Toll Brothers, Inc. (NYSE:TOL) Q3 2023 Earnings Conference Call August 23, 2023 8:30 AM ET
Company Participants
Douglas Yearley - Chairman and CEO
Martin Connor - CFO
Conference Call Participants
Rafe Jadrosich - Bank of America
Stephen Kim - Evercore ISI
Joe Ahlersmeyer - Deutsche Bank
Mike Dahl - RBC Capital Markets
Ken Zener - Seaport Research
Alex Barron - Housing Research Center
John Lovallo - UBS
Operator
Good morning, and welcome to the Toll Brothers Third Quarter Fiscal Year 2023 Conference Call. [Operator Instructions] The company is planning to end the call at 9:30 when the market opens. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead.
Douglas Yearley
Thank you, Betsy. Good morning. Welcome, and thank you all for joining us. Before I begin, I ask you to read our statement on forward-looking information in our earnings release of last night and on our website. I caution you that many statements on this call are forward-looking based on assumptions about the economy, world events, housing and financial markets, interest rates, the availability of labor and materials inflation and many other factors beyond our control that could significantly affect future results.
With me today are Martin Connor, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Fred Cooper, Senior VP of Finance and Investor Relations; Wendy Marlett, Chief Marketing Officer; and Gregg Ziegler, Senior VP and Treasurer.
We had another terrific quarter and are very pleased with our fiscal third quarter results. We beat our guidance for home sales revenues, adjusted gross margin, SG&A margin and earnings. Our quarter end backlog of 7,295 homes and $7.9 billion is strong, and our cancellations remain very low.
The market for new homes is solid, and we are well positioned with the right strategy in place to take advantage of it. As a result, we are raising our full year guidance for all of our core homebuilding metrics, including deliveries, adjusted gross margin and SG&A margin. We now project earnings of between $11.50 and $12 per diluted share in fiscal 2023 and a return on beginning equity of approximately 22%.
In the quarter, we delivered 2,524 homes at an average price of $1.06 billion, leading to record third quarter home sales revenues of $2.7 billion. Adjusted gross margin was 29.3% or 140 basis points above last year's third quarter, and our SG&A expense was 8.6% of home sales revenues 170 basis points better than last year.