Toro Company (NYSE: TTC) posts strong Q2 growth and raises 2026 EPS guidance
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
The Toro Company reported strong fiscal second-quarter results with broad-based growth and higher profitability. Net sales rose 8.1% year-over-year to $1.42 billion, while diluted EPS increased to $1.50 from $1.37. Adjusted diluted EPS grew 12.7% to $1.60, reflecting margin expansion and operational improvements.
Professional segment sales grew 9.1% to $1.11 billion and Residential segment sales rose 4.4% to $310.4 million, with both segments posting higher margins. For the six-month period, free cash flow reached $265.5 million, more than tripling the prior year.
Given this performance, Toro raised its full-year outlook and now expects fiscal 2026 net sales growth of 4.0%–6.5% and adjusted EPS of $4.50–$4.62. Management highlighted resilient demand despite macroeconomic and inflationary headwinds.
Positive
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Negative
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Insights
Toro delivered broad-based growth, stronger margins, robust cash flow, and raised its 2026 guidance.
The Toro Company posted fiscal Q2 net sales of $1.42 billion, up 8.1% year-over-year, with adjusted EPS up 12.7% to $1.60. Growth was driven mainly by the Professional segment, where sales increased to $1,106.6 million and margins improved to 20.3%.
Residential also recovered, with net sales up 4.4% and earnings nearly doubling to $30.3 million. Gross margin expanded to 33.9% reported and 34.5% adjusted, helped by price realization and productivity, partially offset by higher material, manufacturing, and freight costs and a less favorable tax rate.
For the first six months, free cash flow rose to $265.5 million from $84.7 million, even after investing $210.3 million in acquisitions and returning $228 million to shareholders. The company lifted full-year net sales growth guidance to 4.0%–6.5% and adjusted EPS to $4.50–$4.62, signaling confidence in demand, the Tornado acquisition, and its AMP productivity initiative.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Net Sales: $1,424.7 million
Q2 2026 Diluted EPS: $1.50 per share
Q2 2026 Adjusted Diluted EPS: $1.60 per share
+5 more
8 metrics
Q2 2026 Net Sales
$1,424.7 million
Three months ended May 1, 2026; up 8.1% year-over-year
Q2 2026 Diluted EPS
$1.50 per share
Three months ended May 1, 2026; up from $1.37
Q2 2026 Adjusted Diluted EPS
$1.60 per share
Non-GAAP; up 12.7% from $1.42 in prior-year quarter
Professional Segment Q2 Net Sales
$1,106.6 million
Three months ended May 1, 2026; 9.1% year-over-year growth
Residential Segment Q2 Net Sales
$310.4 million
Three months ended May 1, 2026; 4.4% year-over-year growth
Q2 2026 Gross Margin
33.9%
Reported gross margin; adjusted gross margin 34.5%
Six-Month Free Cash Flow
$265.5 million
Six months ended May 1, 2026; free cash flow conversion 124.5%
2026 Adjusted EPS Guidance
$4.50–$4.62
Full-year fiscal 2026 outlook raised from $4.40–$4.60
Key Terms
non-GAAP financial measures, free cash flow conversion percentage, Adjusted operating earnings margin, Organic Sales Growth, +2 more
6 terms
non-GAAP financial measures financial
"This press release and the related earnings call reference certain non-GAAP financial measures"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
free cash flow conversion percentage financial
"Free cash flow conversion percentage represents free cash flow as a percentage of net earnings"
Adjusted operating earnings margin financial
"Adjusted operating earnings as a percentage of net sales for the second quarter were 14.4%"
Organic Sales Growth financial
"Organic Sales Growth (Decrease) (Non-GAAP)"
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
Amplifying Maximum Productivity or AMP initiative financial
"the company launched the "Amplifying Maximum Productivity" or AMP initiative"
effective tax rate financial
"The reported effective tax rate for the second quarter was 20.7%"
The effective tax rate is the percentage of a company's profits that it pays in taxes. It shows how much of its earnings go to taxes after all deductions and credits are considered. For investors, it indicates how much of the company's income is taken by taxes, impacting overall profitability and financial health.
Earnings Snapshot
Net Sales: $1,424.7 million · Guidance included
Q2 2026
Net Sales
$1,424.7 million
+8.1% year-over-year
Diluted EPS
$1.50
+9.5% year-over-year
Adjusted Diluted EPS
$1.60
+12.7% year-over-year
Professional Segment Net Sales
$1,106.6 million
+9.1% year-over-year
Residential Segment Net Sales
$310.4 million
+4.4% year-over-year
Guidance
Toro now expects total company net sales growth of 4.0%–6.5% and adjusted EPS of $4.50–$4.62 for fiscal 2026, raised from a prior adjusted EPS range of $4.40–$4.60.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 4, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| | ||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant's telephone number, including area code: (952 ) 888-8801
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On June 4, 2026, The Toro Company announced its financial results for the three and six month periods ended May 1, 2026.
Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of The Toro Company’s press release in connection with the announcement. The information in this Item 2.02, including the exhibit attached hereto, is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | ||||
99.1 | Press release dated June 4, 2026 (furnished herewith). | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE TORO COMPANY | |||||
| (Registrant) | |||||
| Date: June 4, 2026 | /s/ Angela C. Drake | ||||
| Angela C. Drake | |||||
| Vice President and Chief Financial Officer | |||||
Investor Relations
Heather Hille
Vice President, Corporate Affairs and Investor Relations
(952) 887-8923, heather.hille@toro.com
Media Relations
Branden Happel
Senior Manager, Public Relations
(952) 887-8930, branden.happel@toro.com
For Immediate Release
The Toro Company Reports Strong Second-Quarter Results Driven by Broad-Based Customer Demand and Margin Improvement
Exceeds second-quarter expectations and raises full-year guidance
•Net sales up 8.1% year-over-year to $1.42 billion
•Reported EPS up 9.5% year-over-year to $1.50
•*Adjusted EPS up 12.7% year-over-year to $1.60
•Returned $228 million to shareholders
BLOOMINGTON, Minn.—(BUSINESS WIRE) — June 4, 2026—The Toro Company (NYSE: TTC), a leading global provider of solutions for the outdoor environment, today reported results for its fiscal second-quarter ended May 1, 2026.
"We grew adjusted earnings per share by double-digits once again in the second quarter. This was driven by strong demand across our portfolio and continued margin expansion from operational execution,” said Richard M. Olson, chairman and chief executive officer. “The strength of our portfolio is based in the quality and performance of our products in attractive end markets which drives demand and ultimately the strong financial results delivered by the team in the second quarter. Combined with disciplined working capital management, this execution also supported another quarter of robust free cash flow and value creation for our shareholders through dividends and share repurchases.”
OUTLOOK
“The focus on our key strategic priorities to accelerate profitable growth, drive operational excellence, and empower people is driving results. Importantly, the team achieved these results despite macroeconomic and geopolitical headwinds and increasing inflationary pressures. We continue to capitalize on market opportunities in underground construction, landscape contractor and golf, while successfully executing our margin improvement initiatives. This performance gives us the confidence to raise our full-year guidance, while also reflecting the persistent and dynamic inflationary environment.”
The company is raising its full-year net sales and *adjusted EPS guidance and now expects total company net sales growth in the range of 4.0% to 6.5%, up from the previous range of 3.0% to 6.5%, and *adjusted EPS in the range of $4.50 to $4.62, up from the previous range of $4.40 to $4.60.
SECOND-QUARTER FISCAL 2026 FINANCIAL HIGHLIGHTS
| Reported | Adjusted* | |||||||||||||||||||||||||||||||||||||
| (dollars in millions, except per share data) | F26 Q2 | F25 Q2 | % Change | F26 Q2 | F25 Q2 | % Change | ||||||||||||||||||||||||||||||||
| Net Sales | $ | 1,424.7 | $ | 1,317.9 | 8.1 | % | $ | 1,424.7 | $ | 1,317.9 | 8.1 | % | ||||||||||||||||||||||||||
| Net Earnings | $ | 145.4 | $ | 136.8 | 6.3 | % | $ | 155.4 | $ | 141.8 | 9.6 | % | ||||||||||||||||||||||||||
| Diluted EPS | $ | 1.50 | $ | 1.37 | 9.5 | % | $ | 1.60 | $ | 1.42 | 12.7 | % | ||||||||||||||||||||||||||
SECOND-QUARTER FISCAL 2026 SEGMENT RESULTS
Professional Segment
•Professional segment net sales for the second quarter were $1,106.6 million, up 9.1% from $1,014.1 million in the same period last year. The increase was driven primarily by net price realization, the Tornado acquisition, and higher shipments of underground construction equipment and zero-turn mowers.
•Professional segment earnings for the second quarter were $224.4 million, up from $202.1 million in the same period last year, and when expressed as a percentage of net sales, 20.3%, up from 19.9% in the prior-year period. The increase in profitability was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by higher material, manufacturing, and freight costs, as well as product mix.
Residential Segment
•Residential segment net sales for the second quarter were $310.4 million, up 4.4% from $297.40 million in the same period last year. The increase was primarily driven by net price realization and higher shipments of zero-turn mowers, partially offset by lower shipments of snow products.
•Residential segment earnings for the second quarter were $30.3 million, up from $16.10 million in the same period last year, and when expressed as a percentage of net sales, 9.8%, up from 5.4% in the prior-year period. The increase was largely driven by net price realization, productivity improvements, prior year inventory valuation adjustments that did not recur, cost savings measures, and net sales leverage, partially offset by higher material, manufacturing, and freight costs.
OPERATING RESULTS
Gross margin and *adjusted gross margin for the second quarter were 33.9% and 34.5%, respectively, up from 33.1% and 33.4%, respectively, in the same prior-year period. The change in gross margin was primarily due to net price realization and productivity improvements, partially offset by higher material, manufacturing, and freight costs, as well as product mix.
SG&A expense as a percentage of net sales for the second quarter was 20.2%, compared with 19.8% in the prior-year period, primarily driven by higher warranty and incentive expenses, partially offset by net sales leverage and lower warehousing costs.
