Luxury home builder Toll Brothers (TOL 0.60%) blew past estimates in its final quarter of fiscal 2020. This was thanks in large part to robust demand from Americans looking for comfortable accommodations during the coronavirus pandemic.
For the quarter, the results of which were unveiled after market hours on Monday, the company's home sales revenue was up a sprightly 9% year over year, at $2.5 billion, with home building deliveries growing 10% to a total of 2,940. All told, revenue landed at nearly $2.55 billion, trouncing the average analyst estimate of $2.1 billion.
On the bottom line, Toll Brothers booked a net profit that was down only marginally to $199 million, or $1.55 per share. Collectively, prognosticators tracking the stock were only expecting $1.23.
The company did not mince words about the state of its business. "We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers and we continue to increase prices in nearly all of our communities as we focus on driving profitability and managing growth," it quoted CEO Douglas Yearley as saying.
He added that this derives from interest rates that remain at historic lows, lack of supply for housing stock, "and a renewed appreciation for the home as a sanctuary" during the pandemic.
Toll Brothers also proffered guidance for its new fiscal year. It believes it will deliver between 9,600 and 10,200 homes with selling prices ranging from $790,000 to $810,000 (it delivered 8,496 in fiscal 2020). The company did not provide revenue or net profit forecasts.
Despite the revenue and earnings beats and the encouraging guidance, investors traded Toll Brothers stock down on Tuesday -- its price fell by nearly 8% on the day.