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The Toro pany(TTC) - 2024 Q3 - Quarterly Results
TTCThe Toro pany(TTC)2024-09-05 12:58

Financial Performance - Third-quarter net sales reached 1.16billion,a6.91.16 billion, a 6.9% increase from 1.08 billion in the same period of fiscal 2023[1]. - Reported diluted EPS for the third quarter was 1.14,upfrom1.14, up from (0.14) in the same period last year, while adjusted diluted EPS was 1.18,a24.21.18, a 24.2% increase from 0.95[1][5]. - The professional segment net sales were 880.9million,down1.7880.9 million, down 1.7% from 896.3 million, primarily due to lower shipments of snow and ice management products[6]. - The residential segment net sales increased by 52.6% to 267.5million,drivenbyhighershipmentstothemasschannel[7].−Grossmarginforthethirdquarterwas34.8267.5 million, driven by higher shipments to the mass channel[7]. - Gross margin for the third quarter was 34.8%, up from 34.4% in the same prior-year period, attributed to productivity improvements and net price realization[8]. - Operating earnings for the three months ended August 2, 2024, were 148.1 million, a recovery from an operating loss of 19.1millioninthesameperiodlastyear[17].−NetearningsfortheninemonthsendedAugust2,2024,were19.1 million in the same period last year[17]. - Net earnings for the nine months ended August 2, 2024, were 329.0 million, compared to 259.4millionforthesameperiodlastyear,representinganincreaseof27.0259.4 million for the same period last year, representing an increase of 27.0%[17]. - Adjusted net earnings for the nine months ended August 2, 2024, were 337.5 million, down from 369.4millionforthesameperiodin2023[21].CashFlowandInvestments−NetcashprovidedbyoperatingactivitiesfortheninemonthsendedAugust2,2024,was369.4 million for the same period in 2023[21]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended August 2, 2024, was 329.8 million, significantly higher than 154.7millionforthesameperiodin2023[20].−Netcashusedininvestingactivitiesdecreasedto154.7 million for the same period in 2023[20]. - Net cash used in investing activities decreased to 43.4 million for the nine months ended August 2, 2024, from 119.2millioninthesameperiodof2023[20].−Netcashusedinfinancingactivitiesincreasedto119.2 million in the same period of 2023[20]. - Net cash used in financing activities increased to 260.5 million for the nine months ended August 2, 2024, compared to 82.4millionforthesameperiodin2023[20].−FreecashflowfortheninemonthsendedAugust2,2024,was82.4 million for the same period in 2023[20]. - Free cash flow for the nine months ended August 2, 2024, was 270.5 million, significantly up from 56.1millionforthesameperiodin2023[25].−Thecompanyreportedafreecashflowconversionpercentageof82.256.1 million for the same period in 2023[25]. - The company reported a free cash flow conversion percentage of 82.2% for the nine months ended August 2, 2024, a substantial increase from 21.6% in the prior year[25]. - Purchases of property, plant, and equipment were 59.3 million in August 2024, down from 98.6millioninAugust2023[25].FutureOutlook−Thecompanyexpectstotalnetsalesgrowthofabout198.6 million in August 2023[25]. Future Outlook - The company expects total net sales growth of about 1% for fiscal 2024, with adjusted diluted EPS guidance revised to a range of 4.15 to 4.20[4].−Thecompanyremainsoptimisticaboutfiscal2025andbeyond,focusingonagility,productivity,andleveragingitsinnovativeproductportfolio[4].−Thecompanyanticipatesatleast4.20[4]. - The company remains optimistic about fiscal 2025 and beyond, focusing on agility, productivity, and leveraging its innovative product portfolio[4]. - The company anticipates at least 100 million in annualized run rate savings by fiscal 2027 from its multi-year productivity initiative named AMP[3]. - The company anticipates continued demand trends and has provided fiscal 2024 financial guidance, although specific figures were not disclosed in the provided content[16]. Tax and Inventory Management - The effective tax rate for the third quarter was reported at 17.3%, a decrease from 47.6% in the same prior-year period[9]. - The effective tax rate for the nine months ended August 2, 2024, was 17.3%, compared to 47.6% for the same period in 2023[21]. - Significant progress was made in reducing dealer field inventories of lawn care products, with expectations to exit the fiscal year in a better position than last year[3]. Segment Performance - Net sales for the three months ended August 2, 2024, were 1,156.9million,anincreasefrom1,156.9 million, an increase from 1,081.8 million for the same period last year, representing a growth of 6.9%[17]. - Gross profit for the nine months ended August 2, 2024, was 1,200.3million,comparedto1,200.3 million, compared to 1,248.0 million for the same period last year, indicating a decrease of 3.8%[17]. - The gross margin for the three months ended August 2, 2024, improved to 34.8% from 34.4% in the same period last year[17]. - The Professional segment net sales for the three months ended August 2, 2024, were 880.9million,adecreaseof1.6880.9 million, a decrease of 1.6% from 896.3 million in the prior year[18]. - The Residential segment net sales increased significantly to 267.5millionforthethreemonthsendedAugust2,2024,comparedto267.5 million for the three months ended August 2, 2024, compared to 175.3 million for the same period last year, reflecting a growth of 52.6%[18]. Impairment and Charges - Non-cash impairment charges recorded in the third quarter of fiscal 2023 amounted to $151.3 million, impacting the operating segment related to the Intimidator Group[22]. - The company launched the "Amplifying Maximum Productivity" (AMP) initiative in the first quarter of fiscal 2024, which includes significant third-party consulting costs and other related expenses[22].