The Toro Company Exceeds $4.55 Billion in Total Net Sales for Fiscal 2023
2023-12-30
The Toro Company recently held its earnings conference call to discuss its fourth-quarter and full-year fiscal 2023 earnings. The call was hosted by Julie Kerekes, the Treasurer and Senior Manager, Director of Global Tax and Investor Relations at The Toro Company. The purpose of the conference call was to provide an overview of the company's financial performance and discuss its future outlook.
During the call, it was mentioned that the company's total net sales for the year were $4.55 billion, exceeding last year's record results. The professional segment of the business, particularly underground and specialty construction, saw strong performance throughout the year. However, the residential segment experienced a decline in net sales due to factors such as unfavorable weather patterns, rising interest rates, and economic uncertainty.
To offset the reduction in homeowner demand, the company focused on its strength in the golf and grounds businesses, which experienced robust demand and increased production output. The company also took actions to align with current market conditions, including increasing output for businesses with elevated order backlog and decreasing output for lawn care products. Additionally, the company implemented restructuring actions to adjust headcount for industry dynamics.
The company's multi-year productivity initiative, called AMP (Amplifying Maximum Productivity), was also discussed during the conference call. The AMP initiative aims to achieve more than $100 million of incremental annual cost savings by fiscal 2027. The company expects the AMP program to result in improved productivity and cost reduction, enabling it to reinvest in areas that can accelerate profitable growth.
In terms of financial performance, the company reported adjusted diluted earnings per share of $4.21 for the year. The company's full-year free cash flow was $164.4 million, with a conversion ratio of 50% of reported net earnings. The company's capital allocation strategy included funding capital expenditures, dividends, and share repurchases.
Looking ahead to fiscal 2024, the company expects low single-digit total company net sales growth, with the second and third quarters being the larger quarters. The company anticipates overall adjusted operating earnings as a percentage of net sales to be slightly higher than last year, with higher earnings margins in both the professional and residential segments.
The company's guidance for fiscal 2024 includes an anticipated range for full-year adjusted earnings per share of $4.25 to $4.35 per diluted share. The company also expects capital expenditures of approximately $125 million for the year and an adjusted effective tax rate of about 21%.
In conclusion, The Toro Company's earnings conference call covered various topics related to its financial performance, future outlook, cost-cutting measures, and strategic initiatives. The company highlighted its strong performance in the professional segment, its focus on productivity and cost reduction through the AMP program, and its plans for continued growth in fiscal 2024.