Toll Brothers Posts 47% Order Decline, Sets Bleak Outlook
Luxury-home builder Toll Brothers Inc. said orders in its fiscal third quarter fell 47%, with no signs of a rebound in sight.</br></br>The Horsham, Pa., company said orders in the quarter ended July 31 totaled 1,443 units, compared with 2,746 units a year earlier. The decline was bigger than the 33% to 40% decrease Wall Street had expected and worse than its 32% order decline in the previous quarter.</br></br>Chief Executive Robert Toll blamed an inventory glut and waning home-buyer confidence. "It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors," he said.</br></br>Toll Brothers shares were down $1.70, or 6.4%, to $24.88 in 4 p.m. composite trading on the New York Stock Exchange. Shares of other home builders also fell as the news appeared to spook investors across the sector.</br></br>Toll Brothers said cancellations increased in a number of markets, like Orlando, Fla.; Northern California; Palm Springs, Calif.; Las Vegas and Phoenix. The home builder said it has opted not to slash home prices in order to move sales.