The Toro Company (TTC) Q3 2025 earnings summary

Executive summary

• Adjusted diluted EPS for Q3 2025 rose 5% year-over-year to $1.24, exceeding expectations, driven by strong Professional segment performance and cost savings from the AMP program, despite ongoing headwinds in the Residential segment and macroeconomic challenges.

• Net sales for Q3 2025 were $1,131.3 million, down 2.2% year-over-year, with half the decline due to prior-year divestitures.

• Professional segment sales grew 5.7% in Q3, while Residential segment sales declined 27.9%.

• Non-cash impairment charge of $81 million pre-tax ($0.62 per share) related to the Spartan trade name significantly impacted reported earnings.

• AMP productivity initiative delivered $75 million in annualized cost savings, targeting at least $100 million by 2027.

Financial highlights

• Q3 2025 net sales were $1,131.3 million, down 2.2% year-over-year; adjusted net earnings were $122.5 million, nearly flat year-over-year.

• Adjusted diluted EPS was $1.24, up 5.1% year-over-year; reported EPS was $0.54, down 53% due to impairment.

• Professional segment net sales grew 5.7% to $930.8 million, with earnings margin up to 21.3%.

• Residential segment net sales fell 27.9% to $192.8 million; earnings margin dropped to 1.9%.

• Free cash flow for nine months was $291.9 million, with a 90% conversion rate; $90 million invested in share repurchases during Q3.

Outlook and guidance

• Fiscal 2025 net sales and adjusted diluted EPS expected at the low end of guidance: net sales flat to down 3%, adjusted EPS about $4.15.

• Professional segment revenue projected to be up slightly year-over-year; residential segment expected down mid-teens.

• Adjusted gross margin expected to improve year-over-year; adjusted operating margin to be flat or slightly lower.

• Free cash flow conversion guidance raised to about 110%.

• AMP program targeting at least $100 million in annualized savings by 2027.