The Toro Company in the US have reported net earnings of $55.8 million, or $1.00 per share, on net sales of $601 million, a decrease of 1.4 percent, for its fiscal third quarter ended July 29, 2016.

In the comparable fiscal 2015 period, the company delivered net earnings of $53.3 million, or $0.94 per share, on net sales of $609.6 million.

For the first nine months, Toro reported net earnings of $200.8 million, or $3.58 per share, on a net sales increase of 0.7 percent to $1.924 billion. In the comparable fiscal 2015 period, the company posted net earnings of $178 million, or $3.13 per share, on net sales of $1.910 billion.

“In spite of challenging weather and currency conditions and the resulting impact on our revenues, we are pleased to deliver another solid quarter achieving record earnings. The strong performance within our professional businesses driven by new product introductions and outstanding execution by the team, fueled growth in that segment for the quarter,” said Michael J. Hoffman, Toro’s chairman and chief executive officer.

“We see positive momentum in our golf equipment and irrigation businesses as we gain share in key markets. Additionally, our specialty construction and rental businesses are experiencing solid growth and are benefitting from new product introductions.”

“With mixed consumer retail activity in the quarter, as was felt across the industry, we were encouraged by overall retail demand for our walk power and zero turn riding mower products during the summer months,” said Hoffman. “We performed well despite sluggish sales in certain regions that experienced challenging weather conditions.”

“With the fourth quarter underway, we continue to see positive retail sales across our businesses. Additionally, in our snow and ice management businesses, we are well positioned with new innovative products as the preseason begins. I would like to take this opportunity to thank our worldwide employees and channel partners for their hard work and dedication. It is their tireless commitment to excellence that drives the company’s steady performance.”

The company is narrowing its full-year earnings outlook to about $3.95 to $4.00 per share. Full-year revenue growth expectations for fiscal 2016 have also been narrowed to flat to up 1 percent.

SEGMENT RESULTS

Professional

Professional segment net sales for the third quarter totaled $427.8 million, up 1.4 percent from $422 million in the same period last year. For the first nine months, professional segment net sales were $1.362 billion, up 3.6 percent from the comparable fiscal 2015 period. Momentum generated in our golf equipment and irrigation businesses produced positive results for the quarter and the year. Additionally, continued demand for products such as the Dingo TX 1000 compact utility loader in both the rental and specialty construction businesses contributed to the growth for both periods. For the quarter, these gains were offset by lower channel demand for landscape contractor equipment.
Professional segment earnings for the third quarter totaled $89.1 million, up 8.3 percent from $82.3 million in the same period last year. For the first nine months, professional segment earnings were $292.3 million, up 13.0 percent from $258.7 million in the comparable fiscal 2015 period.

Residential

Residential segment net sales for the third quarter were $167.8 million, down 4.6 percent from $176 million in the same period last year. For the first nine months, residential segment net sales were $550.3 million, down 4.9 percent from the comparable fiscal 2015 period. The sales decline for the quarter was due primarily to reduced worldwide channel demand for walk power and riding mowers. The decrease was somewhat offset by higher shipments of snow products in the quarter. Decreased worldwide sales of zero turn riding mowers and snow product contributed to the decline for the year.
Residential segment earnings for the third quarter were $12.8 million, down 37.9 percent from $20.6 million from the same period last year. For the first nine months, residential segment earnings were $64.5 million, down 6.7 percent from the comparable fiscal 2015 period.

OPERATING RESULTS

Gross margin as a percent of sales for the third quarter was 36.0 percent, an increase of 50 basis points from the same period last year. The increase was primarily due to favorable commodities, enhanced productivity and segment mix. For the first nine months, gross margin as a percent of sales was 36.5 percent, an increase of 160 basis points from the same period last year, also primarily due to favorable commodities, enhanced productivity and segment mix. These gains were offset by the impact of unfavorable currency exchange rates in both periods.