The Toro Co (TTC, Financial) released its 8-K filing on December 18, 2024, reporting its financial results for the fourth quarter and full fiscal year 2024. The company, known for manufacturing turf maintenance and landscaping equipment, achieved record full-year net sales driven by its residential segment, underground construction, and golf products.
Performance Overview
The Toro Co reported fourth-quarter net sales of $1.08 billion, a 9% increase from $0.98 billion in the same period of fiscal 2023. However, the reported diluted EPS of $0.87 fell short of the analyst estimate of $0.96. The adjusted diluted EPS of $0.95 was closer to expectations. For the full year, net sales reached $4.58 billion, slightly above the previous year's $4.55 billion, with a reported diluted EPS of $4.01 and an adjusted diluted EPS of $4.17, compared to $4.11 estimated by analysts.
Key Financial Achievements
The Toro Co's full-year net earnings increased by 27% to $418.9 million, highlighting the company's ability to drive profitability despite industry challenges. The company's free cash flow improved significantly to over $470 million, supporting increased share repurchases and dividend payouts. This financial strength is crucial for a company in the industrial products sector, where capital investment and shareholder returns are key performance indicators.
Segment Performance
The Professional segment, which generates a substantial part of The Toro Co's revenue, saw a 10.3% increase in fourth-quarter net sales to $913.9 million, driven by higher shipments of golf and grounds products and underground construction equipment. However, full-year sales in this segment decreased by 3.2% due to lower shipments of lawn care equipment and snow and ice management products.
In contrast, the Residential segment experienced a 4.5% increase in fourth-quarter net sales to $155.1 million, with full-year sales up 16.9% to $998.3 million. This growth was primarily due to higher shipments to the mass channel, including a strategic partnership with Lowe's.
Financial Metrics and Analysis
Gross margin for the fourth quarter was 32.4%, down from 33.5% in the prior year, primarily due to higher material and manufacturing costs. Operating earnings as a percentage of net sales improved to 10.1% from 9.6% in the same period last year, reflecting productivity improvements and expense control.
We delivered our 15th consecutive year of net sales growth in what remained an extremely dynamic environment," said Richard M. Olson, chairman and chief executive officer. "This was a testament to the strength of our portfolio and the disciplined execution by our team of talented employees and channel partners."
Conclusion
The Toro Co's fiscal 2024 results demonstrate resilience and strategic execution in a challenging market environment. While the company faced headwinds in snow and ice management, its strong performance in residential and professional segments, coupled with significant cash generation, positions it well for future growth. Investors will be keen to see how The Toro Co capitalizes on its strategic initiatives and manages ongoing industry dynamics in the coming fiscal year.
Explore the complete 8-K earnings release (here) from The Toro Co for further details.
