Douglas C. Yearley, Jr., Toll Brothers' chairman and CEO, states, "Our first quarter contracts were up 31% in units and 28% in dollars, and our contracts per-community were up 28%, compared to one year ago. We saw improvement in California with contracts up 32% in units and 10% in dollars. Demand has remained strong through the start of our second quarter and we are experiencing pricing power in many of our markets."

Yearley continues that the firm's guidance for deliveries for FY 2020 is between 8,600 and 9,100 homes, at an average price of between $800,000 and $820,000 per home.

"The adjusted gross margin in the first half of FY 2020 will continue to reflect the challenging sales environment we experienced through the third quarter of FY 2019," he says. "We expect our adjusted gross margin in FY 2020's second half to improve by approximately 100 basis points over the first half, reflecting the improved selling environment that began in late FY 2019."

The more recent growth in contracts and absorptions, increase in pricing power, and the firm's projected 10% community count expansion should contribute to margin and earnings improvement in FY 2021, according to Yearley.