Toro misses on sales but beats on profit, and raises full-year outlook


Shares of Toro Co. TTC, -1.82% were little changed in premarket trading Thursday, after the lawn care equipment company reported fiscal second-quarter sales that missed expectations, while profit topped forecasts and the full-year outlook was raised, as supply chain challenges affected the company’s ability to meet strong demand. Net earnings for the quarter to April 29 fell to $131.1 million, or $1.24 a share, from $142.2 million, or $1.31 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.25 was just above the FactSet consensus of $1.24. Sales grew 8.7% to $1.25 billion, below the FactSet consensus of $1.27 billion. Growth in cost of sales outpaced sales growth, rising 13.1% to $844.1 million as gross margin contracted to 32.4% from 35.1%. “Based on our operational progress, we have gained confidence heading into the remainder of the year, and as a result have increased guidance,” said Chief Executive Richard Olson. The company raised its guidance ranges for adjusted EPS to $4.00 to $4.15 from $3.90 to $4.10 and for sales growth to 14% to 16% from 12% to 14%. The stock has dropped 18.9% year to date through Wednesday, while the S&P 500 SPX, -0.75% has lost 14.0%.

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