CEO Michael Hoffman of
) discussed the company's growth drivers for fiscal 2014 during its
second-quarter fiscal 2014 conference call on May 22. Backed by its
strong product lineup and an aggressive promotional calendar, this
worldwide provider of turf and landscape maintenance equipment as
well as irrigation solutions is poised to deliver revenue growth in
the remainder of 2014.
According to Hoffman, despite an unfavorable spring, Toro's end
markets remained strong. The company's landscape contractor
business outlook remains bullish. With favorable weather expected
ahead and given its best ever product lineup for both contractors
and acreage customers, Toro will deliver strong revenues in fiscal
Toro is launching additional products that include extensions of
its popular zero-turn line featuring rear discharge decks, direct
collection systems and smart technologies and a brand new line of
21-inch heavy duty mowers with added durability and improved
bagging performance. These products are in sync with the company's
practice of delivering superior value to its contractor customers.
Coming to segment-wise expectations, Hoffman stated that the
professional grounds business should benefit from improved weather
conditions that will boost sports activity and revenue for local
sports associations. The launch of the new 100 inch deck option for
Groundsmaster 360, will enhance its productivity, and thus enhance
its appeal to local sports and municipal agencies.
With temperatures rising, the prospects for the golf equipment
business will also mount. As rounds played rebound, greens fees and
course revenues follow, which should lead to additional equipment
Golf irrigation sales will remain strong as innovations like
INFINITY sprinkler series provide a competitive advantage and will
enable the company win new projects globally. However, Hoffman
remained cautiously optimistic about the residential and commercial
contractor irrigation field. Water use restrictions in
drought-stricken regions will be a deterring factor. However,
contractors have projects in hand and Toro's strong product
portfolio will help them take advantage as business heats up.
The low voltage lighting contractor business should see an uptick
in sales now that the conducive weather is providing contractors
the opportunity to demonstrate and install lighting systems. Toro
has exciting new products lined up for release -- a line of
professional grade aluminum alloy lighting products called Element,
which extends the scope and price range of its lighting portfolio.
The launch of Element's is expected to act as a catalyst for
The professional rental and construction business is also expected
to deliver continued year over-year growth. New home construction
estimates indicating a more gradual growth throughout 2014 may be
offset by increasing commercial construction. Improved weather and
positive commercial construction forecasts bode well for both
equipment rental and purchase prospects.
New products will be making it into the field for the first time
in the third quarter. The initial build of the RT1200, a
125-horsepower riding trencher is underway. The Pro Sneak 365, a
new Tier-4 compliant unit, will also be launched later this
Even though the second quarter sales for Toro's residential
equipment business experienced some delays, Hoffman stated that it
is well positioned for late spring and early summer sales. The
innovative new Toro walk power mowers featuring SmartStow and the
new 42-inch time cutter zero-turn rider have been received well by
retailers. The refreshed line of Titan zero-turn mowers for large
acreage owners and an expanded electric product lineup featuring
new 24 and 48 volt cordless models, further strengthen the appeal
of Toro's residential portfolio.
So far in fiscal 2014, Toro's international businesses results were
affected by currency fluctuations. However, steady regional
recovery of golf tourism, along with the need to replace aging golf
and grounds fleets, provide ground for optimism. Golf irrigation
sales are expected to benefit in the third and fourth quarters from
a number of planned new installations as well as renovation
Overall, favorable temperatures and precipitation are needed to
assist the extension of the growing season and help drive retail in
both its residential and professional segments. The upcoming
product launches are expected to be growth drivers.
The company thus expects revenue growth of about 5% to 6% for
fiscal 2014, with net earnings of about $2.90 to $2.95 per share.
The company expects to net earnings of about 82 cents per share for
the third quarter.
Toro currently carries a short-term Zacks Rank #3 (Hold). However,
some better-ranked stocks in same sector include
Blount International Inc.
). While Gorman-Rupp and Blount International sport a Zacks Rank #1
(Strong Buy), Snap-on carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
BLOUNT INTL (BLT): Free Stock Analysis Report
GORMAN RUPP CO (GRC): Free Stock Analysis
SNAP-ON INC (SNA): Free Stock Analysis Report
TORO CO (TTC): Free Stock Analysis Report
To read this article on Zacks.com click here.