Toro Co

Latest Results (15.11.2025):

Toro Co reported its Q3 2025 financial results, demonstrating a mixed performance with key strengths in adjusted diluted EPS and professional segment sales, tempered by notable declines in GAAP earnings and residential segment volumes. The report highlights that despite challenging macro factors and tariff headwinds, the company made significant cost reductions, repurchased $90 million of common stock, and updated its full-year guidance to an adjusted diluted EPS of about $4.15 for fiscal 2025.

Earnings & Margins

In Q3 2025, while GAAP measures such as diluted EPS and operating earnings saw declines (with diluted EPS falling from $1.14 to $0.54 and operating earnings dropping from $148.1 million to $64.8 million), the adjusted diluted EPS exceeded expectations at $1.24 compared to $1.18 in Q3 2024. Gross margins also experienced a slight contraction.

Segment Performance

Toro Co’s Professional segment delivered improved results with a 5.7% increase in net sales and an earnings margin boost to 21.3%, benefiting from higher shipments and productivity improvements. In contrast, the Residential segment faced significant pressure, with net sales declining by 27.9% and earnings margins dropping to 1.9% due to softer homeowner demand and higher manufacturing costs.

Cost Efficiency & Strategic Initiatives

The company’s deliberate actions to improve operational efficiency resulted in meaningful cost reductions, including a $4 million run-rate savings in Q3 and progress toward its AMP initiative, which is expected to deliver at least $100 million in incremental annualized cost savings by fiscal 2027. Additionally, strategic repurchases and disciplined capital allocation reinforced its commitment to returning value to shareholders.

Guidance & Tariff Mitigation

Toro Co updated its full-year fiscal 2025 outlook with an adjusted diluted EPS guidance of approximately $4.15 amid continued macroeconomic caution. The company also revised its estimates on tariff headwinds, now expecting a reduced impact of about $70 million for fiscal 2025, positioning it well to mitigate challenges arising from global trade conditions.