Toro sees gains in residential division
Lifted by more favorable weather patterns, Bloomington, Minn.-based The Toro Co. reported strong sales in its residential division.
Residential segment net sales for the third quarter totaled $155.5 million, up 14.4% from the prior-year period. Favorable temperatures and precipitation levels in the quarter led to sales increases across all summer product categories, including riding products, walk power mowers and handheld trimmer and blower products.
However, declines in the professional segment led to mixed results for Toro in the third quarter ended Aug. 2.
Net earnings of $40.1 million were down slightly from $40.5 million in the same quarter last year. Net sales increased 1.2% to $509.9 million.
“For the quarter, our results were strengthened by a summer growing season with favorable temperatures and precipitation levels as compared with last year’s severe drought conditions,” said Michael J. Hoffman, Toro’s chairman and CEO “The more desirable weather helped us drive retail sales across most of our businesses and, in particular, our residential business."
He said the company’s performance also benefited from the successful launch of the Timecutter zero-turn-radius riding products and the new lithium-ion battery-powered string and hedge trimmers.
Lowe’s COO outlines Q2 moves
Lowe’s COO Rick Damron told investors the retailer’s second-quarter performance was balanced across categories as well as geographic regions.
On Wednesday, the Mooresville, N.C.-based company reported second-quarter sales gains of 10.3% to $15.7 billion.
"We achieved very strong second-quarter growth in products needed to improve and maintain the yard, tools and outdoor power equipment, and lawn and garden were among our best-performing product categories in the quarter," Damron said.
The strong growth also appeared in kitchens and appliances, which received a boost from the new LG line, which rolled out in the first quarter and gained traction in the second, he said. The category also benefited from a first-place ranking from JD Power and Associates in appliance retail customer satisfaction for a fourth consecutive year, he said.
The core categories of hardware, paint and fashion electrical hit mid-single-digit comps in the quarter, but also showed "solid growth and gross margin rates," Damron said.
Damron pointed to the example of power tools sandpaper as an example of value improvement. Lowe’s sorted out its offering into a clear progression and eliminated price-point and design duplications. WIth Gator Grip at opening price points and the Shopsmith line on the premium side, the new mix improved productivity, he said.
At the end of the second quarter, Lowe’s had completed resets representing approximately 70% of the store.
Niblock elaborates on Orchard strategy
Mooresville, N.C.-based Lowe’s CEO Robert Niblock added some color to the company’s plans to acquire 72 Orchard Supply Hardware stores.
Earlier this week, the federal antitrust review and bankruptcy court approved Lowe’s $205 million bid. In comments to investors Wednesday, Niblock said he expected the deal to close at the end of August.
"Strategically, the transaction will provide Lowe’s with an attractive opportunity to increase our footprint in California, where we’re currently understored, through a neighborhood format that is complementary to our strength in big-box retail," Niblock said.
Lowe’s operates 110 stores in California, compared with Home Depot’s California store count of 223.
Niblock added: "Orchard’s hardware and backyard stores have a loyal customer base and are situated in high-density, prime locations. We see significant potential for Orchard as a stand-alone business within Lowe’s portfolio, and we look forward to the opportunity to participate more fully in California’s economic recovery."
On Wednesday, Lowe’s posted a second-quarter sales increase of 10.3%.