Toll Brothers 4Q16 Earnings Call Notes

Toll Brothers’ (TOL) CEO Douglas Yearley on Q4 2016 Results

Starting to benefit from millenial buyers

“With the millennial generation now entering their thirties and forming families, we are starting to benefit from the desire for home ownership from the affluent leading edge of this huge demographic wave. In fiscal year 2016, approximately 22% of our settlements included one primary buyer 35 years of age or under. We currently are courting these customers with our core suburban homes, urban condos and rental apartment properties. ”

Markets that are softer

“So, I gave in my statements the markets that are really strong. I don’t need to repeat those. There were many out west, but there are also many in the east. The markets right now that are softer for us would be Minneapolis, we have two communities; Illinois, which we talked about for a year is it’s just not returning as we thought it would; Huston, which we talked about many times and it’s at the higher price point, yes that is definitely softer and it is the location where we will have our first launch of T|Select; Connecticut, where we haven’t bought land in years and we have shrunk in size and it has its own issues, not just 5 million in Greenwich [ph] but throughout the state; and then Maryland, which has also been softer a while and we have talked about it, and we’re doing really well in Northern Virginia but we have struggled in Maryland. So that is the bucket of locations where we build that we have seen softness and we have redirected our Company into other areas, as you can see through the growth out west and in other places to account for it.”