Abstract
Toro will report fiscal Q4 2025 results on December 17, 2025 Pre-Market. Consensus points to softer revenue and earnings with pressure in core Professional channels and uneven Residential sell-through, while investors look for margin resilience and cash generation ahead of 2026.
Market Forecast
The market’s current view anticipates Toro’s fiscal Q4 revenue at USD 1.05 billion with year-over-year decline of 03.84%, forecast gross profit margin near last quarter’s 34.39%, net profit margin tracking low-single digits, and adjusted EPS of USD 0.87 with year-over-year decline of 08.78%. The main business is expected to show muted momentum as Professional channels normalize inventory and end-markets remain mixed, with outlook hinging on order cadence in landscape contractor and golf. The most promising segment is slated within the Professional portfolio, projected revenue of USD 930.80 million last quarter and resilient demand in turf equipment, though year-over-year comparisons suggest caution.
Last Quarter Review
Toro’s previous quarter posted revenue of USD 1.13 billion, gross profit margin of 34.39%, GAAP net profit attributable to the parent company of USD 53.50 million, net profit margin of 04.73%, and adjusted EPS of USD 1.24 with year-over-year increase of 05.09%. A key highlight was disciplined cost control that supported margins despite modest top-line contraction and a slight EBIT miss relative to estimates. Main business highlights included Professional revenue of USD 930.80 million and Residential revenue of USD 192.80 million, while Other contributed USD 7.70 million; year-over-year growth was negative at the consolidated level, reflecting channel destocking and cautious consumer trends.
Current Quarter Outlook
Main Business Dynamics
The core of Toro’s results will again be driven by the Professional division, which accounted for USD 930.80 million last quarter, reflecting roughly four-fifths of company sales. Into fiscal Q4, the segment’s momentum will depend on order patterns from landscape contractors, golf course superintendents, and institutional customers. The forecasted EBIT of USD 114.23 million and revenue of USD 1.05 billion imply that pricing discipline and product mix must offset volume softness to preserve margins. Gross profit margin near mid-30% hinges on cost containment, supply chain stability, and selective promotional activity in channel inventories. Management’s ability to align production with sell-through and avoid excess stock will be central to protecting net profit margin, which was 04.73% last quarter and is expected to remain in a low-single-digit band.
Most Promising Business Areas
Within Professional, turf and irrigation solutions retain the strongest potential due to their replacement cycles and institutional budget allocation, which typically provide steadier demand than pure discretionary retail. While last quarter’s USD 930.80 million Professional revenue reflects the segment’s scale, year-over-year declines underscore a more cautious end-market. For fiscal Q4, targeted initiatives in golf (course maintenance equipment and irrigation upgrades) and municipal/commercial landscaping are likely to support a more durable order book. Pricing and product innovation—such as efficiency gains, reliability improvements, and fleet management features—are key to lifting unit economics even when volumes get pressured. The degree of success in these areas will influence mix and margin, offering a path to stabilize earnings despite top-line headwinds.
Stock Price Drivers This Quarter
The stock’s near-term reaction will be most sensitive to the relationship between reported EPS (forecast USD 0.87) and the quality of margin delivery. If reported gross margin tracks near 34.39% and net profit margin holds within the expected low-single-digit range, investors may view the quarter as operationally sound despite revenue softness. Cash conversion and inventory discipline will be closely watched, especially after a prior-quarter EBIT undershoot relative to estimates; any improvement in working capital could support sentiment. Guidance commentary for early fiscal 2026, including dealer inventory normalization timelines and visibility into golf and contractor demand, will shape how the market extrapolates Q4 trends into next year. Upside surprise could come from stronger-than-expected Professional orders or successful price/mix actions, while downside risk lies in weaker Residential sell-through and elevated promotions.
Analyst Opinions
Across available institutional commentary, the majority view leans cautious, emphasizing decelerating revenue, softer EPS, and continued normalization in Professional demand. Analysts highlight that the consensus for fiscal Q4 targets revenue around USD 1.05 billion and EPS at USD 0.87, with year-over-year declines of 03.84% and 08.78%, respectively, pointing to restrained expectations. Several research desks note that last quarter’s adjusted EPS of USD 1.24 topped estimates while EBIT missed, indicating margin management but lingering top-line and operational pressures; this dynamic informs a guarded approach to Q4, with focus on inventory alignment and channel health. The cautious stance argues that while Toro’s margin structure shows resilience, the breadth of Professional exposure to nonresidential equipment cycles and municipal budgets requires conservative modeling for near-term growth. On balance, the prevailing view anticipates a credible margin performance in Q4 but limited scope for meaningful upside without a clearer inflection in orders or improved Residential sell-through.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments