Toro Company reported fiscal 2025 fourth‑quarter net sales of $1.07 billion, a 0.9% decline from the $1.08 billion recorded in Q4 2024, and full‑year net sales of $4.51 billion, down 1.5% from $4.58 billion in 2024. Adjusted diluted earnings per share rose to $0.91 in the quarter and $4.20 for the year, beating consensus estimates of $0.88 and $4.17, respectively. The earnings beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin Professional equipment, which offset a 14% decline in Residential segment sales.
The Professional segment, which represents roughly 80% of Toro’s revenue, posted a 19.4% earnings margin in the quarter, up from 18.6% in Q4 2024, and a 1.9% increase in full‑year net sales to $3.61 billion. Residential sales fell 14% to $0.90 billion, largely due to reduced demand for consumer‑grade mowers and lawn equipment amid a broader slowdown in discretionary spending. The mix shift to Professional products, combined with effective pricing and lower input costs, enabled the company to maintain profitability even as overall sales slipped.
Toro’s Accelerated Margin Performance (AMP) initiative has accelerated progress, with the company raising its run‑rate savings target to $125 million by fiscal 2027 from the original $100 million. The initiative focuses on supply‑chain optimization, product‑line rationalization, and digital sales tools, and has already delivered $30 million in incremental savings in the first half of fiscal 2025. The savings momentum is expected to support margin expansion in the coming years.
Management guided fiscal 2026 adjusted diluted EPS to $4.35–$4.50, a range below the analyst consensus of $4.63–$4.71. The guidance reflects a cautious outlook for revenue growth, which the company expects to rise 2%–5% in 2026, while maintaining the Professional segment’s margin trajectory. The guidance signals confidence in cost discipline but also signals awareness of macro‑economic headwinds that could temper growth.
Toro also announced the acquisition of Tornado Infrastructure Equipment, a move that is projected to contribute roughly 2% of total sales and modestly accretive to earnings. The acquisition expands Toro’s product portfolio in the infrastructure market and is expected to generate synergies in manufacturing and distribution channels.
Richard M. Olson, Chairman and CEO, said the company delivered “record free cash flow in fiscal 2025, largely due to working‑capital improvements,” and highlighted the company’s “strong balance sheet position and disciplined capital allocation” as key drivers of the year‑end performance.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.