Toro lowers guidance for year due to “anticipated tariff impacts”

On June 5, The Toro Company reported results for its fiscal second quarter ended May 2, 2025. The company reports Q2 net sales of $1.32 billion, a decrease of about 2% compared to the same period last year. Toro made slight gains in the professional segment, which is more than three-quarters of its overall. In the residential segment, Toro suffered a sales decline of more than 10% compared to the same period in 2024. The company also lowered its forecast guidance for the year due to “anticipated tariff impacts.”

Professional Segment

Professional segment net sales for the second quarter were $1,014.1 million, up 0.8% from $1,005.6 million in the same period last year. The increase was primarily driven by higher shipments of golf and grounds products, partially offset by lower shipments of underground and specialty construction products and the prior year construction equipment dealer divestitures.

Professional segment earnings were up nearly 20%, primarily due to product mix and productivity improvements, partially offset by higher material and manufacturing costs.

Residential Segment

Residential segment net sales for the second quarter were $297.4 million, down 11.4% from $335.6 million in the same period last year. The decrease was primarily driven by lower shipments of walk power mowers, zero-turn mowers, and portable power products, as well as the prior year Pope Products divestiture, partially offset by higher shipments of snow products and lower sales promotions and incentives.

Residential segment earnings for the second quarter were $16.1 million, down from $36.1 million in the same period last year; the decrease was largely driven by higher material, manufacturing, and freight costs, lower net sales volume, and inventory valuation adjustments, partially offset by productivity improvements and lower sales promotions and incentives.

“Our second-quarter results demonstrate the resilience and agility of The Toro Company and commitment of our dedicated employees and channel partners to deliver innovative solutions and exceptional service to meet our customers’ needs,” said Richard M. Olson, chairman and chief executive officer. “While top-line growth was pressured in our Residential segment, we drove continued Professional segment momentum, which helped us exceed our expectations for earnings in the quarter. Our progress exemplifies the success of our strategic and operational actions to create long-term value for all stakeholders.”

OUTLOOK

“We are taking decisive steps to strategically position the company to navigate near-term headwinds. Our strong portfolio and disciplined execution continue to sustain our performance, and we remain confident in our ability to manage controllable factors while mitigating macroeconomic risks,” concluded Olson.

For fiscal 2025, management now expects total company net sales to be in the range of flat to down 3% and *adjusted diluted EPS in the range of $4.15 to $4.30.

• This guidance is based on current visibility, inclusive of anticipated tariff impacts, and reflects:
• a reduction in volume from macro factors that have driven increased homeowner and channel caution,
• continued strong demand and stable supply for our underground construction and golf and grounds businesses, and
• weather patterns aligned with historical averages for the remainder of the year.