Toll Brothers Reports 10% Revenue Decline in Q3 Fiscal 2026

Toll Brothers, Inc. reported a decline in financial performance for the third quarter of fiscal 2026, with total revenues of $2.66 billion, down 10% from $2.95 billion in the same period last year. Home sales revenue decreased by 8% to $2.65 billion, primarily due to a 10% drop in the number of homes delivered, which was partially offset by a 2% increase in the average price of homes sold. The company's net income for the quarter was $280.1 million, a 24% decrease from $369.6 million in the prior year, reflecting a challenging housing market characterized by elevated mortgage rates and reduced consumer confidence.

In comparison to the previous fiscal period, Toll Brothers experienced a 5% decrease in total revenues for the nine months ended July 31, 2026, totaling $7.34 billion, down from $7.54 billion. The decline in home sales revenue for the nine-month period was similarly attributed to a 10% decrease in home deliveries, although the average price of homes delivered increased by 5%. The company’s income before income taxes also fell by 17% to $998.7 million, down from $1.20 billion in the same period last year.

Strategically, Toll Brothers made significant moves, including the acquisition of Buffington Homes of Arkansas in May 2026, which added approximately 1,500 home sites to its inventory. The company also completed the sale of approximately half of its Apartment Living portfolio, generating net cash proceeds of around $330 million. This transaction was part of a broader strategy to exit the multifamily development business, allowing the company to focus on its core homebuilding operations.

Operationally, Toll Brothers reported a backlog of 5,312 homes valued at $6.24 billion as of July 31, 2026, a decrease of 3% in units and 2% in value compared to the previous year. The company’s selling communities increased to 471, up from 420 a year earlier, indicating a strategic expansion in its market presence. However, the average contracted price for homes in backlog rose by 1% to $1.17 million, reflecting a positive mix in sales.

Looking ahead, Toll Brothers anticipates continued challenges in the housing market, with expectations of softer demand persisting in the near term. The company plans to manage pricing and incentives strategically to align inventory levels with local sales environments. Despite the current market conditions, Toll Brothers remains optimistic about the long-term outlook for the new home market, supported by favorable demographics and a structural undersupply of homes.