The number of golf rounds played in 2024 is exceeding the record pace from last year. That’s good news for Toro.
Toro cashing in on golf’s growth, reversing losses from last summer
Golf’s popularity continues to grow, which has helped the Bloomington-based business offset fewer sales from homeowners and lawn care dealers.
The Minnesota Star Tribune
September 5, 2024 at 5:01PM
Sales of the Bloomington-based company’s golf and grounds equipment, as well as its underground construction machines from its Ditch Witch brand, drove third-quarter results for the outdoor machinery manufacturer. According to the National Golf Foundation, the sport’s play was up 1.3% by the end of July compared to the same time in 2023, despite a heatwave in some course hotspots. Rounds in Minnesota are up 1.4% through July.
“The projected strength in infrastructure spending for the foreseeable future is a positive outlier in the construction industry, and golf rounds played show no signs of slowing down,” said Rick Olson, Toro’s chairman and chief executive in a news release.
Toro earned $119.3 million, or $1.14 a share, in the quarter compared to a loss of $15 million, or 15 cents a share, in the same quarter last year. In the company’s third quarter last year, Toro took a $151.3 million non-cash impairment charge related to the 2022 acquisition of the Intimidator Group.
Adjusted earnings were $1.18, up 24.2% from the same quarter a year ago. But adjusted earnings missed analyst expectations of $1.22 a share.
Revenue increased 6.9% in the quarter to $1.16 billion. Sales of the company’s residential products grew more than 50% to $267.5 million, mainly from sales through its mass retail channel that includes the addition of Lowe’s as a partner. The two companies announced the deal a year ago, and the hardware store chain began selling Toro products this spring.
Sales in Toro’s professional segment were down 1.7% to $880.9 million. Sales of golf and grounds equipment as well as underground construction equipment offset lower shipments of snow and ice management products, lawn care equipment and compact utility loaders.
Citing the continued difficult macro economic environment for homeowners and lawn care dealers, Toro lowered its adjusted earnings per share guidance for the remainder of the fiscal year to between $4.15 to $4.20 a share.
Shares of Toro closed Thursday at $81.82 a share, down 10.1%.
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