Victoria Piskarev

Victoria Piskarev asked about the elasticity of demand and how recent price increases have impacted volume.

Answer

Chairman, President, and CEO Scott Thompson stated that despite significant price increases over the last couple of years, there has been no significant impact on volume. He noted that the industry has historically been efficient in passing commodity cost increases through the channel.

Victoria Piskarev from Bank of America inquired about the elasticity of demand and the impact of recent price increases on the company's sales volume.

Answer

Scott Thompson, Chairman, President, and CEO of Somnigroup International, stated that despite significant price increases over the past couple of years, he has not observed any significant impact on volume. He noted that the industry has historically been efficient in passing commodity cost increases through the channel and appears capable of continuing this trend.

Victoria Piskarev, on for Rafe Jadrzyk, asked for details on the company's tariff exposure, including the specific components affected and the mitigating actions being taken.

Answer

CFO Bhaskar Rao stated that the company's view on tariffs hasn't significantly changed, with the primary exposure related to steel and aluminum for adjustable bases, and a lesser impact from textiles due to USMCA issues. CEO Scott Thompson added that the industry as a whole has effectively mitigated the known tariff exposure through supply chain adjustments, cost savings, and minor price increases.

Victoria Piskarev, on behalf of Rafe Jadrosic, questioned Toll Brothers' expectations for stick-and-brick and labor costs in fiscal 2026 and what is embedded in the current guidance.

Answer

Chairman and CEO Douglas Yearley indicated that Toll Brothers is observing a modest decrease in construction costs, either flat or slightly down by $2-$3 per square foot in most regions, representing a couple of percentage points reduction. He noted that the guidance does not embed any further continued reduction in building costs for the remainder of the year.

Victoria Piskarev inquired about Toll Brothers' expectations for stick-and-brick costs and labor costs for fiscal 2026, and what assumptions regarding these costs are embedded in the company's guidance.

Answer

Douglas Yearley, Chairman and CEO, reported seeing a modest decrease in construction costs, either flat or slightly down by $2-$3 per square foot in most regions. He noted that this reduction, representing a couple of percentage points, is encouraging, but the company has not built in any further continued reduction in building costs for the remainder of fiscal 2026 guidance.