The Toro Company (NYSE:TTC) stock is trading lower Thursday after the company reported third-quarter results.

Earnings Beat Estimates

Adjusted earnings came in at $1.33 per share, beating the $1.31 analyst estimate.

Sales of $1.223 billion also beat the consensus estimate of $1.191 billion. Sales rose 8.4% year over year, including 6.2% organic growth.

Results included a 12-cent benefit from operational performance, 5 cents from share repurchases and 6 cents from tariff refunds.

Adjusted operating margin expanded 30 basis points to 13.9%. Toro credited its AMP productivity initiative for much of the improvement. The company expects the program to exceed its $125 million run-rate savings target by year-end.

Inventory fell by $153 million from a year earlier, while working capital improved by $217 million.

Toro generated $425 million in free cash flow year to date and repurchased $358 million of shares.

Professional Sales Rise, Margins Slip

Professional segment sales rose 8.8%, including 6.1% organic growth. However, adjusted operating margin fell 40 basis points to 20.9% due to product mix and higher manufacturing costs.

Residential sales increased 8.6%. Adjusted operating margin jumped 400 basis points to 5.9%, helped by productivity gains, pricing, higher volumes and a favorable year-over-year comparison.

Landscape contractor sales grew by double digits, while Underground and Specialty Construction sales increased by mid-single digits.

Golf shipments declined modestly against a strong prior-year comparison. However, Toro said industry fundamentals remained healthy.

Professional growth benefited from the redesigned Exmark Radius zero-turn mower and GrandStand Multi Force line.

Ventrac continued to gain traction with landscape contractors and acreage homeowners. Demand for its new fence post mower also exceeded the initial production run.

Underground Construction grew by mid-single digits. HammerHead Blue Light pipe-relining solutions increased more than 30% year to date.

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Toro Raises Full-Year Outlook

For fiscal 2026, Toro raised adjusted EPS guidance to $4.60-$4.65 from $4.50-$4.62. The consensus estimate is $4.61.

The company increased its sales outlook to $4.794 billion-$4.808 billion from $4.691 billion-$4.804 billion. The new range is above the $4.762 billion consensus estimate.

Toro also raised its full-year sales growth forecast to 6.3%-6.6% from 4%-6.5%.

The outlook implies fourth-quarter sales growth of 3.9%-5.1% and adjusted EPS of 93 cents to 98 cents.

The forecast includes $7 million of anticipated IEIPA tariff refunds, down from $12 million previously expected.

During the earnings call, Toro said its AMP productivity initiative has already reached its $125 million run-rate savings target, but tariffs and commodity inflation have absorbed some of those gains.

CFO Angie Drake said the company is not realizing the full benefit of the savings in fiscal 2026 because a portion has been used to offset those cost pressures. However, Toro expects the savings to support continued margin expansion as they carry into fiscal 2027.

TTC Price Action: Toro shares were down 6.70% at $92.50 at the time of publication on Thursday, according to Benzinga Pro data.

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