Operating earnings as a percentage of net sales were 13.7% for the second quarter, compared with 13.3% in the same prior-year period. *Adjusted operating earnings as a percentage of net sales for the second quarter were 14.4%, compared with 13.7% in the same prior-year period.
Interest expense was $14.8 million for the second quarter, down $1.0 million from the same prior-year period. This decrease was primarily due to lower average interest rates and lower average outstanding borrowings.
The reported effective tax rate for the second quarter was 20.7%, compared with 18.9% in the same prior-year period. The *adjusted effective tax rate for the second quarter was 21.7% compared with 18.7% in the same prior-year period. The increase in both the reported and adjusted effective tax rate was primarily due to a less favorable geographic mix of earnings.
*Non-GAAP financial measure. Please refer to the “Use of Non-GAAP Financial Information” for details regarding these measures, as well as the tables provided for a reconciliation of historical non-GAAP financial measures to the most comparable GAAP measures.
LIVE CONFERENCE CALL
June 4, 2026 at 10:00a.m. CT
www.thetorocompany.com/invest
The Toro Company will conduct its earnings call and webcast for investors beginning at 10:00a.m. CT on June 4, 2026. The webcast will be available at www.thetorocompany.com/invest. Webcast participants will need to complete a brief registration form and should allocate extra time before the webcast begins to register and, if necessary, install audio software.
About The Toro Company
The Toro Company (NYSE: TTC) is a leading global provider of solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground construction, rental and specialty construction, and irrigation and outdoor lighting solutions. With net sales of $4.5 billion in fiscal 2025, The Toro Company’s global presence extends to more than 125 countries through a family of brands that includes Toro, Ditch Witch, Exmark, BOSS, Ventrac, Tornado, HammerHead, American Augers, Spartan, Subsite, Radius, Hayter, Perrot, Unique Lighting Systems, Irritrol, and Lawn-Boy. Through constant innovation and caring relationships built on trust and integrity, The Toro Company and its family of brands have built a legacy of excellence by helping customers work on golf courses, sports fields, construction sites, public green spaces, commercial and residential properties and agricultural operations. For more information, visit www.thetorocompany.com.
Use of Non-GAAP Financial Information
This press release and the related earnings call reference certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures included within this press release and the related earnings call that are utilized as measures of the company’s operating performance consist of gross profit, gross margin, operating earnings, earnings before income taxes, net earnings, diluted EPS, and the effective tax rate, each as adjusted. The non-GAAP financial measures included within this press release and the related earnings call that are utilized as measures of the company’s liquidity consist of free cash flow and free cash flow conversion percentage.
The Toro Company uses these non-GAAP financial measures in making operating decisions and assessing liquidity because it believes these non-GAAP financial measures provide meaningful supplemental information regarding core operational performance and cash flows, as a measure of the company's liquidity, and provide the company with a better understanding of how to allocate resources to both ongoing and prospective business initiatives. Additionally, these non-GAAP financial measures facilitate the company's internal comparisons for both historical operating results and competitors' operating results by factoring out potential differences caused by charges and benefits not related to its regular, ongoing business, including, without limitation, certain non-cash, large, and/or unpredictable charges and benefits; acquisitions and dispositions; legal judgments, settlements, or other matters; and tax positions. The company believes that these non-GAAP financial measures, when considered in conjunction with the financial measures prepared in accordance with U.S. GAAP, provide investors with useful supplemental financial information to better understand its core operational performance and cash flows.
Reconciliations of historical non-GAAP financial measures to the most comparable U.S. GAAP financial measures are included in the financial tables contained in this press release. These non-GAAP financial measures, however, should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the U.S. GAAP financial measures included within this press release and the company’s related earnings call. These non-GAAP financial measures may differ from similar measures used by other companies.
The Toro Company does not provide a quantitative reconciliation of the company’s projected range for adjusted diluted EPS for fiscal 2026 to diluted EPS, which is the most directly comparable GAAP measure, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The company’s adjusted diluted EPS guidance for fiscal 2026 excludes certain items that are inherently uncertain and difficult to predict, including certain non-cash, large and/or unpredictable charges and benefits; acquisitions and
dispositions; legal judgments, settlements, or other matters; and tax positions. Due to the uncertainty of the amount or timing of these future excluded items, management does not forecast them for internal use and therefore cannot create a quantitative adjusted diluted EPS for fiscal 2026 to diluted EPS reconciliation without unreasonable efforts. A quantitative reconciliation of adjusted diluted EPS for fiscal 2026 to diluted EPS would imply a degree of precision and certainty as to these future items that does not exist and could be confusing to investors. From a qualitative perspective, it is anticipated that the differences between adjusted diluted EPS for fiscal 2026 to diluted EPS will consist of items similar to those described in the financial tables later in this release, including, for example and without limitation, certain non-cash, large, and/or unpredictable charges and benefits; acquisitions and dispositions; legal judgments, settlements, or other matters; and tax positions. The timing and amount of any of these excluded items could significantly impact the company’s diluted EPS for a particular period.
