Toll Brothers Reports Decline in Q2 Fiscal 2026 Revenue and Net Income

Toll Brothers, Inc. reported a decline in financial performance for the second quarter of fiscal 2026, with revenues totaling $2.53 billion, down from $2.74 billion in the same period last year. Home sales revenues accounted for $2.51 billion, a decrease of 7% year-over-year, while land sales and other revenues fell by 42% to $18.8 million. The company’s net income also decreased to $260.6 million, compared to $352.4 million in the prior year. For the six-month period ending April 30, 2026, total revenues were $4.68 billion, slightly up from $4.60 billion, with net income at $471.5 million, down from $530.2 million.

The company experienced a 14% decrease in the number of homes delivered during the quarter, which was attributed to a reduction in backlog and fewer spec home deliveries. However, the average price of homes delivered increased by 8%, reflecting a shift in the mix of deliveries towards higher-priced homes. The total value of net contracts signed rose to $2.81 billion, representing a 7.8% increase compared to the previous year, driven by a 9% increase in community count. Despite these positive indicators, the overall housing market remains challenged by affordability pressures and weak consumer confidence.

In terms of strategic developments, Toll Brothers completed the sale of approximately half of its Apartment Living portfolio, generating net cash proceeds of around $330 million. Additionally, the company acquired Buffington Homes of Arkansas, expanding its footprint in the region with approximately 1,500 home sites. As of April 30, 2026, Toll Brothers owned or controlled approximately 76,800 home sites, an increase from 76,100 at the end of the previous fiscal year.

Operationally, the company reported a backlog valued at $6.32 billion, down 8% from the previous year, with 5,394 homes under contract. The average contracted price per home in backlog increased by 4% to $1.17 million. Toll Brothers continues to manage its pricing strategy and sales incentives to align with local market conditions, indicating a cautious approach in response to the current economic environment. The company maintains a strong liquidity position, with $1.11 billion in cash and cash equivalents and approximately $2.24 billion available under its revolving credit facility.

Looking ahead, Toll Brothers anticipates that demand for new homes may remain soft in the near term, which could lead to continued elevated incentive levels and slower sales paces. However, the company remains optimistic about the long-term outlook for the housing market, supported by favorable demographics and a structural undersupply of homes. The management's focus on balancing sales price and margin with pace will be crucial as they navigate the evolving market conditions.