Overview of The Toro Company (TTC) 3rd quarter 2021 earnings report
Category: The Toro Company (TTC)
Date: 13 September 2021 Stock price of Toro Company (TTC): $107.22 Market Capital of The Toro Company: $11.4 billion We take a look at the 3rd quarter 2021 earnings report of The Toro Company a worldwide provider of innovative solutions for the outdoor environment. For the 3rd quarter the group reported net sales of $977 million and net income of $96.3 million.
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Robust sales continued throughout the quarter in both our professional and residential segments. As we capitalized on the current demand environment and focused on serving our customers, our dedicated team and channel partners demonstrated extraordinary resolve in navigating global supply chain challenges. - Richard M. Olson, chairman and chief executive officer"
More About The Toro Company
With roots dating back to 1914, The Toro Company was built on a tradition of quality and caring relationships. Today, the company is a leading worldwide provider of innovative solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions. Through a strong network of professional distributors, dealers, rental stores and retailers in more than 125 countries, we proudly offer a wide range of products across a family of global brands to help golf courses, professional contractors, underground construction professionals, groundskeepers, agricultural growers, rental companies, government and educational institutions, and homeowners – in addition to many leading sports venues and historic sites around the world.
Overview of The Toro Company's 3rd quarter 2021 earnings report
THIRD-QUARTER FISCAL 2021 FINANCIAL HIGHLIGHTS
YEAR-TO-DATE FISCAL 2021 FINANCIAL HIGHLIGHTS
- Net sales of $976.8 million, up 16.2% from $841.0 million in the third quarter of fiscal 2020.
- Net earnings of $96.3 million, up 8.3% from $89.0 million in the third quarter of fiscal 2020; *adjusted net earnings of $99.4 million, up 12.1% from $88.7 million in the third quarter of fiscal 2020.
- Reported EPS of $0.89 per diluted share, up 8.5% from $0.82 per diluted share in the third quarter of fiscal 2020; *adjusted EPS of $0.92 per diluted share, up 12.2% from $0.82 per diluted share in the third quarter of fiscal 2020.
YEAR-TO-DATE FISCAL 2021 FINANCIAL HIGHLIGHTS
- Net sales of $3.0 billion, up 18.2% from $2.54 billion in the same prior-year period.
- Net earnings of $349.8 million, up 35.8% from $257.5 million in the same prior-year period; *adjusted net earnings of $333.0 million, up 28.8% from $258.6 million in the first nine months of fiscal 2020.
- Reported EPS of $3.21 per diluted share, up 35.4% from $2.37 per diluted share in the same prior-year period; *adjusted EPS of $3.06 per diluted share, up 28.6% from $2.38 per diluted share in the first nine months of fiscal 2020.
- Deployed $100.0 million to pay down debt and returned $261.8 million to shareholders through regular dividends of $84.7 million and share repurchases of $177.1 million. As of July 30, 2021, the company had ample liquidity of $1.1 billion.
The Toro Company management commentary on their 3rd quarter 2021 earnings report
BLOOMINGTON, Minn.--(BUSINESS WIRE)--Sep. 2, 2021-- The Toro Company (NYSE: TTC) today reported results for its fiscal third quarter ended July 30, 2021.
“Robust sales continued throughout the quarter in both our professional and residential segments,” said Richard M. Olson, chairman and chief executive officer. “As we capitalized on the current demand environment and focused on serving our customers, our dedicated team and channel partners demonstrated extraordinary resolve in navigating global supply chain challenges.
“We delivered double-digit net sales growth for the second quarter in a row for the professional segment, with continued strength in landscape contractor and golf markets worldwide, increased pre-season shipments of BOSS snow and ice management products, and higher demand for rental and specialty construction equipment and Ventrac products. Residential segment net sales were also up double-digits on top of a very strong third quarter last year, driven by increased retail demand for zero-turn and walk power mowers. Customers are excited about our new and enhanced products across both segments, including our expanding line of battery-powered offerings. Our continued investment in key technology areas underscores our commitment to provide a broad range of innovative and sustainable solutions.”
“Robust sales continued throughout the quarter in both our professional and residential segments,” said Richard M. Olson, chairman and chief executive officer. “As we capitalized on the current demand environment and focused on serving our customers, our dedicated team and channel partners demonstrated extraordinary resolve in navigating global supply chain challenges.
