<div id="readability-page-1"><ul><li>The 8 best agricultural ETFs to consider for your portfolio</li></ul>Toro NYSE: TTC executives said the company closed fiscal 2025 with fourth-quarter sales and adjusted earnings per share ahead of internal expectations, pointing to continued momentum in underground construction and an improving snow-and-ice season as key drivers. Management also highlighted record free cash flow generation, additional productivity targets under its multi-year efficiency program, and an outlook calling for mid-single-digit earnings growth in fiscal 2026 despite ongoing macro pressure on residential demand.<h2>Fourth-quarter performance outpaced expectations</h2> Chairman and CEO Rick Olson said Toro delivered fourth-quarter consolidated net sales of $1.07 billion. He added that professional segment margin in the quarter rose to 19.2%, driven by “sustained momentum” in underground construction and better-than-anticipated growth in snow and ice management. <ul><li>Toro Stock is Worth Getting Off Season </li></ul>Vice President and CFO Angie Drake reported fourth-quarter adjusted diluted earnings per share of $0.91, compared with $0.95 in the prior-year period. She attributed the year-over-year change primarily to higher expense from the restoration of employee incentive compensation, mostly offset by improved segment earnings in both professional and residential operations. On the segment level, Drake said: <ul> <li>Professional fourth-quarter net sales were $910 million, “virtually equal” to last year. Net price realization and higher shipments of underground construction and snow and ice products nearly offset lower shipments in golf, grounds, and zero-turn mowers, plus the impact of prior-year divestitures.</li> <li>Professional fourth-quarter earnings were $174.7 million, up 2.9% year over year, with margin expanding 60 basis points to 19.2%.</li> <li>Residential fourth-quarter net sales were $147 million, down 5.1% year over year but ahead of expectations due to price realization and higher snow product shipments tied to pre-season stocking.</li> <li>The residential segment posted higher-than-expected fourth-quarter earnings and improved results by $13 million compared with the prior year, which Drake said reflected deliberate measures to reduce costs and improve productivity.</li> </ul> <ul><li>The Toro Company Is A Raging Bull You Want To Own</li></ul>Drake also said fourth-quarter adjusted gross margin improved to 34.5% from 32.3% a year earlier, primarily due to price realization and productivity improvements, partially offset by lower volume, higher material and manufacturing costs, and product mix. <h2>Full-year results: sales near guidance high end, professional margins expanded</h2> For fiscal 2025, Olson said Toro reached the higher end of its net sales guidance with $4.5 billion in consolidated net sales, down 1.6% from fiscal 2024. He said a significant portion of the decline was attributable to strategic divestitures of company-owned dealers and the Pope product line. Adjusted diluted EPS for the year was $4.20, exceeding the company’s guidance of about $4.15 and above $4.17 reported last year, according to Olson and Drake. Drake said professional segment net sales increased 1.9% to $3.62 billion, representing about 80% of total company sales. Professional segment earnings were $702.5 million and the earnings margin was 19.4%, up from 18% in fiscal 2024. In residential, Drake said full-year net sales were $858.4 million, down 14% from the prior year. Full-year residential segment earnings were $35.8 million, or 4.2% of segment net sales, compared with $78.4 million and 7.9% in fiscal 2024. On consolidated profitability, Drake said full-year adjusted gross margin was 34.1% versus 33.9% in fiscal 2024, helped by price realization and productivity improvements but partially offset by lower volume, higher costs, and inventory valuation adjustments. SG&amp;A expense was 22.5% of net sales for both the quarter and the year, reflecting deleverage from lower sales volume partially offset by cost savings. <h2>Productivity program expanded; divestitures and footprint reductions highlighted</h2> Management repeatedly pointed to Toro’s “amplifying maximum productivity” (AMP) initiative as a key contributor to margin resilience. Olson said the AMP program has delivered $86 million in annualized run-rate cost savings so far and that Toro increased its run-rate savings target to $125 million or more by the end of 2026, up from the prior target of at least $100 million. Olson outlined actions tied to the program, including facility closures, a reduction of the operational footprint by more than 1 million square feet, a reduction in salaried workforce of nearly 15%, and divestitures of non-core businesses and product lines totaling approximately $60 million in revenue. During Q&amp;A, management said the additional savings are expected to come from the same workstreams previously discussed—supply-based initiatives, design-to-value, route-to-market changes, and operational efficiency—and added that they do not believe increased volume is required to