Toll Brothers Inc. reported a third-quarter revenue decline of 8% year-over-year as higher mortgage rates continued to weigh on the luxury homebuilder’s market. The company posted adjusted earnings per share of $2.97, exceeding the $2.92 estimate from analysts, while home sales revenue totaled $2.66 billion, topping the $2.62 billion consensus.
Net income for the quarter fell to $280.1 million, or $2.97 per diluted share, from $369.6 million, or $3.73 per share, in the same period last year. Revenue declined to $2.66 billion from $2.88 billion, reflecting an 8% drop despite delivering 2,662 homes at an average price of $996,400, compared with 2,959 homes in the prior-year quarter.
The company repurchased approximately 1.4 million shares for $206.8 million during the quarter and increased its projected share buyback program for fiscal 2026 to $700 million, up from $650 million. Toll Brothers also maintained its quarterly dividend at $0.26 per share.
Adjusted home sales gross margin narrowed to 25.6%, down from 27.5% a year earlier but 35 basis points above guidance. Net signed contract value rose 5% year-over-year to $2.52 billion, covering 2,508 homes, while backlog value decreased to $6.24 billion from $6.38 billion.
For the fourth quarter, Toll Brothers expects to deliver 3,450 to 3,550 units at an average price between $995,000 and $1,005,000. Full-year guidance remains unchanged at approximately $10.5 billion in home sales revenue and an adjusted gross margin of 26.1%.
Shares of Toll Brothers slipped 0.4% to $142.62 in after-hours trading following the results, after closing 1.78% lower at $142.86 on Tuesday.