Forward-Looking Statements
This news release contains forward-looking statements, which are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current assumptions and expectations of future events, and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “goal,” “optimistic,” “encourage,” “anticipate,” “continue,” “plan,” “estimate,” “project,” “target,” “improve,” “believe,” “become,” “should,” “could,” “will,” “would,” “possible,” "remain," “promise,” “may,” “likely,” “intend,” “can,” “seek,” “pursue,” “potential,” variations of such words or the negative thereof, and similar expressions or future dates. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Forward-looking statements in this release include the company’s fiscal 2026 financial guidance, expectations regarding demand trends, our recent strategic acquisition, and the success of new products, supply chain stabilization and AMP, and other statements made under the "Outlook" section of this release. Particular risks and uncertainties that may affect the company’s operating results or financial position or cause actual events and results to differ materially from those projected or implied include: adverse worldwide economic conditions, including inflationary pressures and higher interest rates; the effect of abnormal weather patterns; customer, government and municipal revenue, budget spending levels and cash conservation efforts; loss of any substantial customer or strategic partnership; inventory adjustments or changes in purchasing patterns by customers; fluctuations in the cost and availability of commodities, components, parts, and accessories, including steel, engines, hydraulics, and resins; disruption at or in proximity to its facilities or in its manufacturing or other operations, or those in its distribution channel customers, mass retailers or home centers where its products are sold, or suppliers; risks associated with acquisitions and dispositions, including the company's recent acquisition of Tornado Infrastructure Equipment Ltd. and possible additional future impairment of goodwill or other intangible assets; impacts AMP and any future restructuring activities or productivity or cost savings initiatives; the effect of natural disasters, social unrest, war and global pandemics; the level of growth or contraction in its key markets; the company’s ability to develop and achieve market acceptance for new products; increased competition; the risks attendant to international relations, operations and markets; foreign currency exchange rate fluctuations; financial viability of and/or relationships with the company’s distribution channel partners; management of strategic partnerships, key customer relationships, alliances or joint ventures, including Red Iron Acceptance, LLC; impact of laws, regulations and standards, consumer product safety, accounting, taxation, trade, tariffs and/or antidumping and countervailing duties petitions, healthcare, and environmental, health and safety matters; unforeseen product quality problems; loss of or changes in executive management or key employees; the occurrence of litigation or claims, including those involving intellectual property or product liability matters; impact of increased scrutiny on its environmental, social, and governance practices; and other risks and uncertainties described in the company’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. The company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date any forward-looking statement is made.
(Financial tables follow)
THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings (Unaudited)
(Dollars and shares in millions, except per-share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| May 1, 2026 | May 2, 2025 | May 1, 2026 | May 2, 2025 | ||||||||||||||||||||
| Net sales | $ | 1,424.7 | $ | 1,317.9 | $ | 2,461.0 | $ | 2,312.9 | |||||||||||||||
| Cost of sales | 942.0 | 881.2 | 1,641.8 | 1,540.6 | |||||||||||||||||||
| Gross profit | 482.7 | 436.7 | 819.2 | 772.3 | |||||||||||||||||||
| Gross margin | 33.9 | % | 33.1 | % | 33.3 | % | 33.4 | % | |||||||||||||||
| Selling, general and administrative expense | 287.7 | 261.9 | 537.1 | 519.7 | |||||||||||||||||||
| Operating earnings | 195.0 | 174.8 | 282.1 | 252.6 | |||||||||||||||||||
| Interest expense | (14.8) | (15.8) | (29.0) | (30.8) | |||||||||||||||||||
