The Toro pany(TTC) - 2025 Q1 - Quarterly Results

Financial Performance - First-quarter net sales were $995 million, down 1% from $1,002 million in the same period of fiscal 2024[5] - Reported diluted EPS for the first quarter was $0.52, a decrease of 16% compared to $0.62 in the same period of fiscal 2024[5] - Adjusted diluted EPS for the first quarter was $0.65, up 2% from $0.64 in the same period of fiscal 2024[5] - Operating earnings decreased to $77.8 million, compared to $88.6 million in the previous year, reflecting a decline of 12.0%[28] - Net earnings for the three months ended January 31, 2025, were $52.8 million, down 18.6% from $64.9 million in the same period of 2024[28] - Adjusted net earnings for the three months ended January 31, 2025, were $65.9 million, slightly down from $66.5 million in the prior year, with adjusted net earnings per diluted share at $0.65, compared to $0.64[36] Segment Performance - Professional segment net sales increased by 1.6% to $768.8 million, driven by higher shipments of golf and grounds products[17] - Professional segment earnings rose to $127.2 million, with a margin of 16.5%, up from 14.9% in the prior-year period[17] - Residential segment net sales decreased by 8% to $221 million, primarily due to lower shipments of snow products and the prior year Pope Products divestiture[17] - The Professional segment net sales increased to $768.8 million, up 1.9% from $756.5 million in the prior year, while the Residential segment net sales decreased to $221.0 million, down 7.9%[30] Cash Flow and Shareholder Returns - The company returned $100 million to shareholders through share repurchases, reflecting improved cash flow[2] - The company reported a net cash used in operating activities of $48.6 million for the three months ended January 31, 2025, compared to $92.2 million in the same period of 2024[34] - Free cash flow for the three months ended January 31, 2025, was $(67.7) million, an improvement from $(111.3) million in the same period of 2024, resulting in a free cash flow conversion percentage of (128.2)% compared to (171.5)%[38] - Net cash used in operating activities for the three months ended January 31, 2025, was $(48.6) million, an improvement from $(92.2) million in the prior year[38] Guidance and Future Initiatives - The company maintains full-year fiscal 2025 net sales growth guidance of 0% to 1% and adjusted diluted EPS guidance of $4.25 to $4.40[7] - The AMP initiative has delivered $64 million in run-rate cost savings to date, with a target of $100 million by fiscal 2027[6] - The company anticipates continued demand trends and has provided fiscal 2025 financial guidance, although specific figures were not disclosed in the provided content[25] Cost and Margin Analysis - Gross margin for the first quarter was 33.7%, down from 34.4% in the same prior-year period due to higher material and manufacturing costs[12] - Gross profit for the same period was $335.6 million, resulting in a gross margin of 33.7%, down from 34.4% in the prior year[28] - Operating earnings for the three months ended January 31, 2025, were $77.8 million, down from $88.6 million in the prior year, with an operating earnings margin of 7.8% compared to 8.8%[36] - Adjusted operating earnings for the three months ended January 31, 2025, were $94.0 million, compared to $92.5 million in the same period of 2024, with an adjusted operating earnings margin of 9.4%[36] Taxation - The effective tax rate for the three months ended January 31, 2025, was 20.1%, an increase from 19.0% in the same period of 2024[36] - Income tax provision for the three months ended January 31, 2025, was $13.3 million, down from $15.2 million in the prior year[36] - The company recorded a tax impact of share-based compensation of $0.1 million for the three months ended January 31, 2025, compared to $1.5 million in the same period of 2024[36]