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Toll Brothers’ Hidden Edge: Buyers Are Spending $207,000 On Design Upgrades!

Toll Brothers reported third-quarter fiscal 2026 results showing solid performance despite low consumer confidence and elevated mortgage rates. The company delivered 2,662 homes and generated $2.6 billion in home sales revenue, both above the midpoint of guidance. Adjusted gross margin reached 25.6%, exceeding guidance by 35 basis points through disciplined pricing, operational efficiencies, and favorable mix. Earnings totaled $280.1 million, or $2.97 per diluted share, also above expectations. Net signed contracts increased 5% year-over-year, reflecting resilient demand led by luxury move-up buyers. This group represented approximately 61% of third-quarter home sales revenue and generated the highest margins among buyer segments. Luxury first-time and move-down buyers accounted for smaller portions. Toll Brothers continues prioritizing pricing discipline and margin optimization over sales pace, targeting affluent customers supported by higher incomes, substantial home equity, and significant stock portfolios. Market performance varied geographically.