The Toro Company Reports Second Quarter Fiscal 2025 Results

The Toro Company, a global provider of solutions for the outdoor environment, has released its financial results for the second quarter of fiscal 2025. The report highlights the company's performance amidst challenging market conditions, with a focus on the resilience and strategic initiatives driving its Professional segment growth.

Financial Highlights

For the second quarter of fiscal 2025, The Toro Company reported net sales of $1.32 billion, a slight decrease from $1.35 billion in the same period of fiscal 2024. The company's reported diluted earnings per share (EPS) stood at $1.37, marginally down from $1.38 in the previous year. However, adjusted diluted EPS saw a slight increase to $1.42 from $1.40 in fiscal 2024.

Net earnings for the quarter were $136.8 million, down from $144.8 million in the same period last year. The gross margin was reported at 33.1%, a slight decline from 33.6% in the prior year, primarily due to higher material and manufacturing costs.

Business and Operational Highlights

The Professional segment showed positive momentum with net sales of $1.01 billion, up 0.8% from the previous year. This growth was driven by higher shipments of golf and grounds products. However, the Residential segment faced challenges, with net sales declining by 11.4% to $297.4 million, primarily due to lower shipments of walk power mowers and zero-turn mowers.

Professional segment earnings increased to $202.1 million from $190.7 million, reflecting a profitability improvement to 19.9% of net sales. In contrast, Residential segment earnings dropped to $16.1 million from $36.1 million, impacted by higher material and manufacturing costs.

Strategic Initiatives and Corporate Developments

The company continues to focus on strategic initiatives to navigate near-term headwinds. Management highlighted efforts to sustain performance through a strong portfolio and disciplined execution. The company also updated its full-year fiscal 2025 guidance, expecting total company net sales to range from flat to down 3%, with adjusted diluted EPS projected between $4.15 and $4.30.

Management's Perspective

Richard M. Olson, Chairman and CEO, emphasized the company's resilience and agility in delivering innovative solutions and exceptional service. He acknowledged the pressure on top-line growth in the Residential segment but highlighted the continued momentum in the Professional segment, which exceeded earnings expectations for the quarter.

Future Outlook

Looking ahead, The Toro Company remains confident in its ability to manage controllable factors while mitigating macroeconomic risks. The company anticipates continued strong demand and stable supply for its underground construction and golf and grounds businesses, with weather patterns expected to align with historical averages for the remainder of the year.

SEC Filing: TORO CO [ TTC ] - 8-K - Jun. 05, 2025