| Other income, net | 3.2 | 9.7 | 17.2 | 13.0 | |||||||||||||||||||
| Earnings before income taxes | 183.4 | 168.7 | 270.3 | 234.8 | |||||||||||||||||||
| Income tax provision | 38.0 | 31.9 | 57.0 | 45.2 | |||||||||||||||||||
| Net earnings | $ | 145.4 | $ | 136.8 | $ | 213.3 | $ | 189.6 | |||||||||||||||
| Basic net earnings per share of common stock | $ | 1.51 | $ | 1.37 | $ | 2.19 | $ | 1.88 | |||||||||||||||
| Diluted net earnings per share of common stock | $ | 1.50 | $ | 1.37 | $ | 2.18 | $ | 1.88 | |||||||||||||||
| Weighted-average number of shares of common stock outstanding — Basic | 96.6 | 99.8 | 97.3 | 100.6 | |||||||||||||||||||
| Weighted-average number of shares of common stock outstanding — Diluted | 97.1 | 100.1 | 97.7 | 100.9 | |||||||||||||||||||
Segment Data (Unaudited)
(Dollars in millions)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| Segment net sales | May 1, 2026 | May 2, 2025 | May 1, 2026 | May 2, 2025 | |||||||||||||||||||
| Professional | $ | 1,106.6 | $ | 1,014.1 | $ | 1,930.6 | $ | 1,782.9 | |||||||||||||||
| Residential | 310.4 | 297.4 | 516.4 | 518.4 | |||||||||||||||||||
| Other | 7.7 | 6.4 | 14.0 | 11.6 | |||||||||||||||||||
| Total net sales* | $ | 1,424.7 | $ | 1,317.9 | $ | 2,461.0 | $ | 2,312.9 | |||||||||||||||
| *Includes international net sales of: | $ | 278.8 | $ | 255.6 | $ | 466.3 | $ | 467.0 | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| Segment earnings (loss) before interest and taxes | May 1, 2026 | May 2, 2025 | May 1, 2026 | May 2, 2025 | |||||||||||||||||||
| Professional | $ | 224.4 | $ | 202.1 | $ | 362.0 | $ | 329.3 | |||||||||||||||
| Residential | 30.3 | 16.1 | 43.5 | 33.3 | |||||||||||||||||||
| Other | (56.5) | (33.7) | (106.2) | (97.0) | |||||||||||||||||||
| Total segment earnings before interest and taxes | $ | 198.2 | $ | 184.5 | $ | 299.3 | $ | 265.6 | |||||||||||||||
THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in millions)
| May 1, 2026 | May 2, 2025 | October 31, 2025 | ||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 180.4 | $ | 176.5 | $ | 341.0 | ||||||||||||||
| Receivables, net | 575.1 | 602.5 | 378.2 | |||||||||||||||||
| Inventories, net | 923.4 | 1,119.8 | 920.8 | |||||||||||||||||
| Prepaid expenses and other current assets | 81.3 | 80.1 | 65.1 | |||||||||||||||||
| Total current assets | 1,760.2 | 1,978.9 | 1,705.1 | |||||||||||||||||
| Property, plant, and equipment, net | 623.0 | 635.8 | 615.8 | |||||||||||||||||
| Goodwill | 591.0 | 450.8 | 450.9 | |||||||||||||||||
| Other intangible assets, net | 433.8 | 487.3 | 390.3 | |||||||||||||||||
| Right-of-use assets | 115.7 | 110.9 | 114.7 | |||||||||||||||||
| Investment in finance affiliate | 45.0 | 51.2 | 41.0 | |||||||||||||||||
| Deferred income taxes | 120.7 | 58.6 | 105.8 | |||||||||||||||||
| Other assets | 17.2 | 14.6 | 15.2 | |||||||||||||||||
| Total assets | $ | 3,706.6 | $ | 3,788.1 | $ | 3,438.8 | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Current portion of long-term debt and short-term borrowings | $ | — | $ | 20.0 | $ | — | ||||||||||||||
| Accounts payable | 551.8 | 516.0 | 367.6 | |||||||||||||||||
| Accrued liabilities | 559.2 | 536.7 | 525.5 | |||||||||||||||||
| Short-term lease liabilities | 20.2 | 18.5 | 19.3 | |||||||||||||||||
| Total current liabilities | 1,131.2 | 1,091.2 | 912.4 | |||||||||||||||||
| Long-term debt, less current portion | 1,016.8 | 1,077.1 | 921.5 | |||||||||||||||||
| Long-term lease liabilities | 100.0 | 96.2 | 100.3 | |||||||||||||||||
| Deferred income taxes | 19.9 | 0.6 | 0.8 | |||||||||||||||||
| Other long-term liabilities | 70.6 | 46.4 | 50.5 | |||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||
Common stock1 | 1.0 | 99.0 | 97.9 | |||||||||||||||||
| Retained earnings | 1,386.2 | 1,419.6 | 1,390.5 | |||||||||||||||||
| Accumulated other comprehensive loss | (19.1) | (42.0) | (35.1) | |||||||||||||||||
| Total stockholders’ equity | 1,368.1 | 1,476.6 | 1,453.3 | |||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,706.6 | $ | 3,788.1 | $ | 3,438.8 | ||||||||||||||
1 During the company’s second quarter ended May 1, 2026 the company amended its certificate of incorporation to change the par value of its preferred and common stock from $1.00 per share to $0.01 per share. This change has been adopted prospectively.