achieve the higher target. Executives also said Toro still expects to reinvest up to about 50% of the savings, noting the company “over-indexed” toward investment in fiscal 2025 due to tariffs, inflation, and transition expenses tied to product moves and network optimization. <h2>Cash flow, capital allocation, and balance sheet</h2> Olson said Toro produced record free cash flow of $578 million with a conversion rate of 146%, while Drake cited free cash flow of $587 million, also describing it as a record and attributing the improvement largely to favorable working capital changes. Drake said Toro returned $441 million to shareholders through dividends and share repurchases in fiscal 2025. Drake said the balance sheet remains strong, with a leverage ratio of 1.3x and financial flexibility to support capital deployment priorities. <h2>Fiscal 2026 outlook: growth led by professional segment, residential pressure persists</h2> Looking ahead, Drake said Toro expects fiscal 2026 total company net sales to increase 2% to 5%. The outlook assumes mid-single-digit growth in the professional segment, partially offset by a low- to mid-single-digit decline in residential sales. Toro also expects adjusted gross margin to improve in 2026 and said the combination of margin improvement, productivity, and management of tariffs and inflationary pressures should drive a higher adjusted operating earnings margin. The company’s margin outlook includes: <ul> <li>Professional segment earnings margin of 18.5% to 19.5% in 2026 (versus 19.4% in fiscal 2025).</li> <li>Residential segment earnings margin of 6% to 8% as it “builds on” 2025 progress.</li> </ul> Drake guided to fiscal 2026 adjusted EPS of $4.35 to $4.50, assuming approximately $65 million of interest expense, an adjusted effective tax rate of about 21%, and capital expenditures of $90 million to $100 million. Toro expects free cash flow conversion of greater than 110% in 2026 and said it anticipates repurchasing shares at a rate similar to last year. For the first quarter of fiscal 2026, Drake said Toro expects total company net sales to be up slightly year over year, with professional segment sales up mid-single digits and residential sales down high teens. Adjusted EPS is expected to be flat to slightly lower than the prior-year first quarter, reflecting seasonality and a conservative view of consumer sentiment. During Q&amp;A, executives said channel inventories are “in good shape” and closer to normal ranges. Management also said backlog improved by $400 million year over year; Toro ended the prior year with $1.2 billion of backlog, with the change reflecting improved lead times and customers ordering closer to need. On tariffs, Olson said Toro incurred about $65 million in tariffs in 2025, including $20 million to $25 million tied to tariffs dating back to 2018. For 2026, he said Toro’s tariff total is expected to be about $100 million, reflecting a full year of tariffs experienced in 2025 plus “a small factor” of additional tariffs. He said a little more than half of the 2026 total relates to Section 232 steel and aluminum tariffs, with China-related tariffs the second-largest category despite what he described as reduced China exposure since 2018.<h2>About Toro NYSE: TTC</h2>The Toro Company NYSE: TTC specializes in the design, manufacture and marketing of a broad range of outdoor environment equipment for residential, commercial and professional markets. Its product portfolio includes lawn mowers, utility vehicles, snow throwers, irrigation systems and landscape maintenance equipment. Toro's offerings span walk-behind and ride-on mowers, zero-turn radius mowers, snow blowers, sprinklers, drip irrigation products, spreaders and specialty turf maintenance machines tailored to golf courses, sports fields and municipal parks. Founded in 1914 and headquartered in Bloomington, Minnesota, Toro has built a century-long legacy of innovation in the grounds-care industry.<h2>Featured Articles</h2><ul><li>Five stocks we like better than Toro</li><li>End of America update</li><li>How Long Will $1M Last in Retirement?</li><li>Nvidia CEO Issues Bold Tesla Call</li><li>[No Brainer Gold Play]: “Show me a better investment.”</li><li>Drop these 5 stocks now!</li></ul>This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.<h2>Should You Invest $1,000 in Toro Right Now?</h2>Before you consider Toro, you'll want to hear this.MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Toro wasn't on the list.While Toro currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.View The Five Stocks Here </div>

Toro closed fiscal 2025 with Q4 sales and adjusted EPS exceeding expectations, driven by underground construction and snow-and-ice season. Record free cash flow and productivity targets were highlighted. Professional segment margin rose to 19.2%. Adjusted EPS was $0.91, impacted by employee incentive costs. Fiscal 2025 net sales reached $4.5 billion, with strategic divestitures affecting results. The AMP initiative aims for $125 million in savings by 2026. Management plans to reinvest savings despite macro pressures.

Toro Q4 Earnings Call Highlights