Earnings Highlights and Review: Toro Reported Record Quarterly Sales; Earnings Jumped 15%

LONDON, UK / ACCESSWIRE / June 19, 2017 / Pro-Trader Daily publishes post-earnings coverage on The Toro Co. (NYSE: TTC) following the Company’s announcement of its second quarter fiscal 2017 financial results on May 25, 2017. The landscaping, maintenance and irrigation equipment maker outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

Toro reported an increase of 4.3% to record net sales of $872.8 million for its fiscal 2017 second quarter ended May 05, 2017, compared to net sales of $836.4 million in Q2 FY16. The Company’s revenue numbers surpassed analysts’ expectations of $848.1 million.

For Q2 FY17, Toro reported gross margin as a percent of sales of 36.2%, which was consistent with Q2 FY16 gross margin of 36.2%. The Company stated that productivity improvements were offset by commodity headwinds and the impacts of segment mix, which contributed to the quarterly results. Toro’s selling, general, and administrative (SG&A) expense as a percent of sales for the reported quarter was 18.0%, reflecting an increase of 30 basis points from the year ago same period, attributed to higher incentive and warranty costs. During Q2 FY17, Toro’s operating earnings as a percent of sales totaled 18.3%, representing a drop of 20 basis points on a y-o-y basis.

Toro reported net earnings of $120.5 million, or $1.08 per share, for Q2 FY17 compared to net earnings of $105.7 million, or $0.94 per share, for Q2 FY16. The Company’s earnings numbers were better than Wall Street’s expectations of $1.03 per share.

Segment Results

During Q2 FY17, Toro’s Professional segment’s net sales totaled $610.9 million, up 2.6% compared to net sales of $595.2 million in Q2 FY16, driven by strong demand for products in the Company’s golf equipment and rental businesses. Professional segment’s earnings for the reported quarter totaled $149.0 million, increasing 5.2% from $141.6 million in the prior year’s same quarter.

Toro’s Residential segment recorded an 8.4% increase in net sales to $258.1 million for Q2 FY17 compared to net sales of $238.2 million in Q2 FY16. Sales increase was primarily due to solid demand for the Company’s walk power mowers in the mass channels and for zero-turn riding mowers in its dealer network. Residential segment’s earnings for the reported quarter were $35.0 million, which remained unchanged compared to the year ago corresponding period.

Balance Sheet

At the end of Q2 FY17, Toro’s accounts receivable totaled $328.5 million, down 0.4% on a y-o-y basis. The Company’s net inventories were $341.6 million, down 7.4% compared to the year ago comparable period, while trade payables were $273.6 million, up 5.0% on a y-o-y basis. At the end of the reported quarter, Toro’s 12-month average net working capital as a percent of sales was 14.4% compared to 16.6% in the year ago same period.

As on May 05, 2017, Toro had cash and cash equivalents worth $265.19 million compared to $174.64 million as on April 29, 2016. At the end of Q2 FY7, the Company’s long-term debt excluding current portion was $311.96 million compared to $334.82 million at the end of the year ago same quarter.

Stock Performance

At the closing bell, on Friday, June 16, 2017, Toro’s stock climbed 1.00%, ending the trading session at $72.39. A total volume of 923.45 thousand shares have exchanged hands, which was higher than the 3-month average volume of 507.99 thousand shares. The Company’s stock price soared 17.48% in the last three months, 31.31% in the past six months, and 65.52% in the previous twelve months. Moreover, the stock surged 29.38% since the start of the year. The stock is trading at a PE ratio of 32.05 and has a dividend yield of 0.97%. The stock currently has a market cap of $7.73 billion.

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