Here's What Investors Must Know Ahead of Toll Brothers' Q4 Earnings

Toll Brothers, Inc. TOL is scheduled to report its fourth-quarter fiscal 2025 results on Dec. 8, after market close.

In the last reported quarter, the company’s adjusted earnings and total revenues topped the Zacks Consensus Estimate by 3.9% and 3.3%, respectively. Year over year, both metrics grew 3.6% and 8%, respectively

Toll Brothers’ earnings surpassed estimates in three of the trailing four quarters and missed on the remaining occasion, with an average of 5.5%.

TOL’s Earnings & Revenue Expectations

The Zacks Consensus Estimate for fiscal fourth-quarter earnings per share (EPS) has moved downward to $4.87 in the past seven days. However, the estimate indicates 5.2% year-over-year growth.

The consensus estimate for total revenues is pegged at $3.32 billion, indicating a 0.3% year-over-year decline from $3.33 billion.

Toll Brothers Inc. Price and EPS Surprise

Toll Brothers Inc. price-eps-surprise | Toll Brothers Inc. Quote

Factors Likely to Have Shaped Toll Brothers’ Q4 Performance

Revenues

During the fiscal fourth quarter, Toll Brothers’ top-line performance is expected to have inched down year over year due to the ongoing uncertainties surrounding the housing market in the United States. Consumer confidence continues to be on the weaker side as affordability challenges persist amid a still high mortgage rate scenario and inflationary pressures. Demand softness across the South, Mountain and Pacific geographic segments is likely to have restricted the growth.

For the fiscal fourth quarter, TOL expects home deliveries to be around 3,350 units, indicating a year-over-year decline of 2.4%.

Nonetheless, the strength of its luxury positioning and its higher-income customer base is expected to have offset the market headwinds to some extent during the quarter to be reported. The company’s approach of offering affordable luxury homes and increased supply of spec homes, alongside favorable pricing measures, is likely to have been encouraging.

For the quarter, TOL expects the average selling price (ASP) of delivered homes to be within $970,000-$980,000, up from $950,200 in the year-ago quarter. Our model expects the metric to be up year over year by 2.5% to $973,600 in the fiscal fourth quarter.

Earnings & Margins

The bottom line of Toll Brothers is expected to have gained in the fiscal fourth quarter on the back of its disciplined pricing and sales velocity management. Moreover, its efforts in controlling costs amid an uncertain macro scenario are likely to have aided the uptrend.

However, a shift in the mix of revenues to lower margin products in certain geographic regions, most notably in the Pacific region, is expected to have weighed on the home sales gross margin during the fiscal fourth quarter. For the quarter to be reported, TOL expects adjusted home sales gross margin to be 27%, reflecting a 90-basis point (bps) contraction year over year.

The company also expects selling, general and administrative expenses (SG&A), as a percentage of home sales revenues, to be 8.3%, at par year over year. The metric’s performance is likely to have been impacted by higher payroll, insurance and marketing costs, partially offset by lower selling commissions.

Backlog

For the fiscal fourth quarter, our model expects a total backlog of 4,935 units, down year over year by 17.7%, with potential revenues declining 9% to $5.89 billion.

What Our Model Says for TOL

Our proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

TOL’s Earnings ESP: The company has an Earnings ESP of -2.84%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

TOL’s Zacks Rank: It currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

D.R. Horton, Inc. DHI reported mixed fourth-quarter fiscal 2025 (ended Sept. 30, 2025) results, with earnings missing Zacks Consensus Estimate, while the total revenues beat the same. On a year-over-year basis, both metrics declined.

The continued housing market softness due to declining consumer confidence and affordability concerns marred D.R. Horton’s quarterly performance, resulting in lower home closings. Besides, such a weak market scenario also impacted the backlog level of the company. Nonetheless, its disciplined approach to capital allocation, combined with its flexible lot supply and affordable product offerings, positions D.R. Horton to maximize returns across its communities while adapting to evolving market conditions.

NVR, Inc. NVR reported third-quarter 2025 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. Meanwhile, both earnings and Homebuilding revenues declined on a year-over-year basis.

The third-quarter results of NVR highlight continued softness in the housing market, with affordability challenges persisting amid macroeconomic uncertainty and inflationary pressures. NVR’s Homebuilding segment saw a year-over-year decline in settlements, while average selling prices remained consistent with the prior-year quarter. Backlog units and new orders also fell, indicating continued caution among homebuyers, reflecting ongoing weakness in overall housing demand.

PulteGroup Inc. PHM has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.

The performance of PulteGroup was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues. Nonetheless, with a diversified business platform, PulteGroup aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.

This article originally published on Zacks Investment Research (zacks.com).

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