The Toro Company (TTC) Q3 2023 Financial Results Summary
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The Toro Company (TTC) Q3 2026: Record Sales and EPS Growth — Strongly Positive
The Toro Company (NYSE: TTC) reported a robust third quarter for fiscal 2026, with net sales increasing by $92.5 million or +8.4% year-over-year to $1.23 billion. This performance is underscored by a significant rise in earnings per share (EPS), which surged by 50.0% to $0.81 compared to $0.54 in the same quarter last year.
This quarter's results are undoubtedly positive for shareholders, reflecting strong demand across Toro's product lines and effective operational management. The company’s ability to raise its full-year guidance further reinforces this optimistic outlook.
Key Financial Metrics
- Net Sales: $1.23 billion, up $92.5 million or +8.4% YoY
- Reported EPS: $0.81, up $0.27 or +50.0% YoY
- Adjusted EPS: $1.33, up $0.09 or +7.3% YoY
- Shareholder Returns: $110 million returned to shareholders, totaling $471 million year-to-date
Segment Performance
- Professional Segment:
- Net Sales: $1,012.6 million, up 8.8% from $930.8 million YoY
- Earnings: $211.8 million, up from $198.5 million YoY, with a margin of 20.9%
- Residential Segment:
- Net Sales: $209.3 million, up 8.6% from $192.8 million YoY
- Earnings: $12.4 million, up from $3.7 million YoY, with a margin of 5.9%
Operational Highlights
- Gross Margin: 34.1%, up from 33.7% YoY
- Adjusted Gross Margin: 35.0%, up from 34.4% YoY
- SG&A Expense as a Percentage of Net Sales: 21.2%, compared to 20.8% in the prior-year period
- Operating Earnings as a Percentage of Net Sales: 9.4%, up from 5.7% YoY
The increase in gross margin is attributed to net price realization and productivity improvements, although higher material and manufacturing costs partially offset these gains. The company has also effectively managed its inventory, contributing to robust free cash flow.
Shareholder Returns and Guidance
Toro returned $110 million to shareholders in the third quarter, bringing the year-to-date total to $471 million. The company has raised its full-year guidance, now expecting net sales growth in the range of 6.3% to 6.6%, up from the previous range of 4.0% to 6.5%. Adjusted EPS guidance has also been increased to a range of $4.60 to $4.65, up from $4.50 to $4.62.
Analyst Opinion
This quarter's results are a clear indication of Toro's strong market position and operational efficiency. The significant increase in both net sales and EPS demonstrates the company's ability to capitalize on demand trends while managing costs effectively. The raised guidance reflects management's confidence in sustaining this momentum, making this a favorable quarter for shareholders.
Forward-Looking Catalysts
Investors should keep an eye on Toro's continued execution of its productivity initiatives and the impact of new product launches in the upcoming quarters. The company's ability to maintain inventory levels and manage costs will be critical as it navigates potential economic challenges. Additionally, the performance of the Professional segment, which has shown strong growth, will be a key area to watch as Toro seeks to leverage its market position further.
In conclusion, The Toro Company's third-quarter results not only beat prior year figures but also set a positive tone for the remainder of the fiscal year, making it an attractive prospect for investors looking for growth in the outdoor solutions market.
Note: The following tables are in thousands.
| Three Months Ended | July 31, 2026 | Nine Months Ended | July 31, 2026 |
|---|---|---|---|
| Net sales | $1,225,000 | Net sales | $3,680,000 |
| Cost of sales | 807,700 | Cost of sales | 2,440,000 |
| Gross profit | 418,100 | Gross profit | 1,230,000 |
| Gross margin | 34.1% | Gross margin | 33.6% |
| Selling, general and administrative expenses | 259,800 | Selling, general and administrative expenses | 796,900 |
| Operating earnings | 115,200 | Operating earnings | 397,300 |
| Interest expense | -13,800 | Interest expense | -42,800 |
| Other income | 5,500 | Other income | 22,700 |
| Net earnings before income taxes | 106,900 | Net earnings before income taxes | 377,200 |
| Income tax provision | 29,900 | Income tax provision | 86,900 |
| Net earnings | 77,000 | Net earnings | 290,300 |
| Basic net earnings per share | $0.81 | Basic net earnings per share | $3.01 |
| Diluted net earnings per share | $0.81 | Diluted net earnings per share | $2.99 |
| Weighted-average shares used to compute net income per share | 95,200 | Weighted-average shares used to compute net income per share | 96,600 |
Note: The following table is in millions.
| July 31, 2026 | August 1, 2025 | October 31, 2025 | |
|---|---|---|---|
| Cash and cash equivalents | $175.3 | Cash and cash equivalents | $201.0 |
| Receivables, net | 496.1 | Receivables, net | 472.7 |
| Inventories, net | 882.7 | Inventories, net | 1,036.2 |
| Prepaid expenses and other current assets | 103.4 | Prepaid expenses and other current assets | 84.2 |
| Total current assets | 1,657.5 | Total current assets | 1,794.1 |
| Property, plant, and equipment, net | 588.8 | Property, plant, and equipment, net | 629.1 |
| Goodwill | 576.5 | Goodwill | 450.8 |
| Other intangible assets, net | 439.5 | Other intangible assets, net | 398.6 |
| Right-of-use assets | 97.4 | Right-of-use assets | 105.6 |
| Investment in finance affiliate | 39.7 | Investment in finance affiliate | 41.3 |
| Deferred income taxes | 119.0 | Deferred income taxes | 85.6 |
| Other assets | 17.6 | Other assets | 14.7 |
| Total assets | $3,536.0 | Total assets | $3,519.8 |
| Current portion of long-term debt and short-term borrowings | $0.0 | Current portion of long-term debt and short-term borrowings | $20.0 |
| Accounts payable | 463.6 | Accounts payable | 385.0 |
| Accrued liabilities | 568.2 | Accrued liabilities | 534.3 |
| Short-term lease liabilities | 20.2 | Short-term lease liabilities | 16.6 |
| Total current liabilities | 1,052.0 | Total current liabilities | 955.9 |
| Long-term debt, less current portion | 962.0 | Long-term debt, less current portion | 1,012.2 |
| Long-term lease liabilities | 95.8 | Long-term lease liabilities | 92.8 |
| Deferred income taxes | 19.4 | Deferred income taxes | 0.6 |
| Other long-term liabilities | 70.5 | Other long-term liabilities | 47.2 |
| Common stock | 0.9 | Common stock | 97.9 |
| Retained earnings | 1,359.2 | Retained earnings | 1,350.7 |
| Accumulated other comprehensive loss | -23.8 | Accumulated other comprehensive loss | -37.5 |
| Total stockholders’ equity | 1,336.3 | Total stockholders’ equity | 1,411.1 |
| Total liabilities and stockholders’ equity | $3,536.0 | Total liabilities and stockholders’ equity | $3,519.8 |
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