Toro (TTC) Q2 2016 Earnings

Toro (TTC) CEO Michael Hoffman said bad weather impacted the residential business

“A cold snap late in the quarter interrupted favorable spring weather conditions and caused a slowdown of residential sales. The negative impact was further exacerbated by accelerated first quarter channel demand for riding products this year, fueled by our supply issues last year. This led to an 11% decline in residential sales in the quarter.”

Strength in corporate customer business

“We begin with our professional segment where our landscape contractor businesses led the way in the quarter, driven by strong market acceptance of recently launched new innovations.  Contractors and acreage owners alike are being drawn to the productivity and comfort of our professional zero-turn riders equipped with our new suspension systems. Likewise, our new generation stand-on mowers are performing well due to the productivity and ease of use they provide. Similarly, the momentum we reported on our last call of our golf equipment business continued into the second quarter.”

Favorable input costs helped margins 

“Second quarter gross margin was 36.2%, an increase of 210 basis points. Favorable commodity costs, increased productivity, and product mix favoring our professional segment all contributed to this improvement.”

Retail sales strong through the month of May 

“And so retail is good through the middle of May, even with some of the more challenging weather conditions that we’ve faced you know, kind of through April and the first couple of weeks of May. And so, we got off to a really strong start and some of that went back as Mother Nature didn’t cooperate, particularly in key selling markets.”