Toro Company Surpasses Profit Expectations on Professional Sector Strength
Bloomington, Wednesday, 17 December 2025.
Toro outperformed forecasts with record free cash flow of $578 million, as robust professional equipment sales successfully counterbalanced a sharp decline in residential revenue.
Earnings Beat Amidst Mixed Revenue Trends
The Toro Company (TTC) released its financial results for the fourth quarter and full fiscal year ended October 31, 2025, on December 17, 2025 [1]. The company reported fourth-quarter net sales of $1.07 billion, exceeding analyst consensus estimates by approximately $18.36 million [1][2]. Profitability also surpassed expectations, with adjusted earnings per share (EPS) coming in at $0.91, beating the projected $0.88 by $0.03 [3]. While the quarterly revenue performance was better than anticipated, it represented a slight year-over-year contraction compared to the $1.08 billion recorded in the same period of fiscal 2024 [1].
Fiscal 2025 Performance Analysis
For the full fiscal year 2025, The Toro Company navigated a challenging demand environment, resulting in total net sales of $4.51 billion compared to $4.58 billion in the prior year [1]. This represents a full-year revenue decline of -1.528%. Despite the slight dip in top-line figures, the company demonstrated operational resilience, delivering a full-year adjusted diluted EPS of $4.20, an increase from the $4.17 reported in fiscal 2024 [1]. Chairman and CEO Richard M. Olson noted that the performance exceeded internal expectations, attributing the success to strategic investments in productivity and the strength of the Professional segment [1][4].
Operational Efficiency and Capital Allocation
A standout metric in the fiscal 2025 report was the generation of record free cash flow, which totaled $578 million [1]. Management attributed this liquidity boost largely to successful working capital improvements [1]. This strong cash position allowed the company to return significant capital to shareholders, totaling $441 million through a combination of cash dividends and common stock repurchases [1]. Furthermore, the company is doubling down on efficiency, raising its annualized material productivity (AMP) savings target to $125 million by fiscal 2027, up from the initial expectation of at least $100 million [1].
Fiscal 2026 Outlook
Looking ahead to fiscal 2026, The Toro Company has issued guidance that suggests a return to moderate growth. Management expects total net sales to increase in the range of 2% to 5% [1]. From an earnings perspective, the company has set its adjusted diluted EPS guidance between $4.35 and $4.50 [1]. This outlook reflects confidence in the continued momentum of the Professional business and the anticipated benefits of ongoing productivity initiatives, despite the persistent softness observed in the residential market [1][4].