The Toro pany(US:TTC)2024-09-05 12:58Financial Performance - Third-quarter net sales reached $1.16 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, up from $(0.14) in the same period last year, while adjusted diluted EPS was $1.18, a 24.2% increase from $0.95[1][5]. - The professional segment net sales were $880.9 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 $267.5 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 $19.1 million in the same period last year[17]. - Net earnings for the nine months ended August 2, 2024, were $329.0 million, compared to $259.4 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 $369.4 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 $154.7 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 $119.2 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 $82.4 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 $56.1 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 $98.6 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]. - 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 $1,156.9 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 $1,200.3 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 $880.9 million, a decrease of 1.6% from $896.3 million in the prior year[18]. - The Residential segment net sales increased significantly to $267.5 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].