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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
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  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
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  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

5 Insightful Analyst Questions From The Toro Company’s Q2 Earnings Call

TTC Cover Image

The Toro Company’s second quarter results reflected the ongoing divergence between its strong professional equipment segment and continued weakness in residential demand. Management cited robust sales in underground construction and golf products as key drivers of professional segment growth, while persistent consumer caution weighed on residential sales. CEO Rick Olson noted, “Our third quarter results reflect this strong positioning,” but also acknowledged that lower homeowner demand and channel partner inventory reductions held back overall sales. The company’s efforts to drive cost savings and productivity improvements partially offset these pressures.

Is now the time to buy TTC? Find out in our full research report (it’s free).

The Toro Company (TTC) Q2 CY2025 Highlights:

  • Revenue: $1.13 billion vs analyst estimates of $1.16 billion (2.2% year-on-year decline, 2.2% miss)
  • Adjusted EPS: $1.24 vs analyst estimates of $1.22 (2.1% beat)
  • Adjusted EBITDA: $186.2 million vs analyst estimates of $193.8 million (16.5% margin, 3.9% miss)
  • Management lowered its full-year Adjusted EPS guidance to $4.15 at the midpoint, a 1.8% decrease
  • Operating Margin: 5.7%, down from 12.8% in the same quarter last year
  • Market Capitalization: $7.68 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From The Toro Company’s Q2 Earnings Call

  • Mike Shlisky (D.A. Davidson & Co.) asked whether stronger demand from professional contractors could have been even higher if not for weak consumer crossover, to which CEO Rick Olson explained that contractor demand made up for muted homeowner activity in the professional channel, resulting in net growth for that segment.
  • Samuel Darkatsh (RJF) inquired about Toro’s residential market share and prospects at key retailers like Lowe’s and Tractor Supply. Olson responded that Toro has maintained its share through market volatility, with late-season retail strength helping offset a slow start, but channel partners remain hesitant to restock.
  • David MacGregor (Longbow Research) questioned the potential for raising Toro’s AMP cost savings target, given the strong progress to date. CFO Angie Drake acknowledged the company is ahead of plan and indicated that future guidance may address an “AMP 2.0” expansion.
  • Thomas Mahoney (Cleveland Research Company) sought clarity on the impact of divestitures and cost inflation for the fourth quarter. Drake explained that about half the third-quarter revenue decline was due to divestitures, and that ongoing cost pressures include inflation and manufacturing variances.
  • Ted Jackson (Northland) focused on inventory levels and alignment for the 2026 spring season. Olson and Drake detailed efforts to reduce both company and dealer inventories, with continued work needed to achieve optimal inventory turns.

Catalysts in Upcoming Quarters

In the coming quarters, our team will closely monitor (1) inventory normalization in the residential and dealer channels, (2) ongoing margin performance in the professional segment as cost initiatives scale, and (3) the pace of recovery in homeowner demand, especially if macroeconomic conditions or interest rates shift. Execution on new product launches and the impact of tariff mitigation strategies will also be important indicators of the company’s ability to deliver on its operational targets.

The Toro Company currently trades at $78.13, down from $80.64 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

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