Toll Brothers’ strategy shift toward more speculative builds due to a tight resale market has paid off for the Fort Washington homebuilder, writes Paul Schwedelson for the Philadelphia Business Journal.
During the second fiscal quarter that ended April 30, more than half of contracted Toll Brothers homes were speculative builds, or homes sold after the foundation was already in the ground. The company’s executives believe that diversification is largely responsible for the record earnings in the quarter.
“The advantage to our spec business is that we can build faster with margins that are still strong, and we are able to meet the demand from buyers who want to move in sooner,” said Toll Brothers CFO Marty Connor. “We believe this is the right strategy.”
The luxury homebuilder delivered 2,641 homes in the second fiscal quarter at an average price of $1 million. The resulting $2.65 billion in home sales revenue represents a six percent increase year over year and set a second-quarter record.
Meanwhile, the company’s net signed contract value increased by 29 percent compared to the same quarter in 2023 to $2.94 billion.
Read more about Toll Brothers and its new strategy in the Philadelphia Business Journal.
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