The Toro pany(TTC)2025-06-05 12:33Financial Performance - Second-quarter net sales were 1.35 billion in the same period of fiscal 2024[3]. - Reported diluted EPS for the second quarter was 1.38 in the same period of fiscal 2024, while adjusted diluted EPS increased to 1.40[3]. - Professional segment net sales increased by 0.8% to 297.4 million, primarily due to lower shipments of walk power mowers and zero-turn mowers[14]. - Net sales for the three months ended May 2, 2025, were 1,349.0 million for the same period in 2024[25]. - Operating earnings for the three months ended May 2, 2025, were 187.6 million in the same period last year[25]. - Net earnings for the six months ended May 2, 2025, were 209.7 million for the same period in 2024, reflecting a decrease of 9.6%[25]. - Adjusted net earnings for the six months ended May 2, 2025, were 213.8 million for the same period in 2024, with adjusted net earnings per diluted share at 2.04[33]. - Net earnings for the three months ended May 2, 2025, were 144.8 million for the same period in 2024, with net earnings per diluted share at 1.38[33]. Guidance and Expectations - The company expects total net sales for fiscal 2025 to be flat to down 3%, with adjusted diluted EPS guidance in the range of 4.30[4]. - The company is taking strategic steps to navigate near-term headwinds while maintaining confidence in managing controllable factors and mitigating macroeconomic risks[4]. Margins and Costs - Gross margin for the second quarter was 33.1%, down from 33.6% in the same prior-year period, attributed to higher material and manufacturing costs[9]. - Operating earnings as a percentage of net sales were 13.3%, compared to 13.9% in the same prior-year period[10]. - Gross profit for the six months ended May 2, 2025, was 797.5 million in the prior year, resulting in a gross margin of 33.4% compared to 33.9%[25]. - Gross profit for the three months ended May 2, 2025, was 453.0 million for the same period in 2024, resulting in a gross margin of 33.1% compared to 33.6%[33]. - The company reported a gross margin of 33.4% for the six months ended May 2, 2025, compared to 33.9% for the same period in 2024[33]. Debt and Cash Flow - Interest expense decreased to 0.9 million from the same prior-year period due to lower average interest rates[11]. - Cash and cash equivalents decreased to 188.8 million a year earlier[31]. - The company reported a net cash provided by operating activities of 135.1 million in the prior year[31]. - Long-term debt, less current portion, increased to 1,003.3 million a year earlier[29]. - Free cash flow for the six months ended May 2, 2025, was 95.6 million for the same period in 2024, resulting in a free cash flow conversion percentage of 44.7% compared to 45.6%[35]. Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth[27]. - The company launched the "Amplifying Maximum Productivity" (AMP) initiative in the first quarter of fiscal 2024, which includes expenses not representative of ongoing business operations[36]. - The productivity initiative charges primarily represent severance and termination benefits, facility exit costs, and third-party consulting costs[36]. Taxation - The effective tax rate for the second quarter was 18.9%, compared to 19.2% in the same prior-year period, reflecting a more favorable geographic mix of earnings[12]. - Income tax provision for the three months ended May 2, 2025, was 34.4 million for the same period in 2024, with an effective tax rate of 18.9%[33].