Toll Brothers Says Co-Founder To Resign, Tightens Sales View
February 23 2016 - 8:40AM
Dow Jones News
Luxury home builder Toll Brothers Inc. on Tuesday said its
eponymous vice chairman Bruce Toll would retire next month from the
company he co-founded with his brother.
News of the retirement came as the home builder also reported
better-than-expected revenue for the January quarter but narrowed
its sales forecast for the year.
Robert and Bruce Toll started Toll Brothers in 1967 in
Pennsylvania. The company has focused on building more-customized
and higher-end homes than competitors, and the brothers took the
company public on July 8, 1986. Bruce Toll was the company's chief
operating officer until May 1998 and its president until November
1998.
"I am so proud of what Toll Brothers has accomplished," Bruce
Toll said.
The homes in their first community in Chester County sold for an
average of $20,000. In its latest quarterly earnings, the company
said the average price of a home delivered in its first quarter was
$873,500, up from $782,300 a year ago.
Toll said a tighter labor market and increased home complexity
has led to a lengthening in the time it takes to build a home. The
company narrowed its annual revenue guidance, saying it now expects
revenue between $4.6 billion and $5.4 billion. Previously, Toll had
projected revenue between $4.5 billion and $5.6 billion.
Analysts polled by Thomson Reuters had predicted $5.11 billion,
on average, in revenue for the year.
Shares of Toll Brothers, which have fallen 30% to $26.03 over
the past three months, were inactive in premarket trading.
For the quarter ended Jan. 31, Toll's profit fell to $73.18
million, or 40 cents a share, from $81.33 million, or 44 cents a
share, a year earlier. Analysts surveyed by Thomson Reuters were
expecting earnings of 40 cents a share.
Revenue rose 8.8% to $928.6 million, above the average analyst
estimate of $916.3 million.
Results in the first quarter were driven by growth in the
company's north and mid-Atlantic regions, both areas which the
company said have been slower to recover from the financial crisis.
In the north region, contracts increased 56% in dollars and 38% in
units compared with a year prior, boosted by New Jersey growth. The
mid-Atlantic region saw contract growth of 34%.
California was a weak spot for the quarter, with a decrease of
28% in units and flat change in dollars.
Toll's City Living division, which builds urban apartments,
increased 145% in dollars and 179% in units. While small, the
division represents a new segment for the company as the U.S.
continues to urbanize. In Southern California, one of its
developments was hobbled by a long-lasting gas leak that was
resolved Thursday.
Backlog jumped 17% during the period to 4,129 units, with
California and the West driving the growth.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
February 23, 2016 08:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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