The Toro Company (TTC) Q4 2024 earnings summary

Executive summary

• Achieved record net sales of $4.58 billion for fiscal 2024, up 1% year-over-year, marking 15 consecutive years of growth.

• Q4 net sales rose 9.4% year-over-year, driven by strong performance in underground construction, golf, and residential segments.

• Adjusted diluted EPS for the year was $4.17, with Q4 adjusted EPS up 34% to $0.95, despite sales mix headwinds.

• Significant cash generation enabled nearly $400 million returned to shareholders, including $250 million in share repurchases.

• Launched the AMP productivity initiative targeting $100 million+ annual cost savings by 2027, with a portion to be reinvested.

Financial highlights

• Full-year net sales: $4.58 billion (up 1%); Q4 net sales: $1.08 billion (up 9.4%).

• Adjusted EPS: $4.17 for the year (down 1%); Q4 adjusted EPS: $0.95 (up 34%).

• Free cash flow: $470.7 million, 112.4% conversion of net earnings.

• Gross margin for the year: 33.8% reported, 33.9% adjusted (down from 34.6%/34.7%).

• Operating margin for the year: 11.6% reported, 12.2% adjusted.

Outlook and guidance

• Fiscal 2025 net sales growth expected at 0%-1%; adjusted diluted EPS guidance: $4.25–$4.40.

• Professional segment net sales to be up low single digits; residential segment net sales to be down high single digits.

• Adjusted gross and operating margins expected to improve; free cash flow conversion rate targeted at 100%.

• Q1 2025 net sales expected to be flat; adjusted EPS slightly lower year-over-year.

• $100 million in run-rate cost savings targeted by 2027 from the AMP initiative.