Toro Company Reports Decline in Net Sales and Earnings for Q1 Fiscal 2025

The Toro Company reported its financial results for the first quarter of fiscal 2025, revealing a slight decline in net sales and net earnings compared to the same period last year. The company generated net sales of $995.0 million, a decrease of 0.7% from $1,001.9 million in the first quarter of fiscal 2024. The Professional segment saw a 1.6% increase in sales to $768.8 million, while the Residential segment experienced an 8.0% decline, bringing in $221.0 million. Net earnings for the quarter were $52.8 million, or $0.52 per diluted share, down from $64.9 million, or $0.62 per diluted share, in the prior year.

The decrease in overall sales was attributed primarily to lower shipments in the Residential segment and the divestiture of the Pope Products garden watering and irrigation business in the previous year. However, international sales increased by $6.4 million, driven by higher shipments of Professional segment products, despite a $4.1 million negative impact from foreign currency exchange rates. The company's gross profit also fell to $335.6 million, down 2.6% from $344.5 million, resulting in a gross margin of 33.7%, compared to 34.4% in the same quarter last year.

In terms of operational developments, Toro's order backlog increased due to seasonal trends for lawn care products, although manufacturing output and lead times for certain products have improved. The company reported higher field inventory levels, particularly in golf and grounds, underground construction, and lawn care products. The AMP initiative, aimed at achieving annualized cost savings of over $100 million by fiscal 2027, has already delivered cumulative savings of $10.7 million as of the first quarter of fiscal 2025.

The company also returned $138.5 million to shareholders through dividends and stock repurchases during the quarter. The cash dividend was increased by 5.6% to $0.38 per share. Toro's liquidity position remains strong, with $884.1 million available, including $171.3 million in cash and cash equivalents. The company expects to continue its quarterly cash dividends and stock repurchase program throughout the fiscal year, depending on market conditions and operational needs.

Looking ahead, Toro anticipates that ongoing economic conditions, including inflation and supply chain disruptions, may impact its performance. The company remains focused on leveraging its productivity initiatives and enhancing its product offerings to drive growth. Despite the challenges, Toro's management is optimistic about the potential for improved operational efficiency and market expansion in the coming quarters.