Why Toro Shares Are Sliding Today

The Toro Co TTC reported a Q2 FY23 sales growth of 7% Y/Y to $1.34 billion, missing the consensus of $1.44 billion.

Adjusted EPS of $1.58 (up 26% Y/Y) beat the consensus of $1.52.

Sales by segments: Professional $1.07 billion (+15% Y/Y), and Residential $265.8 million (-16.8% Y/Y).

The adjusted gross margin expanded to 35.8% from 32.5% a year ago.

The adjusted operating margin grew to 16.3% from 13.8% the prior year.

The company held $151.3 million in cash and cash equivalents at the end of the quarter.

FY23 Outlook: Toro narrowed its net sales growth outlook to 7% to 8% (vs. 7% to 10% previously) and adjusted EPS to $4.70- $4.80 (vs. $4.70-$4.90 earlier) vs. the consensus of $4.84.

"These results were driven by our professional segment, where continued demand, operational execution, and supply chain improvements drove broad sales volume gains and increased profitability. In our residential segment, sales volume and earnings were pressured by unfavorable weather patterns and macroeconomic factors," said Richard M. Olson, chairman and CEO.

Last month, the company declared a quarterly dividend per share of $0.34, payable on July 12, 2023, to shareholders of record as on June 21, 2023.

Price Action: TTC shares are trading lower by 5.92% at $98.46 on the last check Thursday.