Toro posts mixed Q3 results
Landscaping contractor equipment and irrigation product orders take a hit from poor weather.
The Toro Company reported third quarter 2019 sales increased 27.9% to $838.7 million from third quarter 2018 net sales of $665.8 million in the third quarter 2018.
The Bloomington, Minn.-based manufacturer also reported net earnings of $60.6 million for the quarter, down 23.3% from net earnings of $79 million for the same period a year ago.
Professional segment net sales for the third quarter were $676.8 million, up 40.3% from $482.5 million last year. Offsetting growth for the quarter, were lower shipments of landscaping contractor equipment and irrigation products, due to poor weather conditions in key regions.
Residential segment net sales for the third quarter were $148.2 million, down 11% from $166.5 million last year. For the quarter, strong pre-season snow thrower shipments were more than offset by soft zero-turn riding and walk power mower sales, which contributed to the revenue decline.
The bottom line: Sales soar nearly 28% following the acquisition of Charles Machine Works, but profits fall 23.3% for the third quarter.
What the CEO said: “Third quarter revenue growth was driven by the addition of the Charles Machine Works portfolio as integration continues to progress as planned,” said Richard Olson, Toro chairman and CEO. “The entire team has been collaboratively working to optimize the combined enterprise, with a focus on consistent execution, an unwavering commitment to innovation and a focus on customer relationships. I am proud of our team’s progress to date.”
“As mentioned earlier this month, we have launched a new strategy for our underground businesses, which will enable us to satisfy customer needs more effectively, while also capturing manufacturing and operational efficiencies. This is one example of many, where we have been able to move quickly and decisively to eliminate redundancies and align priorities. Integration continues to go well, and we are encouraged by the progress we have made since we announced the acquisition earlier this year.”
“As anticipated, we are seeing gross margin improvement in the second half of the fiscal year and we expect that positive momentum to continue in the months ahead. Commodity costs have begun to moderate and we have been able to achieve strategic pricing realization. Additionally, prudent expense management contributed to the favorable quarterly results.”
Company info: Toro’s full third quarter 2019 report can be accessed here.
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