The Toro Company, a global provider of solutions for the outdoor environment, today reported results for its fiscal fourth-quarter and full-year ended October 31, 2024.
“We delivered our 15th consecutive year of net sales growth in what remained an extremely dynamic environment,” said Richard M. Olson, chairman and chief executive officer. “This was a testament to the strength of our portfolio and the disciplined execution by our team of talented employees and channel partners.
“In our residential segment, we drove exceptional top-line growth due to the strength of our mass channel, including the inaugural year of our strategic partnership with Lowe’s, along with the success of new product introductions, such as the Havoc™ editions of our next generation lineup of Toro® TimeCutter® and TITAN® zero turn riding mowers. In our professional segment, our team drove significant production improvements for underground construction equipment and golf and grounds solutions, as we substantially increased output and capitalized on the sustained and strong end market demand for these products. Our ability to execute in these areas offset industry-wide dynamics affecting other parts of our portfolio, including softness in markets tied to snow and ice management, given the historic lack of snowfall last winter, as well as homeowner markets tied to lawn care in our dealer channel. Importantly, we made significant progress in reducing dealer field inventories of lawn care products, driven by lower shipments, coupled with retail sales growth. The momentum in sell-through year over year demonstrates the strength of our brands and market share.
“Moving to profitability, we successfully drove productivity and net price benefits during the year, offsetting inflation and the costs of adjusting production to meet quickly changing demand and better serve our customers. In the fourth quarter, we enhanced productivity and carefully controlled expenses. This helped offset the impact of a higher proportion of lower-margin products in our net sales than we anticipated, and enabled us to achieve adjusted diluted EPS in line with our expectations.
”We were extremely pleased to deliver a substantial increase in *free cash flow during fiscal 2024, to just over $470 million, which equated to a *conversion rate of 112.4%. This significant improvement supported the return of nearly $400 million to shareholders, including an increase in our regular dividend payout and about $250 million in share repurchases.”
Outlook
“As we enter the new fiscal year, we have confidence in our ability to deliver earnings growth, supported by the strength of our diverse portfolio and talented team, along with the momentum we have generated with our significant productivity initiative,” continued Olson. “Our market leadership positions across our portfolio remain strong, supported by our innovative product lineup and best-in-class distribution networks. For our underground construction, and golf and grounds businesses, we continue to have elevated order backlog, and expect demand will remain robust. Importantly, with our success in driving output, we expect order backlog will be at or near normal levels by the end of the year. For our lawn care and snow and ice management businesses, while field inventories remain higher than ideal, we expect to be positioned much better than last year as we head into the upcoming turf season, along with the snow pre-season in the second half of 2025.
“While industry-wide macro and weather dynamics over the past few years have played out differently than anticipated, our business fundamentals remain strong. This is supported by our innovation leadership, with a robust new product pipeline aligned to market trends and designed to solve our customers’ most pressing needs. We are excited about the upcoming retail launches of autonomous products across our portfolio, including residential, commercial, and golf applications. This includes the early 2025 rollout of our Toro® Haven™ robotic mower, Exmark® Turf Tracer® with XiQ technology, and GeoLink® Solutions™ autonomous fairway mower.
“We are well-positioned to capitalize on future growth opportunities in our attractive end markets, while simultaneously driving profitability improvement. Our significant productivity initiative, named AMP, is off to a great start, and we remain on track to deliver $100 million in run-rate cost savings by fiscal 2027. We intend to reinvest a portion of the savings from this initiative, to drive further innovation and growth. We look forward to the coming year with optimism, guided by our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people.”
For fiscal 2025, management expects total company net sales growth in the range of 0% to 1% and *adjusted diluted EPS in the range of $4.25 to $4.40. The company's guidance is based on current visibility and reflects:
- Continued strong demand and stable supply for our underground construction and golf and grounds businesses,
- A continuation of macro factors that have driven increased consumer and channel caution,
- Remaining adjustments needed to normalize field inventories of lawn care products and snow and ice management solutions, and
- Weather patterns aligned with historical averages.
- This guidance does not include any policy or regulatory changes that have not yet been enacted.
To view The Toro Company's full Q4 Results, click here.
