Toro Reports Q4 and Fiscal ’23 Financials

In a news release detailing financial results, Toro reported year-over-year gains despite a “reduction in homeowner demand.”

“We delivered full-year net sales and adjusted diluted earnings per share growth for fiscal 2023 in an exceptionally dynamic environment, a testament to the strength of our portfolio and our talented team of employees and channel partners,” said Richard M. Olson, chairman and chief executive officer. “Demand for our innovative products was robust across much of our professional segment this year, with notable strength in our underground and specialty construction, and golf and grounds businesses. This strength offset the sharp year-over-year reduction in homeowner demand and acceleration of channel destocking for residential and professional segment lawn care solutions, which was driven by a combination of weather and macro factors.

• Full-year net sales of $4.55 billion, compared to $4.51 billion in fiscal 2022
• Fourth-quarter net sales of $0.98 billion, compared to $1.17 billion in the same period of fiscal 2022

Toro’s Outlook

“Our market leadership and strong business fundamentals give us confidence in our ability to capitalize on both near- and long-term growth opportunities, including the current exceptional demand in key professional markets, and the eventual rebound expected from homeowner markets,” continued Olson. “As we enter the new fiscal year, we expect to benefit from the strength of our portfolio, a more stable supply chain and our new strategic partnership with Lowe’s. For our underground and specialty construction, and golf and grounds businesses, we expect a more reliable supply of components will support increased, flexible production capacity within our existing manufacturing footprint. With this, we intend to improve lead times to better serve our customers and reduce the substantial order backlog that has resulted from the sustained strength in demand for these products. Additionally, we expect incremental growth from our expanded mass channel will help offset headwinds from elevated field inventory levels of residential and professional snow and lawn care solutions.

Olson went on to tout the manufacturer’s innovative history, including new products in construction, plus expansions of utility vehicle product lines and people mover vehicles.

“Our focus on innovation and productivity extends to our operations, demonstrated by our proven track record of strategically managing the business to deliver consistent, positive financial results. This focus aligns with our recent launch of a transformational productivity initiative we have named AMP, which stands for ‘Amplifying Maximum Productivity.’ We expect this multi-year initiative to result in annualized cost savings of more than $100 million by fiscal 2027, driven by sustainable supply-base, design-to-value, and route-to-market transformation. We intend to reinvest a portion of the savings from this initiative, to drive further innovation and growth. We look forward to the coming year with confidence and optimism, guided by our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people.”

For fiscal 2024, management expects low-single-digit total company net sales growth and *adjusted diluted EPS1 in the range of $4.25 to $4.35. The company’s guidance is based on current visibility and reflects expectations for continued strong demand and more stable supply for businesses with elevated order backlog, the continuation of macro factors that have driven increased consumer and channel caution, and manufacturing inefficiencies as production and inventory levels continue to be adjusted to market conditions. This guidance also considers the below-average snowfall activity fiscal year-to-date, assumes more typical weather patterns for the upcoming spring and summer seasons, and includes the expected incremental impact of an expanded residential segment mass channel.