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In the last reported quarter, the company’s adjusted earnings and total revenues topped the Zacks Consensus Estimate by 5.4% and 5.1%, respectively. Year over year, both metrics declined 22.3% and 7.6%, respectively.
TOL’s earnings surpassed estimates in three of the trailing four quarters and missed on the remaining occasion, with an average surprise of 2.6%.
How are Estimates Placed for TOL Stock?
The Zacks Consensus Estimate for fiscal third-quarter earnings per share (EPS) has moved south to $2.89 from $2.90 in the past 60 days. However, the revised estimate indicates a 22.3% year-over-year decline.
The consensus estimate for total revenues is pegged at $2.6 billion, indicating a 11.8% year-over-year decline from $3 billion.
Factors Likely to Have Shaped Toll Brothers’ Q3 Performance
Revenues
During the fiscal third quarter, Toll Brothers’ top-line performance is expected to have declined year over year due to ongoing uncertainties in the housing market in the United States. Homebuyers’ sentiments are likely to have been weak as affordability challenges persist amid elevated mortgage rates and an uncertain economic scenario. Per Freddie Mac, the 30-year fixed mortgage rate has climbed from 6.37% as of the week ending May 7, 2026, to 6.66% as of the week ending July 30, 2026. Demand softness across the South, Mountain and Pacific geographic segments is likely to have restricted the revenue growth.
For the fiscal third quarter, TOL expects home deliveries to be between 2,600 units and 2,700 units, indicating a decline from 2,959 units delivered in the year-ago quarter. We expect home deliveries to be down 9.8% year over year to 2,669 units.
Nonetheless, the strength of its luxury positioning alongside the approach of offering affordable luxury homes is encouraging. Besides, the improvements in cycle times, increased supply of spec homes and favorable pricing measures are expected to have boded well in the fiscal third quarter.
For the quarter, Toll Brothers expects the average selling price (ASP) of delivered homes to be within $965,000-$985,000, up from $973,600 in the year-ago quarter. Our model expects the metric to inch up year over year by 0.6% to $979,900 in the fiscal third quarter.
Earnings & Margins
The bottom line of Toll Brothers is expected to have tumbled in the fiscal third quarter due to low leverage from weak revenue growth, higher payroll costs and marketing and insurance costs. Besides, a shift in the mix of revenues to lower-margin products in certain geographic regions is expected to have weighed on the home sales gross margin during the fiscal third quarter.
For the quarter to be reported, Toll Brothers expects adjusted home sales gross margin to be 25.25%, reflecting a 225-basis point (bps) contraction year over year. The homebuilder also expects SG&A expenses (as a percentage of home sales revenues) to be about 10%, up 120 bps year over year.
Backlog
For the fiscal third quarter, our model expects a total backlog of 5,257 units, down year over year by 4.3%, with potential revenues declining 2.1% to $6.24 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 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
NVR, Inc. (NVR - Free Report) reported second-quarter 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Earnings and Homebuilding revenues also declined on a year-over-year basis.
NVR’s quarter reflected stronger order activity and a lower cancellation rate, but fewer settlements, softer pricing and margin pressure weighed on results. Settlements fell 8% to 5,058 units from 5,475 units, limiting revenue generation during the period. Backlog units increased 9% year over year, while Homebuilding's gross margin contracted amid higher lot costs, affordability challenges and land deposit impairments.
PulteGroup, Inc. (PHM - Free Report) reported better-than-expected second-quarter 2026 results, with adjusted earnings and total revenues topping the Zacks Consensus Estimate, but declining year over year.
PulteGroup’s quarterly results reflect reduced home-closing volumes, softer ASP and margin compression. Ongoing softness in the housing market because of weaker consumer confidence and affordability challenges due to high mortgage rates hurt the top-line growth. Home sale gross margin contracted 200 bps year over year to 25%.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2026 earnings of $3.20 per share, beating the Zacks Consensus Estimate of $2.99 by 7%. Revenues of $9.23 billion also surpassed the consensus mark of $9.19 billion by 0.5%. On a year-over-year basis, earnings declined 4.8%, while revenues increased marginally.
The earnings and revenue beat were driven by higher home-closing volumes, resilient home sales margins, disciplined management of pricing and incentives, and contributions from the Rental, Forestar and Financial Services businesses. However, lower profitability, elevated incentives and cautious consumer demand continued to weigh on results. D.R. Horton now expects fiscal 2026 consolidated revenues of $32.5-$33 billion, down from $33.5-$34.5 billion expected earlier.
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Toll Brothers to Report Q3 Earnings: Here's What to Expect This Season
Key Takeaways
Toll Brothers, Inc. (TOL - Free Report) is scheduled to report its third-quarter fiscal 2026 results on Aug. 18, after market close.
