Strong sales in the past quarter were announced by residential developer Toll Brothers Inc. (TOL). The high housing demand was caused by the interest of Americans during the coronavirus pandemic in comfortable housing.
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Toll Brothers’ home sales revenue rose 9 percent year-on-year to $2.5 billion in the fourth quarter of fiscal 2020. Total sales amounted to $2.55 billion. Sales of U.S. homes rose 10% to 2,940 units. A small decrease in net income of $199 million, or $1.55 per share, was announced by Toll Brothers.
The company is currently witnessing the fastest growing housing market in 30 years, according to Toll Brothers’ management. This enables the business to continue to increase prices in virtually all areas, enabling it to concentrate on driving profitability.
With sales prices ranging from $790,000 to $810,000, Toll Brothers expects to sell between 9,600 and 10,200 homes next year (it delivered 8,496 homes in fiscal year 2020). Comparatively, the average selling price of homes in the United States is less than $300,000. That is, in the premium market, where Toll Brothers operates while the company has not issued forecasts for sales or net profit for quarters ahead.
Toll Brothers specializes in luxury home design. During the COVID-19 pandemic, this has been an advantage. Many customers have realized that COVID-19 would change the global economy in the long run, and even after the pandemic, remote work will become a staple for many employees. This raises the demand for large and spacious homes that can accommodate all members of the family. Demand is backed by record low rates of interest. Toll Brothers was the eighth largest home builder in the United States in 2020, by the number of projects completed.
Toll Brothers Inc. (TOL) stock was stable with a rise of +0.22 percent to close the Tuesday trading at $46.12.