Dec 10, 01:44 PM

Toll Brothers Reports Q3 Earnings of $4.63 on $3.33B Sales, Faces 24% Speculative Inventory Increase and 6.7% Incentives

Toll Brothers Inc. ($TOL) reported a strong third-quarter earnings performance, with earnings per share of $4.63, surpassing the estimated $4.33, and sales of $3.33 billion, exceeding expectations of $3.17 billion. However, the company is facing challenges with speculative inventory, which has reached a record high, increasing by 24% year-over-year. The CEO noted that incentives have risen to 6.7% of sales price due to efforts to clear this inventory. The company’s completed unsold housing inventory also hit a cycle high, reflecting ongoing pressures in the housing market. Analysts anticipate potential downgrades for the housing sector in light of oversupply issues, as both Toll Brothers and D.R. Horton ($DHI) report record levels of unsold speculative inventory. Despite these challenges, the CEO expressed optimism about strong demand as the company approaches the spring selling season in mid-January 2025. Market reactions have seen $TOL's stock fluctuate, indicating investor concerns about the outlook for 2025 amidst these inventory challenges.

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