The luxury home builder sold more homes but at lower prices, and it cut the top end of its forecasts for margins and home sales. Fred Katayama reports.
Toll Brothers sold a lot more homes in the latest quarter. But it did so at lower prices. The luxury home builder's revenue rose, but it missed Wall Street's targets. The company has been targeting millennials by selling them homes at lower prices with fewer structural options. Profit rose sharply thanks partly to a lower tax rate. The company cut the top end of its fiscal year forecasts for profit margins and home sales, saying a recall by a major lumber manufacturer will result in a delay delivery of 150 homes. It also narrowed its revenue forecast range for the full year. Despite that downward revision, Credit Suisse senior analyst Susan Maklari raised her per share earnings estimate, saying, "Toll has leveraged its strong capital structure and unique positioning within the luxury market to drive operational and financial improvement. It has also become more diversified." Toll Brothers shares dropped in early trading Tuesday, chipping in to their 20 percent gain this year.