Many more Americans are working from home and staying at home more because of the coronavirus pandemic — which helped boost residential product sales at Toro.
The Bloomington-based maker of lawn care products for residential and professional markets, as well as underground construction equipment, saw its third quarter earnings rise 47% to $89 million.
Adjusted net income was $88.7 million, or 82 cents per share, was down 1.2%, from the $89.8 million, or 83 cents per share, in the third quarter of last year.
“We reported top-line growth in a challenging environment, primarily due to the continued strength of our residential segment as favorable weather, our new product lineup and stay-at-home trends drove robust demand in the mass and dealer channels,” said Toro CEO Richard Olson in a news release.
Sales in Toro’s residential segment were $205 million in the quarter, a 38% increase driven by purchases of zero-turn riding mowers and walk power mowers.
Sales in the company’s larger profession segment were $623.6 million, down 8% from the same period last year, as that segment was more adversely affected by COVID-19.
While golf rounds played have been up, both because state stay-at-home mandates allowed the sport and because people thought is was a comparatively safe recreation option, golf clubs were largely missing revenue from restaurant and bar operations. As a result, clubs deferred some equipment purchases.
The professional segment also saw fewer sales to rental markets and of underground construction equipment. The company’s acquisition of Venture Products earlier this year is showing dividends, and incremental sales of those products helped offset sales declines in rest of the professional segment.
Toro withdrew financial guidance earlier this year, and hasn’t reinstated guidance for its fourth quarter and fiscal year, which ends Oct. 31. However, it did offer assumptions that residential product sales would continue to grow — but at a lower rate — and that the professional segment would continue to progress toward more normal rates if customer confidence continues to improve.