Toll Brothers 3Q Sales Down Slightly,

Signaling A Cooling In Housing Market

Luxury home builder Toll Brothers Inc, which has built dozens of high-end homes in Newtown in recent years, said this week its fiscal third-quarter sales dipped slightly, signaling further cooling in the housing market.

The company also lowered fiscal fourth-quarter delivery expectations. Toll Brothers shares were down 80 cents, three percent, to $25.78 in early trading on the New York Stock Exchange, according to a report in the Associated Press August 9.

Toll Brothers’ revenue slipped 0.6 percent to $1.53 billion in the period ending July 31 compared to $1.54 billion last year. Sales headed lower in the Mid-Atlantic, Midwest, and California markets, while revenue was up in the Northeast, Southeast, and Southwest.

The number of signed contracts slipped to 1,473 units versus 2,857 units during the same period last year. Total contract amounts tumbled 45 percent to $1.05 billion from $1.92 billion. The amount of contracts received declined across all geographic regions.

Toll Brothers’ backlog of homes yet to be built also headed lower, to 8,044 units from 9,727 units for the year-ago period. Backlog totals sagged to $5.59 billion from $6.43 billion, with the slowdown seen in all geographic regions.

The company expects to deliver between 2,500 and 2,800 homes in the fourth quarter compared to previous guidance of 2,900 to 3,300. For the full fiscal year, Toll Brothers said it will deliver between 8,600 and 8,900 homes.

“Many anxious consumers are delaying their purchase decisions as they wonder about the direction of home prices,” said Chairman and Chief Executive Robert I. Toll.

But he added that with interest rates “still relatively low” and the economy “basically healthy ... we believe that once the current oversupply of homes is absorbed and buyers become confident that home prices have stabilized, the market will return to firm footing.”