Toro Company Adjusts Forecast Amidst Sales Decline

Overview of Toro Company's Recent Performance

The Toro Company (TTC) recently reported its second-quarter financial results for fiscal 2025, highlighting challenges within its residential sales segment. The company's total sales for the quarter fell by 2% year-over-year, reaching $1.32 billion, which fell short of the expected $1.35 billion consensus.

Decline in Residential Sales

Sales in the residential segment experienced a significant drop of 11.4% year over year, totaling $297.4 million. This decline can be attributed to decreased shipments in key categories, including walk power mowers and zero-turn mowers, as well as a previously completed sale of Pope Products during the prior year.

Professional Segment Performance

In contrast, the professional segment saw a slight increase in sales by 0.8%, amounting to $1.014 billion. This group benefited from higher demand for golf and grounds maintenance products; however, some of this positive growth was offset by lower sales of underground and specialty construction products alongside divestitures from the past year.

Financial Metrics and Margins

The adjusted gross margin for Toro's latest quarter witnessed a slight decrease to 33.4%, down from 33.6% a year earlier. Additionally, the adjusted operating margin fell to 13.7% compared to 14.2% in the same quarter last year. Despite these challenges, the company reported cash and cash equivalents of $176.5 million as of May 2, 2025.

Adjusted Earnings Per Share

Toro's adjusted earnings per share (EPS) reached $1.42, reflecting a 1% increase year-over-year, which surpassed market expectations of $1.40 per share. This metric illustrates the company’s ability to maintain earnings despite declining revenues.

Revised Fiscal Year 2025 Outlook

Looking ahead, Toro Company has revised its guidance for fiscal year 2025, lowering its adjusted EPS forecast from a range of $4.25 to $4.40 to a new range of $4.15 to $4.30. In addition, the company's net sales growth outlook is now expected to be flat to a decline of 3%, compared to the previous outlook of flat to 1% growth.

CEO's Perspective

Richard M. Olson, chairman and chief executive officer of Toro, commented on the company's current position amidst various challenges: “We are taking decisive steps to strategically position the company to navigate near-term headwinds. Our strong portfolio and disciplined execution remain crucial to sustain our performance amid these macroeconomic risks.”

Investment Options Related to Toro

Investors looking for exposure to Toro's market performance may do so through funds such as the Invesco Water Resources ETF (PHO) and the Neuberger Berman Small-Mid Cap ETF (NBSM).

Market Response

Following the announcement of these results and guidance adjustments, shares of Toro Company (TTC) saw a modest decline of 1.8%, trading at approximately $74.22 in early market activity.

Frequently Asked Questions

What are the main reasons for the decline in Toro's residential sales?

The decline is primarily due to decreased shipments of key products like walk power mowers, zero-turn mowers, and a previous year's sale affecting comparisons.

How did Toro's professional segment perform?

The professional segment reported a slight growth of 0.8% due to increased demand for golf and grounds products, despite some declines in other areas.

What are the new earnings per share forecasts for fiscal year 2025?

The revised EPS forecast is now projected between $4.15 and $4.30, down from previous estimates.

What are the recent financial highlights for Toro?

For the second quarter, adjusted EPS was $1.42, surpassing analysts' expectations, even as overall sales declined.

How are investors reacting to Toro's report?

Investors responded negatively, causing shares to drop by 1.8% in early trading following the results announcement.

About The Author

Hello, I'm 30-year-old financial writer and expert Addison Perry, and I love to simplify the intricacies of the financial industry. I've committed myself over the years to deciphering the subtleties of investing techniques and economic trends and converting them into doable guidance that anybody can use. My goal with writings and books is to make money interesting and approachable so that readers may take charge of their financial futures.

My enthusiasm to empowerment and education has propelled me through my career in finance. I write because I think that everyone should be able to make educated financial decisions, and I try to provide that. Regardless of experience level with investing, my work is intended to provide insightful analysis and practical advice to enable you to thrive in the always changing financial environment. I appreciate you traveling with me toward success and financial literacy.

Contact Addison Perry privately here. Or send an email with ATTN: Addison Perry as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.