Toll Brothers (TOL): Q2 FY25 Earnings Live Coverage

Toll Brothers has risen +15% over the past month, though it remains down –15% YTD. For Q2, analysts forecast EPS of $2.89 on $2.67 billion in revenue, both modestly down year-over-year. The quarter is expected to show pressure on margins and normalized new order activity as the Fed’s rate outlook clouds luxury housing demand.

TOL has topped earnings in 3 of the past 4 quarters. FY25 EPS consensus is $13.72, with revenue expected to fall slightly to $10.71 billion. With gross margins near peak and affordability stretched in core markets, the key issue is whether Toll can continue to offset mortgage headwinds with product mix and pricing power.

High-End Housing Navigates Affordability Crosswinds

Homebuilders are walking a tightrope between strong underlying demand and stubbornly high mortgage rates. New home sales have held up better than existing inventory, but affordability remains a constraint, especially at luxury price points. PulteGroup and D.R. Horton both issued mixed outlooks, flagging buyer hesitation despite resilient order books.

Toll Brothers, as a premium builder, has some cushion via design customization and margin-rich communities, but it’s not immune. The Fed’s hold on rate cuts has dampened spring season enthusiasm, and any slippage in orders or cancellation rates could reignite pressure. On the flip side, limited resale supply and high rental inflation continue to provide structural support for builders with land positions.

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