# The Toro Company (TTC) Q3 2025 Financial Results Summary
**Release Date: September 4, 2025**
The Toro Company reported its fiscal 2025 third quarter financial results for the period ending August 1, 2025. Below are the key highlights and metrics from the earnings report:
## Financial Highlights
– **Net Sales**:
– $1.13 billion, a **decrease of 2%** from $1.16 billion in Q3 fiscal 2024.
– Approximately half the decline is attributed to divestitures of non-core assets from the previous year.
– **Net Earnings**:
– Reported net earnings of **$53.5 million**, down **55%** from $119.3 million in the same quarter last year.
– Adjusted net earnings at **$122.5 million**, reflecting a slight **decrease of 1%** compared to $123.7 million in Q3 2024.
– **Diluted Earnings per Share (EPS)**:
– Reported diluted EPS of **$0.54**, down **53%** from $1.14 last year.
– Adjusted diluted EPS increased **5%** to **$1.24** from $1.18.
– **Professional Segment**:
– Net sales increased by **5.7%** to $930.8 million, up from $880.9 million last year.
– Earnings were reported at **$198.5 million**, an increase from $165.7 million, resulting in a profit margin of **21.3%**, up from **18.8%**.
– **Residential Segment**:
– Net sales decreased by **27.9%** to $192.8 million from $267.5 million in Q3 2024.
– Earnings reduced to **$3.7 million**, down from $32.6 million, resulting in a profit margin drop to **1.9%** from **12.2%**.
– **Gross Margin**:
– Gross margin for the quarter was **33.7%**, down from **34.8%** in Q3 2024.
– Adjusted gross margin was **34.4%**, down from **35.4%** year-over-year.
– **Operating Results**:
– Operating earnings as a percentage of net sales was **5.7%**, compared to **12.8%** in the prior-year quarter.
– Adjusted operating earnings margin was stable at **13.6%**, slightly down from **13.7%**.
– **Interest Expense**:
– Interest expense increased to **$15.1 million**, a rise of $0.6 million from the previous year, attributed to higher average outstanding borrowings.
– **Effective Tax Rate**:
– Reported effective tax rate was **7.4%**, down from **17.3%** in Q3 2024, mostly due to the non-cash impairment charge.
## Shareholder Returns
– **Dividends and Share Repurchase**:
– Dividends paid on common stock were **$113.8 million**, compared to **$112.6 million** in the prior year.
– The company completed common stock repurchases amounting to **$290 million** during the quarter.
## Outlook
– Full-year fiscal 2025 guidance remained unchanged, with expected net sales flat to down **3%** and adjusted diluted EPS anticipated to be about **$4.15**.
– The company is implementing strategic actions to bolster resilience and performance, including the AMP program aimed at generating annualized savings of **at least $100 million** by 2027.
## Summary
The Toro Company showcased slight year-over-year improvement in certain segments, but overall faced challenges primarily due to decreased demand in the residential market and impacted by non-core asset divestitures. The professional segment’s growth and operational efficiency measures, including cost reductions, reflect the company’s ongoing efforts to stabilize profitability and enhance shareholder value in a challenging market environment.
| Three Months Ended | Nine Months Ended | |||
|---|---|---|---|---|
| August 1, 2025 | August 2, 2024 | August 1, 2025 | August 2, 2024 | |
| Net sales | $ 1,131.3 | $ 1,156.9 | $ 3,444.2 | $ 3,507.8 |
| Cost of sales | 749.5 | 754.1 | 2,290.1 | 2,307.5 |
| Gross profit | 381.8 | 402.8 | 1,154.1 | 1,200.3 |
| Gross margin | 33.7 % | 34.8 % | 33.5 % | 34.2 % |
| Selling, general and administrative expense | 235.9 | 254.7 | 755.6 | 776.0 |
| Non-cash impairment charge | 81.1 | — | 81.1 | — |
| Operating earnings | 64.8 | 148.1 | 317.4 | 424.3 |
| Interest expense | -15.1 | -14.5 | -45.9 | -47.4 |
| Other income, net | 8.1 | 10.6 | 21.1 | 26.6 |
| Earnings before income taxes | 57.8 | 144.2 | 292.6 | 403.5 |
| Income tax provision | 4.3 | 24.9 | 49.5 | 74.5 |
| Net earnings | $ 53.5 | $ 119.3 | $ 243.1 | $ 329.0 |
| Basic net earnings per share of common stock | $ 0.54 | $ 1.15 | $ 2.43 | $ 3.16 |
| Diluted net earnings per share of common stock | $ 0.54 | $ 1.14 | $ 2.42 | $ 3.14 |
| Weighted-average number of shares of common stock outstanding — Basic | 98.8 | 104.0 | 100.0 | 104.2 |
| Weighted-average number of shares of common stock outstanding — Diluted | 99.0 | 104.5 | 100.3 | 104.8 |
| August 1, 2025 | August 2, 2024 | October 31, 2024 | |
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | $ 201.0 | $ 221.1 | $ 199.5 |
| Receivables, net | 472.7 | 532.3 | 459.7 |
| Inventories, net | 1,036.2 | 1,082.0 | 1,038.9 |
| Prepaid expenses and other current assets | 84.2 | 78.5 | 66.8 |
| Total current assets | 1,794.1 | 1,913.9 | 1,764.9 |
| Property, plant, and equipment, net | 629.1 | 635.7 | 644.8 |
| Goodwill | 450.8 | 450.2 | 450.3 |
| Other intangible assets, net | 398.6 | 512.4 | 498.7 |
| Right-of-use assets | 105.6 | 113.2 | 114.5 |
| Investment in finance affiliate | 41.3 | 46.4 | 49.2 |
| Deferred income taxes | 85.6 | 38.3 | 45.0 |
| Other assets | 14.7 | 21.3 | 15.4 |
| Total assets | $ 3,519.8 | $ 3,731.4 | $ 3,582.8 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
| Current portion of long-term debt | $ 20.0 | $ 25.3 | $ 10.0 |
| Accounts payable | 385.0 | 437.8 | 452.7 |
| Accrued liabilities | 534.3 | 501.6 | 493.0 |
| Short-term lease liabilities | 16.6 | 19.7 | 20.3 |
| Total current liabilities | 955.9 | 984.4 | 976.0 |
| Long-term debt, less current portion | 1,012.2 | 966.6 | 911.8 |
| Long-term lease liabilities | 92.8 | 99.1 | 99.1 |
| Deferred income taxes | 0.6 | 0.4 | 0.5 |
| Other long-term liabilities | 47.2 | 44.5 | 43.5 |
| Stockholders’ equity: | |||
| Preferred stock | — | — | — |
| Common stock | 97.9 | 103.1 | 101.5 |
| Retained earnings | 1,350.7 | 1,576.2 | 1,496.4 |
| Accumulated other comprehensive loss | -37.5 | -42.9 | -46.0 |
| Total stockholders’ equity | 1,411.1 | 1,636.4 | 1,551.9 |
| Total liabilities and stockholders’ equity | $ 3,519.8 | $ 3,731.4 | $ 3,582.8 |
