This aerial photo, captured in Elgin, Illinois, USA on Wednesday September 26, 2018, shows homes in the Bowes Creek Country Club community owned by Toll Brothers Inc. Photographer: Daniel Acker / Bloomberg
Daniel Acker / Bloomberg
U.S. contractor Toll Brothers Inc. saw better-than-expected order growth as the pandemic led wealthy buyers to move to larger space.
The purchase contracts for the three months to April rose by 85% year-on-year to 3,487, the contractor said in a statement after the close of trading on Tuesday. The average estimate of analysts polled by Bloomberg was 2,960. The number of orders was a quarterly record for Toll, the country's largest luxury manufacturer. The company has exceeded its projections on nearly every metric, CEO Douglas Yearley said in the statement.
Toll is well positioned to capitalize on the high-end real estate boom. The rich emerge from the pandemic with bulging savings accounts and stock portfolios and with jobs intact. Great welcomes you to the sales offices.
The wild demand from buyers due to low mortgage rates allows Toll and its competitors to raise prices quickly even as construction costs rise. The builders have caught up with the existing home market, where prices have risen much faster until recently.
It was a simple comparison from a year earlier when the Covid-19 lockdowns froze home purchases across the country. On the previous Tuesday, KB Home reported preliminary results showing that orders for the three months ended May were up 155% over the same period last year.
Toll Brothers shares rose slightly in late trading. They are up 43% that year as of Tuesday's close, compared with a 29% increase on an S&P index of home stocks. Toll expects deliveries of 2,675 homes this quarter and average prices of $ 820,000 to $ 840,000. The adjusted gross margin is 24.8%.