The Toro Company (TTC) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 rose 8.1% year-over-year to $1.42 billion, with adjusted EPS up 12.7% to $1.60 and reported EPS up 9.5% to $1.50, driven by broad-based demand and margin improvement.

• Growth was led by the Professional segment, especially in Underground Construction, Golf, and Landscape Contractor categories, supported by the Tornado Infrastructure Equipment acquisition.

• Productivity initiatives, notably the AMP program, delivered significant cost savings, targeting $125 million in run-rate savings by 2027.

• Returned $228 million to shareholders in Q2 and $361 million in the first half through dividends and share repurchases.

• Raised full-year guidance for net sales growth to 4%-6.5% and adjusted EPS to $4.50-$4.62, reflecting confidence in continued strong performance.

Financial highlights

• Q2 2026 gross margin increased to 33.9%, with adjusted gross margin at 34.5%; adjusted operating margin reached 14.4%, the highest in 12 quarters.

• Free cash flow for the first six months was $265.5 million, with a conversion rate of 124.5%.

• Returned $360.9 million to shareholders in the first six months via dividends and share repurchases.

• Net earnings for Q2 were $145.4 million, up 6.3% year-over-year.

• Professional segment net sales in Q2 were $1,106.6 million, up 9.1%, with segment earnings margin at 20.3%.

Outlook and guidance

• Full-year net sales growth guidance raised to 4%-6.5%, with adjusted EPS guidance increased to $4.50-$4.62.

• Professional segment expected to grow 5%-7% for the year; residential sales expected to be flat.

• Q3 sales expected up mid-single digits; Q3 margins to be lower than Q2 due to seasonality and inflation/tariff pressures.

• AMP initiative expected to achieve at least $125 million in run-rate savings by fiscal 2027.

• Liquidity of $983.3 million as of May 1, 2026, deemed sufficient for at least the next twelve months.