Toll Brothers’ focus on the luxury home buying segment helped insulate the company from some affordability and consumer confidence related headwinds in its fiscal second quarter. With an average home price above $1 million and nearly a quarter of its buyers paying all cash, Toll Brothers was able to meet or exceed its guidance metrics and raised its full-year expectations based on the strength of the first half of the year.
“We are, quite simply, a more efficient and less cyclical home builder. Even in a difficult market, our business continues to perform well,” Douglas Yearley, executive chairman of the board, said during the builder’s earnings call. “In this environment, we are pleased to be serving a more affluent customer base, a segment of the housing market that has proven more resilient despite the challenges facing the broader market. Overall, our buyers are less sensitive to affordability pressures. They have benefited from years of income growth, stock market gains, and home equity appreciation.”
In the fiscal second quarter, ended April 30, home sales revenues declined to $2.51 billion from $2.71 billion in the prior-year period. Deliveries declined to 2,491 in the second quarter from 2,899 in 2025’s second quarter. Net signed contract value increased to $2.81 billion from $2.6 billion as contracted homes increased to 2,834 from 2,650 on a year-over-year basis.
“The demand environment remained challenging in the second quarter and through the first three weeks of our third quarter. Against this backdrop, we are pleased that we were able to increase sales by 7% year over year, keep our per community sales pace flat, and maintain our margins in the quarter,” CEO Karl Mistry said during the earnings call.
Geographically, Mistry said results were driven by strong quarters for all of Toll Brothers’ Florida markets, Boise, Las Vegas, and Austin. Weaker markets in the quarter included Atlanta, San Antonio, Seattle, Portland, and San Francisco. Additionally, in the second quarter, Toll Brothers expanded into the Fayetteville, Arkansas, market through the acquisition of Buffington Homes of Arkansas.
“We were very excited to enter northwest Arkansas with the acquisition of Buffington Homes. The home of Walmart and a host of other terrific companies, the Fayetteville-Bentonville market is vibrant and thriving,” Mistry said. “We look forward to leveraging [Buffington Homes’] local expertise and strong land position to scale their business well into the future.”
Among Toll Brothers’ product segments, the luxury move-up business accounted for 62% of sales in the second quarter, up from 59% in the first quarter. The luxury, first-time business accounted for 22% of sales and the move-down segment accounted for 16% of sales. Spec homes represented 51% of deliveries in the quarter and 41% of home sales revenues. The average incentive for new contracts in the second quarter remained flat at 8% of gross sales price.
The company generated profit of $260.6 million, or $2.72 per share, in the second quarter, down from $352.4 million, or $3.50 per share, in the second quarter of 2025.
Toll Brothers ended the quarter with 76,800 lots owned and optioned, of which 42% were owned. The company spent approximately $422 million on land purchases in the quarter and ended the period with 459 selling communities.
“Based on our first half performance, we are raising our full year guidance from all key home building measures,” Yearley said. “Our results in the second quarter reflect our unique position as America’s luxury home builder as well as the success of our strategies of expanding our geography, product line, and price point.”
