Toro Company (NYSE: TTC), a prominent global provider of outdoor environment solutions, has released its fiscal first-quarter results ending February 2, 2024.
Richard M. Olson, the chairman and CEO, remarked, “The first quarter met our expectations, showcasing remarkable growth in our underground and specialty construction, and golf and grounds segments. This growth is a testament to both sustained demand for our products and our strategic efforts to enhance production stability. However, we did experience lower shipments of zero-turn mowers due to high field inventories entering the fiscal year and reduced demand for snow and ice management products, attributed to below-average snowfall activity. Nevertheless, our team’s focus on productivity helped mitigate higher material costs, demonstrating resilience and adaptability as we adjust costs and production to market dynamics.”
Looking ahead, Olson expressed confidence in Toro’s ability to achieve growth in fiscal 2024. He highlighted the company’s innovation leadership across diverse markets, strong fundamentals, and its track record of navigating economic cycles and seasonal fluctuations. Olson anticipated stabilization in homeowner markets this spring, following last year’s inventory buildup resulting from various macro factors and weather patterns. He expects growth from expanded mass retailer channels to offset this trend, along with sustained demand in underground and specialty construction, and golf and grounds businesses. Toro aims to optimize production within existing facilities to enhance lead times and customer service, leveraging its order backlog in these sectors.
Olson emphasized Toro’s commitment to innovation and customer satisfaction, backed by a robust balance sheet, disciplined capital allocation, and a skilled workforce. The company plans to invest in advanced technologies, such as the Hypercell™ smart battery system, to develop sustainable solutions for professional markets, exemplified by the new Groundsmaster® e3200 out-front rotary mower. Additionally, Toro is focused on driving operational excellence, targeting over $100 million in annualized cost savings by fiscal 2027 through the AMP initiative.
For fiscal 2024, Toro anticipates low-single-digit total company net sales growth and adjusted diluted EPS in the range of $4.25 to $4.35. This guidance accounts for ongoing strong demand and stable supply in segments with elevated order backlogs, while considering macroeconomic factors influencing consumer caution and manufacturing adjustments. Weather patterns, including below-average snowfall activity year-to-date, are factored into the forecast, assuming alignment with historical averages for the remainder of the fiscal year, alongside the anticipated impact of expanded residential segment mass channels.
