Toro riding mower on a bright green lawn, reflecting strong outdoor equipment demand and steady performance trends. Key Points Toro’s stock is trying to carve out a base after a tough stretch, with price action suggesting the selling pressure may be easing. The company is managing through near-term headwinds while pointing investors toward a firmer fiscal 2026 setup. Capital returns and large-holder positioning are part of the backdrop as the market looks for confirmation in upcoming updates. Interest ...

Core Insights - Toro reported a quarterly EPS of $0.91, exceeding analysts' expectations of $0.86 by $0.05, with revenue of $1.07 billion, surpassing the consensus estimate of $1.05 billion [2] - The company announced a quarterly dividend of $0.39 per share, increasing from the previous $0.38, resulting in an annualized dividend of $1.56 and a yield of 2.0% [3][4] - Institutional investors hold 87.95% of Toro's stock, with significant increases in positions from firms like AQR Capital Management and American Century Companies [5] Financial Performance - Toro's revenue for the quarter decreased by 0.9% compared to the same quarter last year, with a net margin of 7.01% and a return on equity of 28.90% [2] - The company has set its FY 2026 EPS guidance at 4.350-4.50, with analysts expecting an average EPS of 4.41 for the current fiscal year [2] Stock Performance - Toro's shares opened at $78.88, with a market capitalization of $7.72 billion, a P/E ratio of 24.88, and a beta of 0.84 [1] - The stock has a 52-week range of $62.34 to $87.46, with a quick ratio of 0.86 and a current ratio of 1.87 [1] Analyst Ratings - Toro has received mixed ratings from analysts, with three buy ratings, four hold ratings, and one sell rating, and a consensus price target of $92.20 [6] - Recent analyst actions include a downgrade from Zacks Research and price target adjustments from DA Davidson and Northland Securities [6] Options Trading Activity - There was a notable increase in options trading, with 1,176 put options purchased, representing a 1,709% increase compared to typical volumes [7] Company Overview - Toro specializes in outdoor equipment for residential, commercial, and professional markets, including lawn mowers, utility vehicles, and irrigation systems [8] - Founded in 1914 and headquartered in Bloomington, Minnesota, Toro has a long history of innovation in the grounds-care industry [9]

Core Insights - The Toro Company (TTC) has experienced a decline in share price since the last coverage, which was around $75 two months ago [1] Company Summary - The article discusses the recent performance of The Toro Company, particularly following its Q3 earnings report [1] - The share price of TTC has continued to decline, indicating potential challenges for the company [1] Analyst Background - The author has a master's degree in Analytics and a bachelor's degree in Accounting, with over 10 years of experience in the investment arena [1]

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Cost Management and Efficiency - The company aims to achieve annualized cost savings of over $125 million by fiscal 2027 through its "Amplifying Maximum Productivity" initiative[176]. - The company utilizes Lean methods in its manufacturing processes to streamline operations and reduce waste[41]. - The company utilizes DFM/A principles throughout the product development process to optimize product quality and reduce costs[42]. - Key cost exposures include commodities like steel, aluminum, and petroleum-based resins, which are subject to market price fluctuations and can impact manufacturing costs[44]. Environmental Commitment - The company is committed to increasing battery and hybrid product sales and reducing greenhouse gas emissions over time[176]. - The company is subject to California's AB 1346, which mandates that most new sales of small off-road engines must be zero-emission starting January 1, 2024[167]. - The business is subject to numerous environmental regulations, including emissions standards and waste disposal laws[85]. Product Quality and Innovation - The company emphasizes innovation and quality in its products, investing in new product development and improvements[38]. - The company faces significant risks associated with product quality issues and product liability claims, which could adversely affect its reputation and financial condition[171]. - The production system employs methodologies such as Kanban and build-to-order to align production with customer demand, resulting in improved service levels[43]. Market and Competition - The company faces competition from both larger and smaller firms across various markets, making precise market share estimation challenging[66]. - The order backlog represents unfulfilled customer orders and is an indicator of business conditions, though it does not directly predict future net sales[65]. Distribution and Sales - The company has a diverse distribution network with over 150 distributors and operates in more than 125 countries, reducing long-term dependency on any single customer[56]. - The company has agreements with third-party financing companies to provide alternative financing options to end-customers globally[63]. - Seasonal shipment volumes are highest in the fiscal second quarter, with retail demand peaking in the fiscal third quarter, impacting accounts receivable and working capital[51]. Employee Engagement and Development - The average number of employees during fiscal 2025 was 9,791, with a total of 9,227 employees as of October 31, 2025[72]. - Approximately 9.4% of employees were represented by a union under collective bargaining agreements, with agreements set to expire between March 2026 and October 2028[73]. - The company provides mandatory safety training each month to empower employees with knowledge and tools for safe choices[74]. - Employee engagement surveys are conducted to enhance the employee experience and promote retention[75]. - The company offers a wide range of professional development opportunities, including apprenticeships, job training, and leadership development programs[76]. - Health and wellness programs include 24/7 access to licensed physicians and on-site nurses at some manufacturing sites[77]. - The company conducts regular compensation market benchmarking to provide competitive pay and benefits[79]. Community and Social Responsibility - Community involvement includes employee volunteerism and donations, enhancing outdoor spaces and supporting local organizations[80]. - The company is committed to upholding human rights and prohibits all forms of child and forced labor[83]. Legal and Regulatory Compliance - The company is subject to extensive laws and regulations, which may increase compliance costs and affect its operating results[164]. - Compliance with existing laws and regulations has not historically impacted capital expenditures or earnings materially[87]. - The company monitors patent and trademark registrations to minimize infringement risks and is involved in patent litigation from time to time[48][49]. Company Background - The Toro Company was incorporated in 1935 and reincorporated in Delaware in 1983[88]. - The company files reports and other information with the SEC, which can be accessed on their website[89].