In the last reported quarter, the company’s adjusted earnings and total revenues topped the Zacks Consensus Estimate by 5.4% and 5.1%, respectively. Year over year, both metrics declined 22.3% and 7.6%, respectively.
TOL’s earnings surpassed estimates in three of the trailing four quarters and missed on the remaining occasion, with an average surprise of 2.6%.
How are Estimates Placed for TOL Stock?
The Zacks Consensus Estimate for fiscal third-quarter earnings per share (EPS) has moved south to $2.89 from $2.90 in the past 60 days. However, the revised estimate indicates a 22.3% year-over-year decline.
The consensus estimate for total revenues is pegged at $2.6 billion, indicating a 11.8% year-over-year decline from $3 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’ Q3 Performance
Revenues
During the fiscal third quarter, Toll Brothers’ top-line performance is expected to have declined year over year due to ongoing uncertainties in the housing market in the United States. Homebuyers’ sentiments are likely to have been weak as affordability challenges persist amid elevated mortgage rates and an uncertain economic scenario. Per Freddie Mac, the 30-year fixed mortgage rate has climbed from 6.37% as of the week ending May 7, 2026, to 6.66% as of the week ending July 30, 2026. Demand softness across the South, Mountain and Pacific geographic segments is likely to have restricted the revenue growth.
For the fiscal third quarter, TOL expects home deliveries to be between 2,600 units and 2,700 units, indicating a decline from 2,959 units delivered in the year-ago quarter. We expect home deliveries to be down 9.8% year over year to 2,669 units.
Nonetheless, the strength of its luxury positioning alongside the approach of offering affordable luxury homes is encouraging. Besides, the improvements in cycle times, increased supply of spec homes and favorable pricing measures are expected to have boded well in the fiscal third quarter.
For the quarter, Toll Brothers expects the average selling price (ASP) of delivered homes to be within $965,000-$985,000, up from $973,600 in the year-ago quarter. Our model expects the metric to inch up year over year by 0.6% to $979,900 in the fiscal third quarter.
Earnings & Margins
The bottom line of Toll Brothers is expected to have tumbled in the fiscal third quarter due to low leverage from weak revenue growth, higher payroll costs and marketing and insurance costs. Besides, a shift in the mix of revenues to lower-margin products in certain geographic regions is expected to have weighed on the home sales gross margin during the fiscal third quarter.
For the quarter to be reported, Toll Brothers expects adjusted home sales gross margin to be 25.25%, reflecting a 225-basis point (bps) contraction year over year. The homebuilder also expects SG&A expenses (as a percentage of home sales revenues) to be about 10%, up 120 bps year over year.
Backlog
For the fiscal third quarter, our model expects a total backlog of 5,257 units, down year over year by 4.3%, with potential revenues declining 2.1% to $6.24 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 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
TOL’s Zacks Rank: The stock currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
NVR, Inc. (NVR - Free Report) reported second-quarter 2026 results, with earnings and Homebuilding revenues missing the Zacks Consensus Estimate. Earnings and Homebuilding revenues also declined on a year-over-year basis.
NVR’s quarter reflected stronger order activity and a lower cancellation rate, but fewer settlements, softer pricing and margin pressure weighed on results. Settlements fell 8% to 5,058 units from 5,475 units, limiting revenue generation during the period. Backlog units increased 9% year over year, while Homebuilding's gross margin contracted amid higher lot costs, affordability challenges and land deposit impairments.
PulteGroup, Inc. (PHM - Free Report) reported better-than-expected second-quarter 2026 results, with adjusted earnings and total revenues topping the Zacks Consensus Estimate, but declining year over year.
PulteGroup’s quarterly results reflect reduced home-closing volumes, softer ASP and margin compression. Ongoing softness in the housing market because of weaker consumer confidence and affordability challenges due to high mortgage rates hurt the top-line growth. Home sale gross margin contracted 200 bps year over year to 25%.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2026 earnings of $3.20 per share, beating the Zacks Consensus Estimate of $2.99 by 7%. Revenues of $9.23 billion also surpassed the consensus mark of $9.19 billion by 0.5%. On a year-over-year basis, earnings declined 4.8%, while revenues increased marginally.
The earnings and revenue beat were driven by higher home-closing volumes, resilient home sales margins, disciplined management of pricing and incentives, and contributions from the Rental, Forestar and Financial Services businesses. However, lower profitability, elevated incentives and cautious consumer demand continued to weigh on results. D.R. Horton now expects fiscal 2026 consolidated revenues of $32.5-$33 billion, down from $33.5-$34.5 billion expected earlier.