The Toro Company (TTC) Q1 2026 earnings summary

Executive summary

• Q1 FY2026 net sales rose 4.2% year-over-year to $1.04 billion, driven by strong Professional segment growth and the Tornado Infrastructure Equipment acquisition, exceeding expectations.

• Adjusted EPS increased to $0.74 from $0.65 a year ago, with reported EPS at $0.69, supported by productivity initiatives and Professional segment performance.

• Free cash flow for Q1 was $14.6 million, with a conversion rate of 21.5%, and $133 million was returned to shareholders via dividends and share repurchases.

• The AMP productivity initiative delivered cumulative cost savings of $94.3 million, with annualized savings of $94.9 million.

• Continued investment in technology, innovation, and operational excellence, including new product launches and cost-saving programs.

Financial highlights

• Professional segment net sales were $824 million, up 7.2% year-over-year; residential segment net sales were $206 million, down 6.8%.

• Professional segment earnings reached $137.6 million (margin 16.7%); residential segment earnings were $13.2 million (margin 6.4%).

• Gross margin was 32.5%, down 120 basis points year-over-year; adjusted operating margin improved to 9.8%.

• SG&A expense as a percentage of sales fell by 180 basis points to 24.1%.

• Free cash flow conversion for Q1 was 21.5%.

Outlook and guidance

• Raised full-year net sales growth guidance to 3%–6.5%; adjusted EPS guidance increased to $4.40–$4.60.

• Professional segment net sales expected to grow mid-single digits; residential segment expected flat to down 3%.

• Adjusted operating earnings margin for Professional segment expected at 18.5%–19.5%; residential at 6.5%–8.5%.

• AMP initiative on track for at least $125 million in run-rate savings by FY2027.

• Q2 FY2026 net sales and adjusted EPS expected to grow mid-single digits year-over-year.