Toro Company Reports Decline in Revenue and Net Earnings for Second Quarter of Fiscal 2025

The Toro Company reported its financial results for the second quarter and first six months of fiscal 2025, revealing a decline in both revenue and net earnings compared to the same periods in the previous fiscal year. For the three months ended May 2, 2025, consolidated net sales were $1,317.9 million, a decrease of 2.3% from $1,349.0 million in the prior year. For the first half of the fiscal year, net sales totaled $2,312.9 million, down 1.6% from $2,350.9 million. The company's net earnings for the second quarter were $136.8 million, or $1.37 per diluted share, compared to $144.8 million, or $1.38 per diluted share, in the same quarter last year. Year-to-date net earnings were $189.6 million, or $1.88 per diluted share, down from $209.7 million, or $2.00 per diluted share, in the prior year.

The decline in revenue was primarily attributed to lower shipments in the Residential segment, which saw a significant drop of 11.4% in the second quarter, while the Professional segment experienced a slight increase of 0.8%. The Residential segment's net sales were $297.4 million for the quarter, down from $335.6 million, while Professional segment sales rose to $1,014.1 million from $1,005.6 million. The company noted that international sales also decreased, contributing to the overall decline in revenue.

In terms of operational developments, Toro completed an acquisition of technology assets and a U.S.-based distributor of underground construction equipment during the second quarter, although the financial impact of this acquisition was deemed immaterial. The company has also been focusing on its AMP initiative, aimed at achieving annualized cost savings of over $100 million by fiscal 2027, with cumulative savings of $30 million reported to date. Additionally, Toro has been actively managing its inventory levels, which increased slightly due to higher finished goods balances.

The company's balance sheet as of May 2, 2025, showed total assets of $3,788.1 million, a decrease from $3,852.2 million a year earlier. Cash and cash equivalents stood at $176.5 million, down from $188.8 million. Toro's long-term debt increased to $1,097.1 million from $1,016.8 million, reflecting ongoing investments and financing activities. The company maintained a strong liquidity position with available liquidity of $899.4 million, including cash and credit facilities.

Looking ahead, Toro anticipates continued challenges in the Residential segment due to macroeconomic factors affecting consumer demand. However, the company remains committed to its strategic initiatives and expects to leverage its productivity improvements to enhance operational efficiency. The management expressed confidence in its ability to navigate market conditions and maintain shareholder returns through dividends and stock repurchases, having returned $276.3 million to shareholders in the first half of fiscal 2025.