Financial Data and Key Metrics Changes - The company reported fourth-quarter consolidated net sales of $1.07 billion, a decrease of 0.9% from the previous year, primarily due to lower shipments and prior-year divestitures, partially offset by net price realization [13][14] - For the full year, total consolidated net sales were $4.51 billion, essentially in line with fiscal 2024 net sales, adjusting for the impact of divestitures [13][14] - Adjusted diluted earnings per share for the fourth quarter were $0.91, compared to $0.95 in the prior year, reflecting higher expenses related to restored employee incentives [15] - Full-year adjusted earnings per diluted share were $4.20, slightly up from $4.17 in fiscal 2024 [15] Business Line Data and Key Metrics Changes - Professional segment net sales in the fourth quarter were $910 million, virtually equal to last year's performance, with earnings margin at 19.2%, up 60 basis points year-over-year [11][12] - Residential segment fourth-quarter net sales were $147 million, down 5.1% from the prior year, but exceeded expectations due to net price realization and higher shipments of snow products [12][13] - For the full year, professional segment net sales rose 1.9% to $3.62 billion, while residential segment net sales were $858.4 million, down 14% from the prior year [12][13] Market Data and Key Metrics Changes - The company noted sustained momentum in the underground construction business and better-than-anticipated growth in snow and ice management [4][5] - The acquisition of Tornado Infrastructure Technologies is expected to enhance the company's position in the underground construction market, driven by new infrastructure installation projects [7][16] Company Strategy and Development Direction - The company is focused on leveraging its diverse portfolio and driving operational excellence, with a commitment to investing in technology and innovation [4][7] - The AMP program aims to achieve $125 million in cost savings by the end of 2026, up from the original target of at least $100 million [8][19] - The company is strategically investing in growth markets, particularly in golf, grounds, and underground construction, to strengthen its competitive position [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the macroeconomic environment, noting potential pressures from inflation and interest rates but also highlighting strong demand in key markets [17][21] - For fiscal 2026, the company expects total net sales to rise 2%-5%, with professional segment sales anticipated to grow mid-single digits and residential segment sales expected to decline low to mid-single digits [17][18] Other Important Information - The company achieved record free cash flow of $578 million for the year, resulting in a free cash flow conversion rate of 146% [4][15] - The company returned $441 million to shareholders through dividends and share repurchases, demonstrating confidence in its cash generation capabilities [15][19] Q&A Session Summary Question: Guidance on sales growth and volume expectations - Management indicated that a portion of the sales growth is attributed to the Tornado acquisition, with continued strength expected in the professional segment, particularly in underground construction [33][34] Question: Improvement expectations in residential segment - Management expects some recovery in the residential segment, driven by productivity improvements and favorable snow conditions, despite ongoing homeowner caution [37][39] Question: Details on the AMP program and savings - The company raised its AMP savings target to $125 million, with savings expected to come from supply-based improvements and operational efficiency, without needing increased volume [40][41] Question: Raw material cost expectations for 2026 - Management anticipates some inflation in raw material costs early in the year, settling mid-year, and has built these expectations into their guidance [44] Question: Channel inventories and backlog status - Management reported improved channel inventories and a $400 million year-over-year improvement in backlog, indicating strong demand across various segments [51][52]

