NEW YORK, May 19, 2026, 18:04 (EDT)
- Toll Brothers shares moved higher in after-hours trading as the homebuilder posted quarterly profit and revenue ahead of Wall Street forecasts.
- The luxury builder lifted its full-year forecasts for deliveries and prices. Profit still dropped from a year ago.
- High mortgage rates, less backlog, and weaker industry sentiment are still weighing on the market.
Toll Brothers shares picked up in after-hours trading Tuesday. The move came as the luxury homebuilder topped profit estimates for the quarter and lifted some full-year targets. Earlier, the stock had ended down along with other homebuilders.
Shares traded at $127.50 in late trading, up 2.7%. The stock closed down 2.2% at $124.14 in the regular session. The company posted results after the New York market closed.
Toll’s earnings are in focus as investors watch for signs of cooling luxury housing demand, with mortgage rates still high and buyers stepping away in other parts of the market. The company’s customers are richer than most U.S. homebuyers, but the shares often move with the rest of the housing sector when rates climb or affordability comes under pressure.
Toll Brothers posted net income of $260.6 million for its fiscal second quarter, or $2.72 a diluted share. That’s down from $352.4 million, or $3.50 per share, a year ago. Revenue from home sales also slipped, coming in at $2.51 billion versus $2.71 billion last year. The company delivered 2,491 homes this quarter, fewer than the 2,899 it logged a year back. In contrast, the value of net signed contracts increased to $2.81 billion from $2.60 billion. Contracted homes rose as well, hitting 2,834 against 2,650 last year.
Toll posted numbers that beat what analysts had been looking for. EPS was higher than the $2.57 estimate, and revenue came in at $2.53 billion versus $2.42 billion expected, according to Investing.com.
Toll CEO Karl Mistry said the company “successfully navigated a challenging market,” and orders increased 7% in units and 8% in dollars from last year. Toll now expects 10,400 to 10,700 full-year deliveries, with average delivered home price between $985,000 and $1 million. It put adjusted home sales gross margin at 26.1%. That figure excludes interest costs and inventory write-downs.
Toll stood out after the bell as the stock moved higher in after-hours trading. Homebuilders dropped during the session. The iShares U.S. Home Construction ETF finished down 1.4%. D.R. Horton slid 2.0%, Lennar gave up 0.9%, and PulteGroup lost 0.7%.
Mortgage rates are still high and the big picture isn’t getting easier. Freddie Mac put the average 30-year fixed rate at 6.36% as of May 14. That’s a bit lower than the previous week, but the rate remains elevated and continues to pressure affordability.
Pending home sales in the U.S. edged up 1.4% in April, Reuters said. Economists didn’t budge on their view. Pantheon Macroeconomics’ Oliver Allen said “little prospect of a marked further recovery” is on the table. Nancy Vanden Houten at Oxford Economics said higher rates and shaky confidence will probably “keep a lid” on sales until later this year. Reuters
Builder sentiment ticked up, with the NAHB/Wells Fargo Housing Market Index moving three points higher to 37 in May. A reading under 50 signals that most builders still rate conditions as poor. NAHB said 32% of builders cut prices this month and 61% offered sales incentives.
Toll’s focus on luxury might not protect it if rates climb again or buyers pull back. Revenue and deliveries slipped from last year, the home sales gross margin tightened to 23.9% from 26.0%, and backlog dropped to $6.32 billion from $6.84 billion. Those are meaningful headwinds.
Toll Brothers’ next earnings call is set for Wednesday morning, with CEO Mistry and Executive Chairman Douglas Yearley leading. Investors want answers on how much of the recent order growth relied on incentives, if demand is steady in May, and if Toll can keep margins at guidance now that the spring selling season is in its later stages.
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