Minnesota's lush lawns have not been shared by other regions of the country this summer, cutting into Toro Co.'s sales.
The Bloomington-based company on Thursday reported record earnings for the third quarter but said sales slid 1.4 percent from the same period a year ago.
Weather and currency translations cut into the results, the company said. Sales were $601 million, while analysts were expecting $624 million.
Net income was $55.8 million, or $1 per share, above analysts' expectations and up from $53.3 million, or 94 cents a share, in last year's third quarter.
Unfavorable weather conditions in many regions put a damper on the sales of some residential mower products across the industry. Toro's residential sales were down 4.6 percent to $167.8 million.
Sales in the larger professional segment were more favorable, up 1.4 percent in the quarter to $427.8 million, aided by the successful introduction of products. Earnings for the professional segment were $89.1 million, up 8.3 percent over the same period a year ago.
The company narrowed its earnings outlook for the remainder of the fiscal year. It is now expecting full-year earnings in the $3.95 to $4 range and trimmed revenue guidance and now expects sales to be flat to up 1 percent.
CEO Mike Hoffman ended his conference call with analysts Thursday and noted it would be the last earnings call he would lead. Last month, the company announced that President and Chief Operating Officer Rick Olson would succeed Hoffman on Nov. 1.
Pete Johnson, vice president with St. Paul-based investment firm Mairs & Power, has covered Toro for the last five years and spoke highly of Hoffman's tenure as CEO.
"We'll miss Mike a lot," Johnson said. "But part of Mike's legacy is that he's developed a deep bench [of management talent] and cultivated it through the years."
The company also announced a two-for-one stock split, which will be distributed on Sept. 16 to shareholders of record on Sept. 1. The last time Toro had a stock split was in 2012. Toro's shares, which have been trading near record highs for weeks, closed at $93.73, down 16 cents.
Patrick Kennedy • 612-673-7926
