Why Outdoor Equipment Products Provider Toro Shares Are Surging Today

The Toro Company (NYSE:TTC) shares are trading higher after the company reported second-quarter FY24 results.

Sales increased 1% Y/Y to $1.35 billion, beating the consensus of $1.343 billion.

Sales by segments: Professional $1.006 billion (-5.9% Y/Y), and Residential $335.6 million (+26.3 Y/Y).

Adjusted gross margin contracted to 33.6% from 35.8% a year ago due to a change in product mix and higher material and manufacturing costs.

Adjusted operating margin declined to 14.2% from 16.3% the prior year. Adjusted EPS of $1.40 (-11% Y/Y) surpassed the consensus of $1.29.

As of May 3, cash and equivalents stood at $188.8 million.

Richard M. Olson, chairman and chief executive officer, said, “We realized exceptional growth in our residential segment due to our strong mass channel, successful new product introductions, and better weather conditions compared to last year.”

“Importantly, we made significant progress in reducing dealer field inventories of lawn care equipment in both the residential and professional segment, a result of lower shipments to that channel, coupled with spring retail momentum.”

FY24 Outlook: Toro continues to expect low-single-digit total company net sales growth and adjusted EPS of $4.25-$4.35 (vs. consensus: $4.26).

Olson added, “We expect continued growth in shipments to our residential segment mass channel, and anticipate this growth will help offset our expectations for lower preseason shipments of snow and ice management products given the lack of snow this past winter.”

Investors can gain exposure to the stock via MarketDesk Focused U.S. Dividend ETF (NASDAQ:FDIV) and VanEck Agribusiness ETF (NYSE:MOO).

Price Action: TTC shares are up 12.77% at $89.81 at the last check Thursday.