Toll Brothers says that home buyers ‘sidelined’ by higher mortgage rates, market volatility


Shares of Toll Brothers Inc. TOL, +0.22% dropped more than 2% in the extended session Tuesday after the home builder lowered its deliveries guidance for the year, blaming labor shortages and supply-chain snags and saying that higher mortgage rates and home prices have sidelined some buyers. Toll Brothers said it earned $273 million, or $2.35 a share, in the fiscal third quarter, compared with $235 million, or $1.87 a share, in the year-ago quarter. Revenue rose to $2.49 billion, from $2.25 billion a year ago. Analysts polled by FactSet expected earnings of $2.30 a share on sales of $2.5 billion. Its new-home deliveries for the quarter were below guidance thanks to “unforeseen delays with municipal inspectors, continued labor shortages and supply-chain disruptions, as well as a softer demand environment,” the company said. “Due to these challenges, we have lowered our full-year deliveries guidance.” Toll Brothers expects to deliver between 10,000 and 10,300 homes this year, at an average price of about $920,000, it said. In May, it had forecast the delivery of between 11,000 and 11,500 homes. Based on the strong pricing, however, it reaffirmed its full-year adjusted gross margin guidance of 27.5% for the year, it said. The company said that as the quarter progressed it saw “a significant decline in demand as the combined impact of sharply rising mortgage rates, higher home prices, stock market volatility and macroeconomic uncertainty caused many prospective buyers to step to the sidelines.” There are signs of increased demand in the past few weeks, however, Toll Brothers said, “as sentiment is improving and buyers are returning to the market.” Shares of Toll Brothers ended the regular trading day up 0.2%.

This article was originally published by Read the original article here.

Previous articleMarket Extra: Get used to aggressive rate hikes and stop counting on a ‘dovish’ Fed pivot, market pros warn
Next articleNordstrom stock falls 11% after retailer cuts full-year outlook


Please enter your comment!
Please enter your name here