Q2 2024 Toro Co Earnings Call Transcript
Key Points
- The Toro Co (TTC) delivered record net sales of $1.35 billion for the second quarter, driven by a 26% growth in the residential segment.
- Strong demand in the underground and specialty construction and golf and grounds businesses has kept order backlogs elevated.
- The company successfully reduced dealer field inventories of lawn care equipment in both professional and residential segments.
- New product introductions, such as the Toro TimeCutter and Titan zero-turn mowers, have been well received and are driving market share gains.
- The Toro Co (TTC) is on track to achieve $100 million in annualized savings by fiscal 2027 from its multiyear productivity initiative, AMP (Amplifying Maximum Productivity).
- Adjusted diluted earnings per share decreased to $1.40 from last year's $1.58, primarily due to segment and product mix.
- Professional segment net sales decreased by 5.9% year-over-year, driven by lower shipments of zero-turn mowers.
- Reported and adjusted gross margins both decreased to 33.6% from 35.8% last year, due to unfavorable segment mix and higher material and manufacturing costs.
- SG&A expenses as a percentage of net sales increased slightly to 19.7% from 19.5% last year, driven by higher corporate expenses.
- Inventory levels for snow and ice management products remain higher than ideal due to lower-than-expected snowfall last winter.
Good day, ladies and gentlemen, and welcome to the Toro Company's second quarter earnings conference call. My name is Carmen, and I will be your coordinator for today. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.
I would now like to turn the presentation over to your host for today's conference, Julie Kerekes, a Senior Managing Director of Global Tax and Investor Relations. Please proceed, Ms. Kerekes.
Thank you, and good morning, everyone. Our earnings release was issued this morning, and a copy can be found in the Investor information section of our corporate website, thetorocompany.com. We have also posted a second quarter earnings presentation to supplement our earnings release.
On our call today are Rick Olson, Chairman and Chief Executive Officer; Angie Drake, Vice President and Chief Financial Officer; and Jeremy Steven, Director, Investor Relations.
During this call, we will make forward
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