THE TORO COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
| Six Months Ended | ||||||||||||||
| May 1, 2026 | May 2, 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net earnings | $ | 213.3 | $ | 189.6 | ||||||||||
| Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||||||||
| Non-cash income from finance affiliate | (7.8) | (9.8) | ||||||||||||
| Distributions from finance affiliate, net | 3.8 | 7.8 | ||||||||||||
| Depreciation of property, plant, and equipment | 48.9 | 48.0 | ||||||||||||
| Amortization of other intangible assets | 21.1 | 15.6 | ||||||||||||
| Stock-based compensation expense | 12.5 | 9.8 | ||||||||||||
Deferred income taxes1 | (13.3) | (11.9) | ||||||||||||
| Other | (3.4) | 0.9 | ||||||||||||
| Changes in operating assets and liabilities, net of the effect of acquisitions: | ||||||||||||||
| Receivables, net | (189.5) | (141.6) | ||||||||||||
| Inventories, net | 37.7 | (78.7) | ||||||||||||
Other assets1 | 6.2 | 63.2 | ||||||||||||
| Accounts payable | 166.3 | 59.5 | ||||||||||||
Other liabilities1 | (2.3) | (29.3) | ||||||||||||
| Net cash provided by operating activities | 293.5 | 123.1 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchases of property, plant, and equipment | (28.0) | (38.4) | ||||||||||||
| Proceeds from sales of property, plant, and equipment | 11.6 | 0.2 | ||||||||||||
| Acquisitions, net of cash received | (210.3) | (4.2) | ||||||||||||
| Net cash used in investing activities | (226.7) | (42.4) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
Borrowings under debt arrangements1 | 350.0 | 740.0 | ||||||||||||
Repayments under debt arrangements1 | (255.0) | (565.0) | ||||||||||||
| Proceeds from exercise of stock options | 37.4 | 1.3 | ||||||||||||
| Payments of withholding taxes for stock awards | (1.2) | (1.8) | ||||||||||||
| Common stock repurchases | (285.1) | (200.0) | ||||||||||||
| Dividends paid on common stock | (75.8) | (76.3) | ||||||||||||
| Other | (2.7) | (3.1) | ||||||||||||
| Net cash used in financing activities | (232.4) | (104.9) | ||||||||||||
| Effect of exchange rates on cash and cash equivalents | 5.0 | 1.2 | ||||||||||||
| Net decrease in cash and cash equivalents | (160.6) | (23.0) | ||||||||||||
| Cash and cash equivalents as of the beginning of the fiscal period | 341.0 | 199.5 | ||||||||||||
| Cash and cash equivalents as of the end of the fiscal period | $ | 180.4 | $ | 176.5 | ||||||||||
1 Presentation of prior year deferred income taxes has been conformed to the current year presentation. There was no change to net cash used in operating activities.
THE TORO COMPANY AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(Dollars in millions, except per-share data)
The following tables provide a reconciliation of the non-GAAP financial performance measures used in this press release and our related earnings call to the most directly comparable measures calculated and reported in accordance with U.S. GAAP for the three and six month periods ended May 1, 2026 and May 2, 2025:
Adjusted Profit & Loss Statement
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| May 1, 2026 | May 2, 2025 | May 1, 2026 | May 2, 2025 | |||||||||||||||||||||||
| Gross profit | $ | 482.7 | $ | 436.7 | $ | 819.2 | $ | 772.3 | ||||||||||||||||||
Acquisition-related costs1 | 2.4 | — | 4.1 | — | ||||||||||||||||||||||
Productivity initiative2 | 7.0 | 3.7 | 15.4 | 7.5 | ||||||||||||||||||||||
| Adjusted gross profit | $ | 492.1 | $ | 440.4 | $ | 838.7 | $ | 779.8 | ||||||||||||||||||
| Gross margin | 33.9 | % | 33.1 | % | 33.3 | % | 33.4 | % | ||||||||||||||||||
Acquisition-related costs1 | 0.1 | % | — | % | 0.2 | % | — | % | ||||||||||||||||||
Productivity initiative2 | 0.5 | % | 0.3 | % | 0.6 | % | 0.3 | % | ||||||||||||||||||
| Adjusted gross margin | 34.5 | % | 33.4 | % | 34.1 | % | 33.7 | % | ||||||||||||||||||
| Operating earnings | $ | 195.0 | $ | 174.8 | $ | 282.1 | $ | 252.6 | ||||||||||||||||||
Acquisition-related costs1 | 3.5 | — | 5.7 | — | ||||||||||||||||||||||
Productivity initiative2 | 7.3 | 5.6 | 19.7 | 21.8 | ||||||||||||||||||||||
| Adjusted operating earnings | $ | 205.8 | $ | 180.4 | $ | 307.5 | $ | 274.4 | ||||||||||||||||||
| Operating earnings margin | 13.7 | % | 13.3 | % | 11.5 | % | 10.9 | % | ||||||||||||||||||
Acquisition-related costs1 | 0.2 | % | — | % | 0.2 | % | — | % | ||||||||||||||||||
Productivity initiative2 | 0.5 | % | 0.4 | % | 0.8 | % | 1.0 | % | ||||||||||||||||||
| Adjusted operating earnings margin | 14.4 | % | 13.7 | % | 12.5 | % | 11.9 | % | ||||||||||||||||||
| Earnings before income taxes | $ | 183.4 | $ | 168.7 | $ | 270.3 | $ | 234.8 | ||||||||||||||||||
Acquisition-related costs1 | 3.5 | — | 5.7 | — | ||||||||||||||||||||||
Productivity initiative2 | 11.5 | 5.7 | 14.9 | 22.2 | ||||||||||||||||||||||
| Adjusted earnings before income taxes | $ | 198.4 | $ | 174.4 | $ | 290.9 | $ | 257.0 | ||||||||||||||||||