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $1.07 billion for Q4, a decrease of 0.9% from the previous year, primarily due to lower shipments and prior-year divestitures, partially offset by net price realization [21] - For the full year, total consolidated net sales were $4.5 billion, down 1.6% from fiscal 2024, largely due to strategic divestitures [7] - Adjusted diluted earnings per share for Q4 were $0.91, compared to $0.95 in the prior year, reflecting higher expenses related to employee incentive compensation [23] - Full-year adjusted earnings per diluted share were $4.20, slightly up from $4.17 in fiscal 2024 [24] Business Line Data and Key Metrics Changes - Professional segment net sales for Q4 were $910 million, virtually unchanged from the previous year, with earnings margin at 19.2%, up 60 basis points year-over-year [17] - Residential segment net sales for Q4 were $147 million, down 5.1% from the prior year, but exceeded expectations due to net price realization [20] - Full-year professional segment net sales rose 1.9% to $3.62 billion, with earnings margin improving to 19.4% from 18% in fiscal 2024 [19] Market Data and Key Metrics Changes - The company is focusing on key growth markets, particularly in golf, grounds, and underground specialty construction, anticipating a multi-year growth trajectory [8] - The acquisition of Tornado Infrastructure Equipment is expected to enhance the company's position in the underground construction market [9] Company Strategy and Development Direction - The company aims to enhance customer productivity through investments in technology and innovation, with a focus on operational excellence and cost savings [5][10] - The AMP program has been expanded, with a new savings target of $125 million by the end of 2026, up from the previous target of $100 million [11] - The company is committed to maintaining strong profit margins and market competitiveness through productivity improvements and selective price increases [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the macroeconomic environment, noting potential pressures from inflation and interest rates on consumer confidence [29] - For fiscal 2026, the company expects total net sales to rise by 2%-5%, with professional segment sales anticipated to grow mid-single digits and residential segment sales expected to decline low to mid-single digits [30] - The company is confident in its ability to navigate cost pressures while continuing to invest in innovation [31] Other Important Information - The company achieved record free cash flow of $578 million for the year, with a conversion rate of 146% [12] - A quarterly dividend increase from $0.38 to $0.39 was announced, along with a share repurchase authorization of up to six million shares [34] Q&A Session Summary Question: Guidance on sales growth and volume expectations - Management acknowledged that a portion of the sales growth is attributed to the Tornado acquisition and indicated continued strength in the professional segment, particularly in underground construction [52][54] Question: Improvement expectations in residential segment - Management expects some recovery in the residential segment, influenced by macroeconomic factors and potential restocking in the channel [57][60] Question: Details on the AMP program and additional savings - Management confirmed that the additional $25 million in savings is achievable through ongoing operational efficiency initiatives without needing volume growth [61][62] Question: Raw material cost expectations for 2026 - Management anticipates some inflation in raw material costs early in the year, with expectations of stabilization by mid-year [66] Question: Channel inventory status - Management reported that channel inventories are in good shape, with improved lead times contributing to customer confidence [73][80] Question: Margin guidance for professional segment - Management indicated that while some benefits from the AMP program will continue, the addition of Tornado may not be fully accretive to operating margin in the first year [81][82]

