Toro makes mowers, irrigation and snow machines, mostly for golf courses, grounds crews and contractors. Sales are growing again, but it is not yet clear whether new savings will lift reported profit as well as management's adjusted figures.
Picture the smooth fairway of a golf course or the neat grass of a city park. The machine that cut it may well have been made by The Toro Company. Toro builds equipment for people who care for land for a living, from golf courses to construction contractors, plus lawn and snow machines for homeowners. Most sales are in the United States, through distributors and dealers who resell its machines. It earns the gap between what those buyers pay and what the machines cost to build.
The Professional segment, Toro's larger business, brings in most of the money. Golf courses, grounds managers, irrigation users and contractors buy its equipment. Residential sales to homeowners move with consumer confidence and spending. Much of each machine is bought in, from steel and aluminum to engines, and Toro tries to lock in supplier prices for the volumes it plans. Snow throwers are built in summer and fall, sometimes into winter, so materials and factory time are committed before demand is known. What remains depends on making only what dealers will take and on keeping operating costs growing more slowly than sales. The share left after building costs has held steady since , so the pressure sits in operating costs.
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