Toro records record quarterly earnings despite sales slip

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.

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