Toro Stock Drops Amid Disappointing Q3 Results and Revised Outlook
Toro Company experiences a decline in stock value after missing third-quarter earnings and sales expectations due to reduced consumer and business spending on lawn care products.
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Highlights
- Toro Company fell short of third-quarter earnings and revenue projections as both residential and commercial customers scaled back purchases.
- The manufacturer of lawn mowers and snowblowers lowered its full-year profit and sales forecasts.
- CEO Richard Olson attributed the results to challenging macroeconomic conditions.
Shares of Toro Company (TTC) declined sharply after the company reported third-quarter fiscal 2024 earnings per share (EPS) of $1.14 and revenue of $1.16 billion, missing analyst consensus estimates. CEO Richard Olson described the market environment as "highly dynamic," impacting demand for Toro’s products.
The Professional segment saw a 1.7% decrease in sales to $880.9 million, primarily due to reduced shipments of snow and ice management equipment, lawn care machinery, and compact utility loaders. Conversely, the Residential division’s sales surged 52.6% to $267.5 million, driven by increased shipments through mass retail channels.
Heightened Customer Caution Affects Demand
Olson noted that as summer progressed, both homeowners and lawn care dealers exhibited increased caution amid macroeconomic pressures, leading to lower-than-anticipated shipments in both residential and professional lawn care products.
Consequently, Toro adjusted its full-year net sales growth forecast to approximately 1%, down from the previous low-single-digit growth expectation. The company now anticipates adjusted EPS between $4.15 and $4.20, revised downward from $4.25 to $4.35, falling short of analysts’ projections.
Following the announcement, Toro’s stock price dropped 10% to $81.78 during late-morning trading and has declined roughly 15% year-to-date.
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