The Toro Company (NYSE: TTC) is a leading provider of innovative solutions for the outdoor environment, specializing in turf maintenance, snow management, and underground utility construction. For the second quarter of fiscal 2025, the company reported net sales of $1.32 billion, a 2.3% decline from the same period in fiscal 2024 when sales were $1.35 billion.

The decline in revenue was influenced by a downturn in the Residential segment, which saw a significant 11.4% drop in sales, falling to $297 million from $336 million year-over-year. This reduction was attributed primarily to lower shipments of walk power mowers and zero-turn mowers, as well as previous divestitures affecting the product range.

In contrast, the Professional segment reported a slight increase in sales, reaching $1.014 billion, up 0.8% from $1.006 billion in the prior year. This growth was largely driven by increased shipments of golf and grounds products. Professional segment earnings for the quarter were $202 million, compared to $191 million a year earlier, with a corresponding margin improvement to 19.9%, up from 19.0%.

Reported earnings per share (EPS) for the second quarter were $1.37, down from $1.38 in the same period last year. However, adjusted EPS increased to $1.42, up from $1.40 a year prior. Free cash flow for the quarter was reported at $84.7 million, slightly lower than the $95.6 million recorded in the same quarter last year.

Gross margins stood at 33.1%, down from 33.6% for the same period last year, reflecting increased material and manufacturing costs, particularly in the Residential segment. Operating earnings margin decreased to 13.3% from 13.9% in the same quarter last year, while adjusted operating earnings margin fell from 14.2% to 13.7%. Selling, general, and administrative (SG&A) expenses as a percentage of net sales increased marginally to 19.8%, compared to 19.7% in the prior year.

Looking ahead, Toro has adjusted its full-year fiscal 2025 guidance, now expecting net sales to be flat to down 3% year-over-year. The company anticipates an adjusted EPS in the range of $4.15 to $4.30, which reflects potential pressures from homeowner spending patterns and macroeconomic factors. The professional segment is expected to show slight growth, while the residential segment forecasts a decline of high teens percentage.

Overall, the financial results indicate a company experiencing a mixture of challenges and successes across its segments, with the Professional sector displaying resilience amid broader market pressures impacting the Residential area.