Second Quarter The Toro Company (NYSE: TTC) Fiscal Year 2020 Outlook and operating Results

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The Toro Company (NYSE: TTC) spotted trading -24.66% off 52-week high price. On the other end, the stock has been noted 21.91% away from the low price over the last 52-weeks. The stock changed 0.28% to recent value of $63.48. The stock transacted 125,656 shares during most recent day however it has an average volume of 504.89K shares.

The Toro Company (TTC) recently stated results for its first quarter ended January 31, 2020.

“Fiscal 2020 is off to a solid start, fueled by revenue growth and gross margin expansion in the quarter that builds on similar results last year,” stated Richard M. Olson, chairman and chief executive officer. “The integration of Charles Machine Works is progressing ahead of our original expectations as we approach the first anniversary of the acquisition, and we are on track to achieve our synergy goals. Among the many key initiatives that we expect will contribute to our fiscal year, we are excited about expanding our residential product reach through our new placement with the Tractor Supply Company. In fact, we believe all our channel partners will benefit from the refreshed products, branding and marketing. Finally, we reported the closing of the acquisition of Venture Products earlier this week. We welcome the Venture Products team and the well-regarded Ventrac® product line to The Toro Company.”

Second Quarter and Fiscal Year 2020 Outlook

“In addition to anticipated healthy demand for our core products in the golf, grounds, contractor and construction markets, there is considerable pre-season excitement for the new products we displayed at recent industry trade shows,” continued Olson. “The all-electric e-Dingo™ compact utility loader, Greensmaster® eTriFlex™ and 60V Flex-Force™ steel deck walk power mower enhance our lithium-ion battery-powered offerings and demonstrate our commitment to alternative energy solutions. At the Golf Industry Show, we showcased smart-connected and autonomous-enabled product concepts focused on helping consumers be more productive.”

“We are realizing productivity and synergy gains from the Charles Machine Works acquisition and seeing some benefit from the current commodity cost environment. This translated into higher gross margin in the first quarter and we expect to see full year gross margin expansion,” continued Olson.

The company is maintaining its fiscal 2020 guidance, including net sales of about $3.6B and adjusted EPS of $3.33 to $3.40 per diluted share. For the second quarter, the company expects adjusted EPS of $1.28 to $1.33 per diluted share. Full year and second quarter 2020 guidance includes the benefit of Venture Products and nominal disruptions from coronavirus. Guidance excludes the benefit of the excess tax deduction for share-based compensation and acquisition and integration-related costs.

“While we are optimistic about the year, there are several factors beyond our control that may affect our performance, such as unfavorable weather conditions and more important disruptions from coronavirus. As always, we will concentrate on controlling what we can control, while being prepared to respond to those factors that we cannot, and continuing to focus on our key planned priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering our people,” concluded Olson.

OPERATING RESULTS

Gross margin for the first quarter was 37.5% contrast with 35.8% for the same prior-year period, a raise of 170 basis points. Adjusted gross margin for the first quarter was 37.6% contrast with 35.8% for the first quarter of fiscal 2019. The increase in gross margin and adjusted gross margin for the first quarter of fiscal 2020 was primarily driven by productivity and synergy initiatives, improved net price realization, lower freight costs, and lower commodity and tariff costs.

Selling, general and administrative (SG&A) expense as a percent of sales for the first quarter increased 140 basis points to 25.6% from 24.2% in the same year-before period, reflecting higher costs Because of the addition of Charles Machine Works and increased indirect sales and marketing expense.

Operating earnings as a percent of net sales were 11.9% for the first quarter, contrast with 11.6% for the same period last year. Adjusted operating earnings as a percent of net sales were 12.1% in the quarter, contrast with 11.9% in the same period last year.

Interest expense in the first quarter was $8.2M contrast with $4.7M in the same prior-year period as a result of incremental borrowings to fund the purchase of Charles Machine Works.

The effective tax rate for the first quarter was 18.6%, contrast with 15.0% for the first quarter of fiscal 2019, driven by a lower tax benefit related to the excess tax deduction for share-based compensation. The adjusted effective tax rate for the first quarter was 21.0%, contrast with 20.9% for the first quarter of fiscal 2019.

Its earnings per share (EPS) expected to touch remained -9.90% for this year while earning per share for the next 5-years is expected to reach at 19.50%. TTC has a gross margin of 33.90% and an operating margin of 10.50% while its profit margin remained 8.60% for the last 12 months. The price moved ahead of -0.48% from the mean of 20 days, -7.46% from mean of 50 days SMA and performed -14.21% from mean of 200 days price. Company’s performance for the week was – -0.72%, – 7.05% for month and YTD performance remained -20.55%.

 

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