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Toro: Toro Company Delivers Strong Q4 Results with Sales and EPS Beating Expectations

The Toro Company's fourth quarter sales and adjusted EPS exceeded expectations, with consolidated net sales of $1.07 billion and adjusted diluted earnings per share of $0.91. For the full year, the company reported total consolidated net sales of $4.5 billion, down 1.6% from fiscal 2024, and delivered adjusted earnings per diluted share of $4.20, beating guidance. The actual EPS came out at $1.24, relative to estimates at $1.22. The Professional segment margin grew to 19.2%, driven by sustained momentum in underground construction and better-than-anticipated growth in snow and ice management.

TTC

USD 77.67

-0.67%

A-Score: 5.1/10

Publication date: December 17, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Q4 Outperformed Expectations Net sales $1.07B and adjusted EPS $0.91 beat estimates, driven by Professional segment margin growth to 19.2%.
  • Full-Year Adjusted EPS Beats Guidance Fiscal 2025 adjusted EPS of $4.20 exceeded guidance despite 1.6% sales decline to $4.5B.
  • Record Free Cash Flow & Shareholder Returns Generated $578M free cash flow, returning $441M to shareholders via dividends and buybacks.
  • 2026 Guidance Raised Targets 2–5% sales growth, $4.35–$4.50 adjusted EPS, and improved margins despite $100M tariff headwinds.
  • AMP Savings Progress Achieved $75M savings to date, targeting $125M by 2027, with 50% reinvestment in growth markets and innovation.

Segment Performance and Outlook

The company expects annual total company net sales to rise 2% to 5% in 2026, with professional segment sales growing mid-single digits and residential segment sales declining low to mid-single digits. The company guided for 2-5% sales growth, with Tornado adding a couple of hundred basis points, and pricing contributing a couple of hundred basis points. The residential business is expected to be down, but the company sees strength in the pro side, particularly in underground and golf.

Operational Improvements and Cost Savings

The AMP program is on track, with a target of $125 million in savings by 2027. The company has realized $75 million in savings so far and does not expect to need volume growth to achieve the target. The company plans to reinvest up to 50% of the savings. Raw material costs are expected to be stable, with some inflation early in the year. Channel inventories are in good shape, and lead times have normalized.

Valuation and Growth Expectations

Analysts estimate next year's revenue growth at 4.3%. The company's current valuation metrics include a P/E Ratio of 24.13, P/S Ratio of 1.69, and EV/EBITDA of 15.72. The ROE is 21.77%, and the ROIC is 13.58%. The dividend yield is 1.96%, and the free cash flow yield is 6.47%. These metrics suggest that the market has priced in a certain level of growth and profitability for the company.

Tariff Headwinds and Guidance

Tariffs are expected to be a headwind in 2026, with a total impact of around $100 million, primarily related to steel and aluminum tariffs, and China-related tariffs. The company has a focused team working on tariffs and has been able to offset some of the effects through productivity and pricing actions. The professional segment margin guidance for 2026 is 18.5-19.5%, reflecting some benefits from AMP, but also some headwinds from mix and acquisition costs.

Toro's A-Score