TTC

Toro is a well-run maker of professional and residential turf, landscaping and snow-management equipment with durable brands and a 33.4% gross margin. FY2025 was a soft year cyclically: revenue slipped 1.6% to $4.51B, operating income fell 23.1% to $410M, net income dropped 24.5% to $316M, and diluted EPS declined 20.9% to $3.17. After several years near peak ($410M-$443M net income from FY2021-FY2024), this looks like a cyclical/destocking pause rather than structural deterioration — operating margin compressed to 9.1% and net margin to 7.0%.

Underneath the weaker P&L, the cash and capital story stayed strong. Operating cash flow actually rose 16.2% to $662M against just $83.7M of capex, cash grew 70.9% to $341M, and the company returned capital aggressively — $290M of buybacks (+18.1%, shares down 3.2%) plus $151M of dividends (+1.1%). Return on equity remained high at 21.8% on a lean $1.45B equity base, and leverage is modest with $922M of long-term debt and no current debt. The improving cash conversion amid falling earnings suggests inventory normalization is freeing up working capital.