Toro Reports Q1 ’24 Financials

On March 7, 2024, Toro reported its Q1 2024 financials, citing sales of $1,001.9, that’s 13 percent below Q1 2023 when Toro reported $ 1,148.8. Toro’s Q1 ended Feb. 2, 2024.

Professional Segment

Toro reported net sales to the Professional segment for the first quarter were $756.5 million, down 14.1% from $880.7 million in the same period last year. The decrease, said the company, was primarily driven by lower shipments of zero-turn mowers, and snow and ice management products, partially offset by higher shipments of underground and specialty construction products, and golf and grounds equipment.

Residential Segment

For the residential segment, Toro reported net sales for the first quarter at $240.1 million, down 9.3% from $264.6 million in the same period last year. Toro attributed the decrease to lower shipments of snow products and zero-turn mowers, partially offset by higher shipments of walk-power mowers and portable power products.

“The first quarter aligned with our expectations, as we drove exceptional top-line growth for our underground and specialty construction, and golf and grounds businesses,” said Richard M. Olson, chairman and chief executive officer, in a prepared statement. “This performance was the result of continued strong demand for these products and the strategic actions we’ve taken to increase output with more stable supply. The strength in these areas was offset by lower shipments of zero-turn mowers, as expected, given elevated field inventories heading into the fiscal year, and lower shipments of snow and ice management products due to below-average snowfall activity. At the same time, our team drove productivity gains that offset higher material costs, operating with resiliency and agility as we continued to align costs and production to demand trends.”

Confident Outlook

“We anticipate homeowner markets will begin stabilizing this spring,” said Olson, “following last year’s combination of macro factors and weather patterns that resulted in elevated field inventories of lawn care products. We expect incremental growth from our expanded mass retailer channel will help offset this dynamic. We also expect benefits from the sustained demand in our underground and specialty construction, and golf and grounds businesses. With this demand, order backlog for these businesses remains elevated, and we intend to continue flexing production within our existing facilities to improve lead times and better serve our customers.”

“Our commitment to delivering superior innovation and customer care continues to drive our market leadership, supported by our strong balance sheet, disciplined capital allocation, and outstanding team of employees and channel partners. We are prioritizing investments in advanced technologies and solutions that we expect will drive long-term profitable growth and value for all stakeholders. For example, we are leveraging our proprietary Hypercell smart battery system to accelerate the development of high-powered sustainable solutions for professional segment markets, such as our new Groundsmaster e3200 out-front rotary mower.

For fiscal 2024, the company continues to expect low-single-digit total company net sales growth. This guidance is based on current visibility and assumes continued strong demand and more stable supply for businesses with elevated order backlog, a 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 year-to-date, assumes weather patterns aligned with historical averages for the remainder of the year, and includes the expected incremental impact of an expanded residential segment mass channel.

Investors, meanwhile, have responded with lower interest in Toro stock. The company’s stock price dropped nearly 10 percent following the March 7 financial report. And while Toro seems to be putting strong weight on the outlook of its “expanded residential segment mass channel” – that means Lowe’s stocking of Toro product – even Lowe’s said it expects 2024 sales to be down 2 to 3 percent compared to prior year.