The Toro pany(TTC) - 2026 Q1 - Quarterly Results

Financial Performance - First-quarter net sales increased by 4% year-over-year to $1.04 billion[3] - Reported EPS for the first quarter was $0.69, while adjusted EPS rose 14% year-over-year to $0.74[3] - Full-year net sales growth guidance raised to a range of 3% to 6.5%, up from 2% to 5%[5] - Adjusted EPS guidance for the full year increased to a range of $4.40 to $4.60, up from $4.35 to $4.50[5] - Net sales for the three months ended January 30, 2026, increased to $1,036.3 million, up from $995.0 million in the same period last year, representing a growth of 4.3%[25] - Net earnings for the quarter were $67.9 million, an increase from $52.8 million year-over-year, resulting in a basic and diluted net earnings per share of $0.69, up from $0.52[25] Segment Performance - Professional segment net sales for the first quarter were $824.0 million, up 7.2% from $768.8 million in the prior year[14] - Residential segment net sales for the first quarter decreased by 6.8% to $206.0 million, primarily due to lower shipments of lawn care products[14] - Professional segment net sales increased to $824.0 million, while residential segment sales decreased to $206.0 million[27] - Total segment earnings before interest and taxes improved to $101.1 million, compared to $81.1 million in the prior year[27] Shareholder Returns - The company returned $133 million to shareholders during the first quarter[3] Cost and Margin Analysis - Gross margin for the first quarter was 32.5%, down from 33.7% in the prior-year period, primarily due to higher material and manufacturing costs[9] - SG&A expense as a percentage of net sales improved to 24.1%, compared to 25.9% in the prior-year period[10] - Gross profit remained stable at $336.5 million, with a gross margin of 32.5%, down from 33.7% in the prior year[25] Cash Flow and Assets - Cash and cash equivalents at the end of the period were $189.0 million, a decrease from $341.0 million at the beginning of the fiscal period[31] - Free cash flow for the quarter was $14.6 million, with a free cash flow conversion percentage of 21.5%[34] - The company reported an increase in goodwill to $592.1 million, up from $449.8 million year-over-year[29] - Total assets increased slightly to $3,702.5 million from $3,696.7 million in the previous year[29] Acquisitions and Initiatives - The Tornado acquisition is expected to contribute approximately 2% to total company net sales and be modestly accretive to adjusted EPS[6] - The company completed the acquisition of Tornado Infrastructure Equipment on December 8, 2025, with related costs impacting the financials for the three-month period ending January 30, 2026[35] - The "Amplifying Maximum Productivity" (AMP) initiative was launched in Q1 fiscal 2024, with associated expenses deemed non-recurring and not representative of ongoing operations[35] Employee Compensation and Charges - Productivity initiative charges for the three-month periods ended January 30, 2026, and January 31, 2025, included facility exit-related costs, severance benefits, and third-party consulting costs[35] - Employee stock-based compensation can significantly impact net earnings and effective tax rate, with excess tax deductions recorded during the three-month periods ended January 30, 2026, and January 31, 2025[35]