 billion, flat in units but up 3% in value with an average sales price of $1,033,000. Backlog value declined to $6.02 billion for 5,051 homes. Community count ended the quarter at 445, with lots owned or controlled near 75,000 supporting ongoing expansion. Contract cancellation rate remained low at 2.8%, and design studio upgrades averaged $212,000 per home, or 25% of base price.5556
Buyers showed resilience, with 24% paying cash and stable demand across luxury move-up (59% of revenues), first-time (25%), and move-down segments. Incentives held steady at 8% of sales price.56
Balance Sheet Strength
Cash and equivalents totaled $1.2 billion, contributing to $3.4 billion in liquidity. Net debt-to-capital ratio improved to 14.2% from 21.1% a year earlier. Toll Brothers repurchased 0.3 million shares for $50.5 million and extended its revolving credit facility to 2031 with increased commitments.55
Outlook and Guidance
Executives reaffirmed full-year fiscal 2026 guidance, targeting 10,300 to 10,700 deliveries at $970,000 to $990,000 average price, adjusted gross margin of 26.0%, and SG&A at 10.25% of home sales revenues. Community count aims for 480 to 490, reflecting 8% to 10% growth. Second-quarter guidance includes 2,400 to 2,500 deliveries, gross margin of 25.5%, and community count of 455.56
Leadership Transition
Douglas C. Yearley, Jr. transitions to Executive Chairman on March 30, 2026, with Karl Mistry assuming the CEO role. Yearley stated, “Karl is an outstanding leader who has been with Toll Brothers for over 20 years… I’m very confident he is the right person to lead us through the next phase of growth.”56
Yearley added, “We are pleased with our first quarter results, as we met or exceeded guidance across nearly all metrics,” highlighting the company’s luxury focus, geographic diversity, and land position for sustained growth.55
