'Builders Are Back:' Toll Brothers Lifts Retail Mood With Big Q2 Beat As CEO Touts Luxury Housing Strength

Toll Brothers (TOLL) stock rose 5.1% in extended trading on Tuesday after the company topped Wall Street’s estimates for quarterly earnings.

The luxury homebuilder reported adjusted earnings of $3.50 per share for the fiscal second quarter, while analysts expected it to post $2.86 per share, according to FinChat data.

Its peers, D.R. Horton and Lennar, also rose 1.8% and 2.1%, respectively.

The company’s net income stood at $352.4 million for the quarter ended April 30, compared with earnings of $481.6 million in the year-ago quarter, which included gains from a land parcel sale.

Despite softer demand, its second-quarter revenue of $2.74 billion exceeded Wall Street’s expectations of $2.49 billion.

U.S. new home sales, which account for roughly 15% of the market, had topped expectations in February and March due to falling mortgage rates. However, consumer sentiment dipped in April due to President Donald Trump’s tariff policy uncertainty.

According to data from online brokerage Redfin, pending home sales fell 3.5% in April.

The Fort Washington, Pennsylvania-based company said its delivered home numbers rose 10% to 2,899 during the reported quarter, compared to a year earlier.

“Given the shortage of housing and favorable demographics, we continue to believe the long-term outlook for the new home market remains positive, particularly for our luxury niche,” CEO Douglas Yearley said.

Toll Brothers reaffirmed its fiscal 2025 forecast of delivering 11,200 to 11,600 units at an average sales price of $945,000 to $965,000.

Retail sentiment on Stocktwits was in the ‘extremely bullish’ (93/100) territory, while retail chatter was ‘extremely high.’

“Builders are back,” one retail trader said.

“Adjusted gross margins, the most important metric for the homebuilders, were 27.5%, beating the company's own guidance but below a year-ago level of 28.2%,” Zacks Investment Research equity strategist Tracey Ryniec said.

Toll Brothers stock has fallen nearly 18% year to date (YTD).

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