Toll Brothers Inc. (NYSE: TOL) reported fourth-quarter and full-year fiscal 2016 results before markets opened Tuesday morning. The luxury homebuilder reported quarterly diluted earnings per share (EPS) of $0.67 on revenues of $1.86 billion for the quarter. In the same period a year ago, Toll Brothers reported $0.80 EPS on revenue of $1.44 billion. Fourth-quarter results also compare to consensus estimates for EPS of $0.99 and $1.79 billion in revenue.

For the full year, the company reported EPS of $2.18 and revenues of $5.17 billion, compared with $1.97 per share and $4.17 billion last year. Analysts were looking for EPS of $2.50 and $5.11 billion in revenue.

The company’s average price for a delivered home increased from $790,000 in the fourth quarter a year ago to $834,000. The average price of net signed contracts slipped year over year from $872,000 to $848,000. Toll Brothers delivered 2,224 units in the quarter and reported 4,685 units in its backlog with an average price per home of $850,000.

Adjusted for a $2.5 million inventory impairment and a $121.5 million warranty charge, pretax income for the quarter totaled $291.8 million, compared with adjusted income of $236.7 million in the year-ago quarter. Adjusted pretax income was $728.4 million for the full year, compared to $586 million last year.

Gross margin slipped from 22.3% in the year-ago quarter to 15.4%. For the full year, gross margins totaled 19.8%, down from 21.6% in 2015. Adjusted gross margin for the full year was 25.6%, down from 26.3% in 2015.

CEO Douglas Yearley said:

With our strong fourth quarter operating performance, double digit increase in year-end backlog, and positive sales trends to jump start our new fiscal year, we see growth in revenues and earnings and an improvement in return on equity in FY 2017. … 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 FY 2016, approximately 22% of our settlements included one primary buyer thirty-five years of age or under.

In its fiscal year 2017 guidance, Toll Brothers expects first-quarter deliveries of 1,000 to 1,250 new homes with an average price of $750,000 to $780,000. For the full year, deliveries are pegged at 6,500 to 7,500 new homes with an average selling price of $775,000 to $825,000. Full-year adjusted gross margins are forecast at 24.8% to 25.3%, including a 30 to 40 basis-point reduction related to the company’s acquisition of Boise, Idaho, homebuilder Coleman Homes.

Shares traded up about 2% Tuesday morning at $31.07, in a 52-week range of $23.75 to $37.09. The consensus 12-month price target on the stock is $36.67.

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