| Income tax provision | $ | 38.0 | $ | 31.9 | $ | 57.0 | $ | 45.2 | ||||||||||||||||||
Acquisition-related costs1 | 0.7 | — | 1.2 | — | ||||||||||||||||||||||
Productivity initiative2 | 2.5 | 0.9 | 3.2 | 4.2 | ||||||||||||||||||||||
Tax impact of share-based compensation3 | 1.8 | (0.2) | 1.5 | (0.1) | ||||||||||||||||||||||
| Adjusted income tax provision | 43.0 | 32.6 | 62.9 | 49.3 | ||||||||||||||||||||||
| Net earnings | $ | 145.4 | $ | 136.8 | $ | 213.3 | $ | 189.6 | ||||||||||||||||||
Acquisition-related costs, net of tax1 | 2.8 | — | 4.5 | — | ||||||||||||||||||||||
Productivity initiative, net of tax2 | 9.0 | 4.8 | 11.7 | 18.0 | ||||||||||||||||||||||
Tax impact of share-based compensation3 | (1.8) | 0.2 | (1.5) | 0.1 | ||||||||||||||||||||||
| Adjusted net earnings | $ | 155.4 | $ | 141.8 | $ | 228.0 | $ | 207.7 | ||||||||||||||||||
| Net earnings per diluted share | $ | 1.50 | $ | 1.37 | $ | 2.18 | $ | 1.88 | ||||||||||||||||||
Acquisition-related costs, net of tax1 | 0.03 | — | 0.05 | — | ||||||||||||||||||||||
Productivity initiative, net of tax2 | 0.09 | 0.05 | 0.12 | 0.18 | ||||||||||||||||||||||
Tax impact of share-based compensation3 | (0.02) | — | (0.02) | — | ||||||||||||||||||||||
| Adjusted net earnings per diluted share | $ | 1.60 | $ | 1.42 | $ | 2.33 | $ | 2.06 | ||||||||||||||||||
| Effective tax rate | 20.7 | % | 18.9 | % | 21.1 | % | 19.3 | % | ||||||||||||||||||
Productivity initiative1 | — | % | (0.1) | % | — | % | — | % | ||||||||||||||||||
Tax impact of share-based compensation3 | 1.0 | % | (0.1) | % | 0.5 | % | (0.1) | % | ||||||||||||||||||
| Adjusted effective tax rate | 21.7 | % | 18.7 | % | 21.6 | % | 19.2 | % | ||||||||||||||||||
1 On December 8, 2025, the company completed the acquisition of Tornado Infrastructure Equipment. Acquisition-related costs for the three and six month periods ended May 1, 2026 represent integration costs and amortization of the backlog intangible asset resulting from purchase accounting adjustments.
2 In the first quarter of fiscal 2024, the company launched the "Amplifying Maximum Productivity" or AMP initiative. The company considered the nature, frequency, and scale of this initiative compared to prior productivity initiatives when determining that the expenses associated with AMP, unlike prior productivity initiatives, are not common, normal, recurring operating expenses and are not representative of the company's ongoing business operations. Productivity initiative charges for the three and six month periods ended May 1, 2026 and May 2, 2025 primarily represent facility exit-related costs and gains, severance and termination benefits, compensation for fully-dedicated AMP personnel, third-party consulting costs, and product-line exit costs.
3 The accounting standards codification guidance governing employee stock-based compensation requires that any excess or deficient tax deduction for stock-based compensation be immediately recorded within income tax expense. Employee stock-based compensation activity, including the exercise of stock options, can be unpredictable and can significantly impact our net earnings, net earnings per diluted share, and effective tax rate. These amounts represent the discrete tax benefits recorded as excess tax deductions for stock-based compensation during the three and six month periods ended May 1, 2026 and May 2, 2025.
Organic Sales Growth
| Three Months Ended May 1, 2026 | ||||||||||||||||||||||||||
| (Percentage change versus the prior year period) | Reported (GAAP) Net Sales Growth | Acquisitions & Divestitures | Foreign Exchange Impact1 | Organic Sales Growth/ (Decrease) (Non-GAAP) | ||||||||||||||||||||||
| Professional | 9.1 | % | (2.4) | % | (0.7) | % | 6.0 | % | ||||||||||||||||||
| Residential | 4.4 | % | — | % | (0.3) | % | 4.1 | % | ||||||||||||||||||
| Other | 20.3 | % | — | % | — | % | 20.3 | % | ||||||||||||||||||
| Total | 8.1 | % | (1.8) | % | (0.6) | % | 5.7 | % | ||||||||||||||||||
1The foreign exchange impact to sales growth measures the change in sales between current and prior year periods using constant exchange rates.
| Six Months Ended May 1, 2026 | ||||||||||||||||||||||||||
| (Percentage change versus the prior year period) | Reported (GAAP) Net Sales Growth | Acquisitions & Divestitures | Foreign Exchange Impact1 | Organic Sales Growth/ (Decrease) (Non-GAAP) | ||||||||||||||||||||||
| Professional | 8.3 | % | (2.3) | % | (0.6) | % | 5.4 | % | ||||||||||||||||||
| Residential | (0.4) | % | — | % | (0.3) | % | (0.7) | % | ||||||||||||||||||
| Other | 20.7 | % | — | % | — | % | 20.7 | % | ||||||||||||||||||
| Total | 6.4 | % | (1.8) | % | (0.5) | % | 4.1 | % | ||||||||||||||||||
1The foreign exchange impact to sales growth measures the change in sales between current and prior year periods using constant exchange rates.