“We delivered double-digit net sales growth for the second quarter in a row for the professional segment, with continued strength in landscape contractor and golf markets worldwide, increased pre-season shipments of BOSS snow and ice management products, and higher demand for rental and specialty construction equipment and Ventrac products. Residential segment net sales were also up double-digits on top of a very strong third quarter last year, driven by increased retail demand for zero-turn and walk power mowers. Customers are excited about our new and enhanced products across both segments, including our expanding line of battery-powered offerings. Our continued investment in key technology areas underscores our commitment to provide a broad range of innovative and sustainable solutions.”
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OUTLOOK
“As we enter the final quarter of our fiscal year, we anticipate continued strong demand for our innovative product offerings, and are encouraged by the benefits we are realizing from our productivity and synergy initiatives,” added Olson. “We continue to align our actions with market dynamics and are prudently managing expenses for what is likely to be a challenging supply chain, inflation and labor environment into next year. All in, we are positioned to deliver excellent results for the full fiscal year, including record organic growth as we approach $4 billion in annual revenue. I am deeply inspired by our team’s ability to deliver such impressive results in this incredibly dynamic operating environment.
“Looking ahead, we remain focused on our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people. We are actively prioritizing investments in key technology areas of alternative power, smart connected and autonomous, and ensuring we have capacity to meet expected future growth,” concluded Olson.
The company is increasing its full-year fiscal 2021 guidance, and now expects net sales growth of about 17%, up from a range of 12% to 15% previously, and *adjusted EPS in the range of $3.53 to $3.57 per diluted share, up from the prior range of $3.45 to $3.55 per diluted share. The company’s updated guidance is based on management’s current visibility, and reflects expectations of a strong demand environment, coupled with continuing supply chain, inflation and labor pressures. The *adjusted diluted EPS guidance range excludes the benefit of the excess tax deduction for stock-based compensation and the net impact of certain legal settlements.
“As we enter the final quarter of our fiscal year, we anticipate continued strong demand for our innovative product offerings, and are encouraged by the benefits we are realizing from our productivity and synergy initiatives,” added Olson. “We continue to align our actions with market dynamics and are prudently managing expenses for what is likely to be a challenging supply chain, inflation and labor environment into next year. All in, we are positioned to deliver excellent results for the full fiscal year, including record organic growth as we approach $4 billion in annual revenue. I am deeply inspired by our team’s ability to deliver such impressive results in this incredibly dynamic operating environment.
“Looking ahead, we remain focused on our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering people. We are actively prioritizing investments in key technology areas of alternative power, smart connected and autonomous, and ensuring we have capacity to meet expected future growth,” concluded Olson.
The company is increasing its full-year fiscal 2021 guidance, and now expects net sales growth of about 17%, up from a range of 12% to 15% previously, and *adjusted EPS in the range of $3.53 to $3.57 per diluted share, up from the prior range of $3.45 to $3.55 per diluted share. The company’s updated guidance is based on management’s current visibility, and reflects expectations of a strong demand environment, coupled with continuing supply chain, inflation and labor pressures. The *adjusted diluted EPS guidance range excludes the benefit of the excess tax deduction for stock-based compensation and the net impact of certain legal settlements.
The Toro Company (TTC) stock price chart over the last 5 years
The image below shows the stock price history of The Toro Company for the last 5 years and it's been a pretty good time for Toro Company stockholders with the stock of The Toro Company increasing by 126.6% over the last 5 years.
The stock of Toro Company is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toro Company's stock is very positive at this point in time.
The stock of Toro Company is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toro Company's stock is very positive at this point in time.
Latest stock valuation of The Toro Company (TTC)
So what is The Toro Company stock worth based on their 3rd quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for The Toro Company at $73.40 a stock.
We therefore believe the stock of The Toro Company is overvalued at its current price of $107.22
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $73.40, thus a good entry point into The Toro Company would be at $66 or below.
We expect the stock of The Toro Company to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued at its current price. Since the stock of Toro is trading at well above our suggested entry point we rate the stock of Toro as a sell
We therefore believe the stock of The Toro Company is overvalued at its current price of $107.22
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $73.40, thus a good entry point into The Toro Company would be at $66 or below.
We expect the stock of The Toro Company to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued at its current price. Since the stock of Toro is trading at well above our suggested entry point we rate the stock of Toro as a sell
Next earnings release of The Toro Company
It is expected that The Toro Company will release their 4th quarter 2021 earnings report in early December 2021