TOL - FY2Q26 Results And Commentary Show Demand Holding Y/Y Into May

研报英文原文证据摘录

TOL - FY2Q26 Results And Commentary Show Demand Holding Y/Y Into May

ed out their superior land sourcing position due to the types

of properties they target and limited national competition. We tend to agree with this, thus would expect acquired land cost increases to

moderate eventually. On a related note, management said on the call that about 20% of deliveries in the quarter were from lots financed with

land banking, but about 30% of current controlled lot supply is in land banking agreements. Given this, we expect some modest incremental

headwinds as the mix of land-banked deliveries increases from 20% to 30%. We think this will take several quarters to fully play out.

Arkansas Acquisition Closed in Early May. About a month ago, TOL announced the acquisition of a private homebuilder in northwest

Arkansas, which management noted on the call closed earlier this month. The business comes with a 1,500 lot supply and serves the

first time and move up category in the area, with homes priced between $400K-$1m+. Financial terms were not disclosed. Note that while

this is a relatively small transaction (only adds about 2% to current lot supply), Redfin recently listed the Fayettville-Springdale-Rogers,

AR metro as the number 1 emerging luxury market in the US (article link) in its April luxury housing report. This deal is at least partly

responsible for the delivery guide midpoint increase for the year.

Midwest Geographies Called Out as Potential Areas for Expansion. In addition to the commentary on Arkansas, management listed a

couple geographies on the call as areas they were potentially eyeing for expansion. This included Indianapolis and Minneapolis. We have

been eyeing the Midwest as a longer term geographic trend for the broader homebuilding industry.