US luxury homes builder Toll Brothers posted stronger than expected quarterly results as strength in the jobs market and improving wages continues to bolster demand for homes.
Home building deliveries rose 12 per cent year-on-year in the fiscal quarter to the end of January to 1,190 units. The company had previously said it expected to deliver between 1,000 to 1,250 units with an average price of between $750,000 and $780,000.
Meanwhile, net signed contracts, jumped by 22 per cent to 1,522 units.
The Pennsylvania-based company said revenue ticked down to $920.7m from $928.6m, topping Wall Street expectations of $889m.
Meanwhile, profits slipped to $70.4m from $73.2m. Earnings per share of 42 cents topped expectations by seven cents.
Douglas Yearley, Jr, the group’s chief executive, said it continued to “enjoy strong demand” over the three-month period.
Toll has benefited from low competition and a financially strong customer base, helped by gains in the stock market. Moreover, the company has stated that it is in the sweet spot in the market since its average home price of about $850,000 doesn’t fall into the so-called super-luxury market.
But in an effort to grow its business Toll has also unveiled options to draw millennial consumers. It unveiled its ‘T|Select’ line of homes — which incorporate the style of a higher-end home but with fewer structural options, a quicker delivery time and a slightly lower price. And in fiscal 2016 the company said 22 per cent of its settlements included one primary buyer that was 35 years or under.
The company also announced the acquisition of Coleman Homes late last year in a push to grow its presence in the West.
After posting annual declines for the past three years, Toll Brothers shares are up nearly 3 per cent so far this year as of Tuesday’s close. They rose another 1.2 per cent in pre-market trading on Wednesday.