Toro Q1: Pro up, Residential down

On March 6, Toro reported financial results for its first quarter of 2025, showing net sales of $995 million, a 0.7% decrease compared to Q1 2024. The company said this was primarily driven by lower shipments of compact utility loaders, snow products and portable power products, and the prior year Pope Products divestiture, partially offset by increased shipments of golf and grounds products and lawn care equipment.

Toro reported its gross margin was off 30 basis points (compared to the year prior) and that decrease, it said, was largely due to higher material and manufacturing costs, partially offset by productivity improvements. But with lower marketing costs and gains in productivity, Toro reported a rise in adjusted operating margin; these gains were partially offset by higher material, manufacturing, and freight costs.

Results by segment

Toro reported net sales in its professional segment increased 1.6% to $768.8 million, against the same period last year. The growth came from higher shipments of golf and grounds products and zero turn mowers, along with net price realization, partially offset by lower shipments of compact utility loaders.

In the residential segment, Toro reported net sales of $221 million, a drop of 8% compared to Q1 2024. The reason? Lower shipments of snow products, portable power products, the prior year Pope Products divestiture, plus higher sales promotions and incentives, partially offset by higher shipments of zero turn and walk power mowers.

“Fiscal 2025 is off to a solid start as we exceeded our first-quarter bottom-line expectations, driven by our team’s disciplined execution, the continued momentum of our Amplifying Maximum Productivity initiative, and the improvement of our professional segment earnings margin,” said Richard M. Olson, chairman and chief executive officer. 

“We drove first-quarter net sales growth in the professional segment with increased output for golf and grounds products to address sustained demand and elevated order backlog, while also capitalizing on strong channel orders for our new, innovative lineup of zero turn mowers. Professional segment growth was offset by lower shipments in the residential segment, as expected, due to elevated field inventory levels of snow products heading into the quarter as well as the Pope Products divestiture last year.

Olson boasted about the company’s new robotic products for golf customers, including the Toro Turf Pro autonomous mower and the Range Pro golf ball picking robot. The company announced an exclusive partnership with TerraRad to introduce a first-of-its-kind, data-driven soil moisture sensing and irrigation control technology. This software will recommend and enable real-time sprinkler adjustments to help superintendents enhance turf health, while reducing water consumption and operational cost.”

Outlook

For fiscal 2025, management maintains expectations for total company net sales growth in the range of 0% to 1% and adjusted diluted EPS in the range of $4.25 to $4.40. 

Olson added: 

• Demand trends in our key growth markets remain strong with our golf business 
• We expect dealer field inventories for our lawn care and snow and ice management businesses to be positioned better compared to last year 
• We recognize the heightened level of uncertainty affecting the macro environment, including a decline in consumer confidence and rapidly evolving trade policy. We are prepared to take operational and pricing actions, as appropriate, to position the company for success. 
• Due to the uncertain and rapidly changing tariff environment, this guidance excludes all incremental tariffs introduced year to date, with the exception of the additional tariffs on China imports that came into effect in February.