Toro moves the needle in Q2
The Toro Company logged a modest 1.2% net sales increase in the second quarter ended April 29, with strong progress occurring in its landscape contractor and golf products segments.
Net sales came in at $836.4 million for the quarter, with net earnings of $105.7 million up from $93.8 million in the comparable fiscal 2015 period.
For the first six months of 2016, Toro reported net earnings of $144.9 million on a net sales increase of 1.7% to $1.32 billion. That's compared to net earnings of $124.7 million on net sales of $1.30 billion in the year-ago period.
“We were pleased by the strong sales in our professional segment, particularly for our landscape contractor and golf products at the start of our key selling season,” said Michael Hoffman, Toro’s chairman and chief executive officer. “Similarly, we are encouraged by the positive momentum we are seeing from our specialty construction business as we continue to strengthen our position in the industry. We are experiencing strong demand for our new Dingo TX 1000 compact utility loader, which has been well received by landscape contractors and rental houses alike.”
“On the residential side of the business, warmer spring weather early in the quarter was offset by poor weather in the later part of the quarter, which negatively impacted sales,” said Hoffman. “Our second quarter results were also negatively impacted by lower sales of residential riding products due to channel demand pulled forward in the first quarter driven by supply issues last year. We have higher inventory levels of riding mowers than normal because we wanted to ensure we were a better supplier to our customers this year, in light of the prior year manufacturing and availability issues.”
“Now, in the midst of our key selling season for spring and summer products, we are encouraged by solid retail demand across our businesses and the strong margin improvement in both segments. However, we acknowledge that the mild winter conditions we experienced earlier this fiscal year resulted in higher inventory levels at both the company and in the field. This along with expected softer preseason retail demand for snow products will present a headwind in the second half for shipments of our residential snow and BOSS professional snow and ice management equipment. Going forward, we will increase our efforts on those things within our control, including reducing inventory levels for the second half of the fiscal year.”
Fiscal guidance for 2016 has been revised to include revenue growth that's flat to 2%, and net earnings per share to increase to about $3.90 to $4.00.