The Toro Company

What they do

Toro makes professional turf maintenance equipment and services, turf and agricultural irrigation systems, landscaping equipment and lighting, snow and ice management products, rental, specialty and underground construction equipment, and residential yard and snow thrower products. It sells worldwide through distributors, dealers, mass retailers, hardware retailers, equipment rental centers, home centers, and online and direct to end-users. It reports two segments, Professional and Residential, plus insignificant Other activities. Brands include Toro, Ditch Witch, eXmark, Spartan, BOSS, Ventrac, American Augers, Subsite, HammerHead, Radius, Perrot, Hayter, Unique Lighting Systems, Irritrol, and Lawn-Boy.

Revenue drivers

• Professional segment — 80.3 percent of fiscal 2025 consolidated net sales ($3,624.0 million), up 1.9 percent year over year. Includes turf, golf and grounds, irrigation, landscaping, snow and ice, and underground construction products.
• Residential segment — 19.0 percent of fiscal 2025 consolidated net sales ($858.4 million), down 14.0 percent year over year. Includes residential yard and snow thrower products such as walk power mowers.
• Underground construction — Part of the Professional segment, sold under Ditch Witch and HammerHead, and expanded by the December 2025 acquisition of Tornado Infrastructure Equipment, a hydrovac excavation manufacturer bought for $279.3 million Canadian dollars.
• Other — 0.7 percent of fiscal 2025 consolidated net sales, comprising a wholly-owned domestic distribution company, certain corporate activities, and elimination of intersegment revenues and expenses.

Recent performance

Fiscal 2025 net sales were $4,510.4 million, down 1.6 percent from $4,583.8 million, with Professional up 1.9 percent and Residential down 14.0 percent. Fiscal 2025 net earnings were $316.1 million, or $3.17 per diluted share, versus $418.9 million, or $4.01, in fiscal 2024; adjusted net earnings were $419.6 million, or $4.20 per diluted share. Gross margin was 33.4 percent, down 40 basis points, while adjusted gross margin was 34.1 percent, up 20 basis points. In the quarter ended July 31, 2026, net sales rose 8.4 percent to $1,225.8 million, reported diluted EPS rose 50.0 percent to $0.81, and adjusted EPS rose 7.3 percent to $1.33. Professional segment net sales in that quarter were $1,012.6 million, up 8.8 percent, and Residential segment net sales were $209.3 million, up 8.6 percent.

Strategy

Toro states three enterprise strategic priorities: accelerating profitable growth, driving productivity and operational excellence, and empowering its people. It emphasizes innovation in alternative power, smart connected, and autonomous solutions, funded through continued research, development, and engineering, and notes a significant portion of net sales historically comes from products introduced in the current and previous two fiscal years. It pursues targeted acquisitions that complement existing brands or technologies, illustrated by the December 2025 Tornado Infrastructure Equipment acquisition, funded with revolving credit facility borrowings. It also cites disciplined portfolio management and prudent capital allocation, including disposition of non-core product lines. It returned $441.1 million of cash to shareholders in fiscal 2025 through quarterly dividends and share repurchases, and raised the fiscal 2025 quarterly dividend 5.6 percent to $0.38 per share.

Risks

• Economic conditions and demand — Toro states its net sales and earnings have been and will likely continue to be adversely affected by economic conditions and outlook in the locations where it does business.
• Weather and climate variability — Weather conditions, including conditions exacerbated by global climate change, have previously impacted and may continue to impact demand for some of Toro's products and disrupt operations.
• Input cost and supply disruption — Disruption or shortages of commodities, components, parts, or accessories have adversely affected and could continue to adversely affect the business, and increases in their cost have pressured profit margins.
• Channel inventory and concentration — Toro's results depend on itself and its channel customers maintaining appropriate inventory levels, and it depends on channel customers such as distributors, dealers, and mass retailers.

Outlook

Management raised full-year fiscal 2026 guidance and now expects total company net sales growth of 6.3 to 6.6 percent, up from a prior range of 4.0 to 6.5 percent, and adjusted EPS of $4.60 to $4.65, up from $4.50 to $4.62. The CEO cited healthy end markets, strong customer response to new products, disciplined execution, productivity-driven margin expansion, and effective inventory management as support for the raise. Toro said it expects order backlog to normalize by mid-fiscal 2026 given improved manufacturing output and lower lead times, after backlog fell $0.4 billion to $0.8 billion at October 31, 2025 from $1.2 billion a year earlier.