Financial Data and Key Metrics Changes - The company reported fourth-quarter consolidated net sales of $1.07 billion, a decrease of 0.9% from the previous year, primarily due to lower shipments and prior-year divestitures, partially offset by net price realization [14] - For the full year, total consolidated net sales were $4.51 billion, essentially in line with fiscal 2024 net sales, adjusting for the impact of divestitures [14] - Adjusted diluted earnings per share for the fourth quarter were $0.91, compared to $0.95 in the prior year, reflecting higher expenses related to restored employee incentives [15][16] - Full-year adjusted earnings per diluted share were $4.20, slightly up from $4.17 in fiscal 2024 [16] Business Line Data and Key Metrics Changes - Professional segment net sales in the fourth quarter were $910 million, virtually equal to last year's performance, with earnings margin at 19.2%, up 60 basis points year-over-year [11][12] - Residential segment fourth-quarter net sales were $147 million, down 5.1% from the prior year, but exceeded expectations due to net price realization and higher shipments of snow products [12][13] - For the full year, residential segment net sales were $858.4 million, down 14% from the prior year, with earnings margin at 4.2% [14] Market Data and Key Metrics Changes - The company experienced sustained momentum in the underground construction business and better-than-anticipated growth in snow and ice management [5] - The acquisition of Tornado Infrastructure Technologies is expected to enhance the company's position in the underground construction market, driven by new infrastructure installation projects [6][25] Company Strategy and Development Direction - The company is focused on leveraging its diverse portfolio, driving operational excellence, and investing in technology and innovation to enhance customer productivity [4][10] - The AMP program aims to achieve $125 million in annualized run-rate cost savings by the end of 2026, up from the original target of at least $100 million [8][19] - The company is strategically investing in growth markets such as golf, grounds, and underground construction, while maintaining a disciplined approach to capital deployment [17][28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the macroeconomic environment, including inflation and interest rates, which may pressure consumer confidence [18] - For fiscal 2026, the company expects total net sales to rise by 2%-5%, with professional segment sales expected to grow mid-single digits and residential segment sales expected to decline low to mid-single digits [18][19] - The company anticipates an improvement in total adjusted gross margin in 2026, reflecting its ability to navigate cost pressures while investing in innovation [19] Other Important Information - The company returned $441 million to shareholders through dividends and share repurchases in fiscal 2025, demonstrating confidence in its cash generation capabilities [16][21] - The leverage ratio remains healthy at 1.3 times, providing financial flexibility for strategic investments [17] Q&A Session Summary Question: Guidance on sales growth and volume expectations - Management indicated that a portion of the sales growth is attributed to the Tornado acquisition, with continued strength expected in the professional segment, particularly in underground construction and golf [30][31] Question: Residential segment outlook - The residential segment is expected to see a decline in the first quarter but may improve in subsequent quarters due to factors like snow and channel restocking [32][33] Question: AMP program and savings targets - The company raised its AMP savings target to $125 million, with savings expected to come from operational efficiency and supply chain improvements [34][35] Question: Raw material costs for 2026 - Management expects some inflation in raw material costs early in the year, settling mid-year [37] Question: Channel inventories and backlog status - The company reported a $400 million improvement in backlog year-over-year, indicating strong demand across various segments [38][39]

Financial Performance - The company's net sales reached $451 billion in F25[39], with a CAGR of +78% from F15 to F25[26] - Adjusted EPS CAGR was +107% from F15 to F25[26] - Average ROIC was +228% from F15 to F25[26] - Record free cash flow of $578 million in F25, up from $471 million in F24[30], representing a free cash flow conversion of 146%, up from 112%[30] - The company returned a total of $441 million to shareholders in F25, including $1511 million in dividends and $290 million in share repurchases[30, 110] - ROIC increased to 170% in F25, up from 166% in F24[30] Segment Performance - Professional segment net sales reached $3624 billion in F25, up 19% from $3557 billion in F24[30, 32] - Professional segment earnings margin increased to 194% in F25, up from 180% in F24[31] - Residential segment net sales reached $086 billion in F25[64] Strategic Initiatives and Outlook - The company expects annualized savings of $125 million+ from productivity initiatives, with $86 million already implemented[33] - The company estimates F26 tariff headwinds to be approximately $100 million[116] - The company provides F26 full-year guidance, expecting net sales growth of 2% to 5% and adjusted diluted EPS of $435 to $450[130]

分组1 - Toro reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.86 per share, but down from $0.95 per share a year ago, representing an earnings surprise of +5.81% [1] - The company achieved revenues of $1.07 billion for the quarter ended October 2025, surpassing the Zacks Consensus Estimate by 2.09%, although this is a slight decrease from year-ago revenues of $1.08 billion [2] - Toro has surpassed consensus EPS estimates in all four of the last quarters, but has only topped consensus revenue estimates once during the same period [2] 分组2 - The stock has underperformed, losing about 9.3% since the beginning of the year, compared to the S&P 500's gain of 15.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.81 on revenues of $990.01 million, and for the current fiscal year, it is $4.67 on revenues of $4.59 billion [7] - The Tools - Handheld industry, to which Toro belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]