The Toro Company has reported results for the second quarter of its fiscal year 2025, ended May 2, reporting the following highlights by professional segment growth and profitability improvement for the global outdoor power equipment (OPE) manufacturer.

  • Second-quarter net sales of $1.32 billion, down slightly from the same period of fiscal 2024
  • Second-quarter reported diluted EPS of $1.37, compared to $1.38 in the same period of fiscal 2024
  • Second-quarter *adjusted diluted EPS of $1.42, up from $1.40 in the same period of fiscal 2024
“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 in a June 5 statement. “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.”

Toro Co. Strategizes Ahead of Near-Term Headwinds

"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.

Second Quarter 2025 Segment Results

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 for the second quarter were $202.1 million, up from $190.7 million in the same period last year, and when expressed as a percentage of net sales, 19.9%, up from 19.0% in the prior-year period. The increase in profitability was 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, and when expressed as a percentage of net sales, 5.4%, down from 10.8% in the prior-year period. 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.

Operating Results Toro Q2 2025

Gross margin and *adjusted gross margin for the second quarter were 33.1% and 33.4%, respectively, down from 33.6% for both in the same prior-year period. The change in gross margin was primarily due to higher material and manufacturing costs and inventory valuation adjustments, partially offset by product mix and productivity improvements.

SG&A expense as a percentage of net sales for the second quarter was 19.8%, compared with 19.7% in the prior-year period, primarily driven by lower net sales volume.

Operating earnings as a percentage of net sales were 13.3% for the second quarter, compared with 13.9% in the same prior-year period. *Adjusted operating earnings as a percentage of net sales for the second quarter were 13.7%, compared with 14.2% in the same prior-year period.

Interest expense was $15.8 million for the second quarter, down $0.9 million from the same prior-year period. This decrease was primarily due to lower average interest rates.

The reported effective tax rate for the second quarter was 18.9%, compared with 19.2% in the same prior-year period, primarily due to a more favorable geographic mix of earnings, partially offset by lower tax benefits recorded as excess tax deductions for stock-based compensation. The *adjusted effective tax rate for the second quarter was 18.7% compared with 19.8% in the same prior-year period, primarily due to a more favorable geographic mix of earnings.

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