Toro takes Q2 hit from COVID-19

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Toro takes Q2 hit from COVID-19

By HBSDealer Staff - 06/04/2020
The Toro Company said it felt the impact of the COVID-19 crisis during its second quarter.

The Bloomington, Minn.-based manufacturer reported second quarter 2020 net sales dropped 3.4% to of $929.4 million compared with $962 million in the second quarter of 2019. 

But year-to-date fiscal 2020 net sales are $1.7 billion, up 8.4% compared with $1.56 billion in the same prior year period, thanks to a strong first quarter.

Net earnings for the second quarter dropped 14.8% to $98.4 million from net earnings of $115.6 million in the second quarter of fiscal 2019.

Year-to-date fiscal 2020 net earnings of $168.5 million are down 3.8% compared with $175.1 million in the same period last year.

Professional segment net sales for the second quarter were $661.1 million, down 8.6% compared with $723.5 million in the same period last year. Toro said the decrease was primarily due to reduced retail demand as a result of COVID-19 related impacts. 

Residential segment sales for the second quarter increased 12.9% to $262 million from $232.1 million in the same period last year. The increase was primarily due to incremental shipments of zero turn riding and walk power mowers to the company’s expanded mass retail channel and strong retail demand, Toro said.

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The Bottom Line: The COVID-19 crisis stings Toro’s sales as professional sales fall 8.6% in the first quarter while net earnings decline 14.8% to $98.4 million.

What the CEO said: “Retail demand in the second quarter started strong and continued favorably until mid-March when the full effects of the pandemic were realized in North America,” said Toro Chairman and CEO Richard Olson. “The direct impact of government orders and the general weakening of customer confidence reduced demand in key professional markets. Residential segment sales were strong throughout the quarter driven by new products, an expanded channel, a strong start to spring and consumer behavior in favor of home and garden improvement during stay at home orders.”

“In May, the residential segment momentum continued—driven by the same factors, while the professional segment saw a significant step down in some markets as customers reduced capital budgets and deferred new purchases,” added Olson. “While we can’t fully determine the level of customer spending that will return in fiscal 2020, we are taking every opportunity to support our customers with products and parts along with financing and other tools.”

Company info: Toro’s full second quarter report can be read here.

 

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