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TOL Latest Report

Earnings AnalystTuesday, Feb 18, 2025 11:17 pm ET

1min read

TOL --

Performance Review

Toll Brothers' total operating revenue on January 31, 2025 was Rmb1.8593 billion, a 4.45% decrease from Rmb1.9478 billion on January 31, 2024. This revenue decline reflects the company's challenges in revenue generation, which may affect its overall profitability and market performance.

Key Financial Data

1. Toll Brothers' operating revenue in the first quarter of 2025 was US$1.859 billion, a significant decrease from US$3.333 billion in the fourth quarter of 2024, mainly due to the weak demand and reduced delivery volumes.

2. Net profit decreased by 25.82% year-on-year to Rmb178 million, from Rmb475 million, showing a significant decline in profitability.

3. Income costs increased to Rmb1.4 billion in the first quarter, leading to a decrease in gross profit to Rmb460 million.

4. The overall economic situation and the shrinking real estate industry directly affected the company's performance, resulting in a significant decline in revenue.

5. The company attracted buyers through price cuts and lower mortgage rates, maintaining a certain sales performance despite the overall market weakness.

Peer Comparison

1. Industry-wide analysis: The overall real estate market faced pressure in sales in 2025, with many companies experiencing similar revenue declines, indicating that the industry is undergoing cyclical adjustments, with changes in competition and market demand as the main factors.

2. Peer evaluation analysis: Toll Brothers' operating revenue decline was relatively small, showing its relative stability in the industry. However, changes in market share and future growth potential still need to be monitored.

Summary

Toll Brothers faced pressure on revenue decline in the first quarter of 2025, mainly affected by weak demand, reduced delivery volumes, and the overall shrinking industry. However, the company still maintains a certain competitiveness in the high-end market and tries to attract buyers through marketing strategy adjustments.

Opportunities

1. With the decline in mortgage rates, buyers' purchasing power may increase, which has a positive impact on sales.

2. The demand for luxury residential markets remains strong, and Toll Brothers can further develop high-end products to capture a larger market share.

3. The company has improved sales flexibility and success rate through optimized sales strategies and cash transactions.

Risks

1. Continued weak demand may further affect the company's revenue, leading to a decline in financial performance.

2. Intensified industry competition may lead to a continuous decline in market share, affecting the company's long-term development.

3. Uncertainty in the overall economic environment may reduce consumer willingness to buy, affecting sales performance.

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