Toll Brothers Inc. (TOL) announced revised full-year 2026 guidance that fell short of analyst expectations, citing elevated borrowing costs and weakening demand in key markets. The company lowered its projected home delivery range and adjusted revenue outlook.
- Toll Brothers revised 2026 home delivery guidance to 13,900–14,500 units, down from 14,500–15,500
- Revenue forecast adjusted to $11.3B–$11.8B from $11.5B–$12.2B
- Backlog value declined to $13.7B in Q3 2025, down from $14.8B YoY
- Signed contracts fell 9% year-over-year in Q3 2025
- 30-year fixed mortgage rates averaged above 7% in late 2025, impacting affordability
- TOL shares dropped 5.3% in after-hours trading following guidance release
Toll Brothers Inc. (TOL) has updated its 2026 outlook, projecting between 13,900 and 14,500 home deliveries, down from the previously anticipated 14,500 to 15,500 units. The revised guidance reflects a strategic recalibration amid persistent challenges in the residential construction sector. The company also revised its 2026 revenue forecast to a range of $11.3 billion to $11.8 billion, compared to the prior estimate of $11.5 billion to $12.2 billion. The downward revision comes as mortgage rates remain elevated, with the 30-year fixed rate averaging above 7% throughout late 2025. This has constrained affordability and reduced buyer activity, particularly in higher-priced segments where Toll Brothers operates. The company noted that absorption rates in new communities have declined by approximately 18% year-over-year in its core markets, including the Northeast and California. Toll Brothers reported a 9% year-over-year decline in signed contracts during the third quarter of 2025, with backlog value decreasing to $13.7 billion from $14.8 billion in the same period of the prior year. The company attributed this trend to both macroeconomic pressures and a shift in consumer sentiment toward delayed purchases. The announcement prompted immediate market reaction, with TOL shares dropping 5.3% in after-hours trading. Investors and analysts are now reassessing the trajectory of the homebuilding sector, with similar companies such as Lennar Corporation (LEN) and D.R. Horton (DHI) also facing scrutiny over their forward guidance. The adjustments underscore ongoing volatility in the U.S. housing market despite recent signs of stabilization in inventory levels.