| Three Months Ended May 2, 2025 | ||||||||||||||||||||||||||
| (Percentage change versus the prior year period) | Reported (GAAP) Net Sales Growth | Acquisitions & Divestitures | Foreign Exchange Impact1 | Organic Sales Growth/ (Decrease) (Non-GAAP) | ||||||||||||||||||||||
| Professional | 0.8 | % | 0.2 | % | 0.2 | % | 1.2 | % | ||||||||||||||||||
| Residential | (11.4) | % | 1.4 | % | 0.2 | % | (9.8) | % | ||||||||||||||||||
| Other | (17.9) | % | — | % | — | % | (17.9) | % | ||||||||||||||||||
| Total | (2.3) | % | 0.5 | % | 0.2 | % | (1.6) | % | ||||||||||||||||||
1The foreign exchange impact to sales growth measures the change in sales between current and prior year periods using constant exchange rates.
| Six Months Ended May 2, 2025 | ||||||||||||||||||||||||||
| (Percentage change versus the prior year period) | Reported (GAAP) Net Sales Growth | Acquisitions & Divestitures | Foreign Exchange Impact1 | Organic Sales Growth/ (Decrease) (Non-GAAP) | ||||||||||||||||||||||
| Professional | 1.2 | % | 0.1 | % | 0.3 | % | 1.6 | % | ||||||||||||||||||
| Residential | (10.0) | % | 2.1 | % | 0.2 | % | (7.7) | % | ||||||||||||||||||
| Other | (11.5) | % | — | % | — | % | (11.5) | % | ||||||||||||||||||
| Total | (1.6) | % | 0.6 | % | 0.2 | % | (0.8) | % | ||||||||||||||||||
1The foreign exchange impact to sales growth measures the change in sales between current and prior year periods using constant exchange rates.
Reconciliation of Non-GAAP Liquidity Measures
The company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. Free cash flow conversion percentage represents free cash flow as a percentage of net earnings. The company considers free cash flow and free cash flow conversion percentage to be non-GAAP liquidity measures that provide useful information to management and investors about the company's ability to convert net earnings into cash resources that can be used to pursue opportunities to enhance shareholder value, fund ongoing and prospective business initiatives, and strengthen the company's Consolidated Balance Sheets, after reinvesting in necessary capital expenditures required to maintain and grow the company's business. The following table provides a reconciliation of non-GAAP free cash flow and free cash flow conversion percentage to net cash provided by operating activities, which is the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, for the six month periods ended May 1, 2026 and May 2, 2025:
| Six Months Ended | ||||||||||||||
| (Dollars in millions) | May 1, 2026 | May 2, 2025 | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 293.5 | $ | 123.1 | ||||||||||
| Less: Purchases of property, plant and equipment | 28.0 | 38.4 | ||||||||||||
| Free cash flow | 265.5 | 84.7 | ||||||||||||
| Net earnings | $ | 213.3 | $ | 189.6 | ||||||||||
| Free cash flow conversion percentage | 124.5 | % | 44.7 | % | ||||||||||
###
FAQ
How did The Toro Company (TTC) perform in its fiscal Q2 2026?
The Toro Company delivered strong fiscal Q2 2026 results, with net sales rising 8.1% to $1.42 billion and diluted EPS increasing to $1.50 from $1.37. Adjusted diluted EPS grew 12.7% to $1.60, driven by broad-based demand and margin expansion.
What guidance did The Toro Company (TTC) provide for fiscal 2026?
Toro raised its fiscal 2026 outlook, now expecting total company net sales growth of 4.0%–6.5% and adjusted EPS of $4.50–$4.62. This updated guidance is higher than the previous $4.40–$4.60 adjusted EPS range and reflects continued confidence in demand and productivity initiatives.
How did Toro’s Professional and Residential segments perform in Q2 2026?
In Q2 2026, the Professional segment’s net sales increased to $1,106.6 million, up 9.1%, with earnings margin improving to 20.3%. The Residential segment’s net sales grew 4.4% to $310.4 million, while segment earnings rose to $30.3 million, lifting margin to 9.8% from 5.4%.
What was The Toro Company’s free cash flow and conversion in the first half of 2026?
For the six months ended May 1, 2026, Toro generated $293.5 million in net cash from operating activities and spent $28.0 million on capital expenditures, resulting in free cash flow of $265.5 million. This represents a free cash flow conversion percentage of 124.5% of net earnings.
What non-GAAP measures does The Toro Company emphasize in this report?
Toro highlights several non-GAAP measures, including adjusted gross profit, adjusted operating earnings, adjusted net earnings, adjusted EPS, and free cash flow. Management uses these to assess core operating performance and liquidity, excluding acquisition-related costs, AMP productivity initiative charges, and discrete tax impacts.
How did Toro’s acquisition of Tornado affect Q2 2026 results?
The recent acquisition of Tornado Infrastructure Equipment contributed to Professional segment growth and added acquisition-related costs. For Q2 2026, Toro recorded $3.5 million of acquisition-related costs and $2.4 million in related gross profit adjustments, which are excluded from its adjusted non-GAAP metrics.