TTC 10-K & 10-Q changes, risk factors and insider trading
Toro Co. · NYSE · Lawn & Garden Tractors & Home Lawn & Gardens Equip · CIK 737758 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our domain names are critical assets for informing consumers about our brand, but they are increasingly targeted by scams.”
New heading “Recently announced and future tariffs and other trade restrictions could materially and adversely affect our business, financial condition and results of operations.”
New heading “We may be required to incur impairment and other charges resulting from the impairment of goodwill or tangible or intangible assets recorded in connection with acquisitions or due to exit or disposal activities.”
Removed heading “We incurred non-cash impairment charges during the third quarter of fiscal 2023 which adversely affected our third quarter and full year fiscal 2023 operating results and we may be required to incur additional future impairment and other charges, which could adversely affect our operating results.”
Largest changes
“We may be required to incur impairment and other charges resulting from the impairment of goodwill or tangible or intangible assets recorded in connection with acquisitions or due to exit or disposal activities.”see in full comparison
“In 2025, the U.S. government announced a series of tariffs, including tariffs targeting a broad range of imports and targeted tariffs on goods from specific countries and industries. In response, many countries imposed reciprocal tariffs and other trade restrictions on the United States. …”see in full comparison
•national and international conflicts,see in full comparisonincludingpolitical instability or tensions (such as the current geopolitical tensions involving China and Taiwan, the ongoing war betweenUkraineRussia andRussia, the war between IsraelUkraine, andHamas,MiddlegeopoliticalEasttensionsconflicts and wars), foreign policy changes, acts of war or terrorist acts;
“We incurred non-cash impairment charges during the third quarter of fiscal 2023 which adversely affected our third quarter and full year fiscal 2023 operating results and we may be required to incur additional future impairment and other charges, which could adversely affect our operating results.”see in full comparison
“Recently announced and future tariffs and other trade restrictions could materially and adversely affect our business, financial condition and results of operations.”see in full comparison
For example, during the third quarter of fiscalsee in full comparison2023,2025, we recorded a non-cash impairmentchargescharge of$18.0$81.1 million related to the indefinite-lived Spartan trade name intangibleassetasset.and $133.3 million related to Intimidator goodwill. TheseThis impairmentchargescharge resulted in a$36.7$19.7 million income tax benefit (deferred tax asset) associated with the remaining tax deductible basis ingoodwill andother intangible assets. As of October 31,2024,2025, we had goodwill of$450.3$450.9 million, which is maintained in various reporting units, and indefinite-lived intangible assets of$271.6$190.6 million, which together comprise20.118.7 percent of our total assets as of October 31,2024.2025. For additional information regarding the impairment charge, refer to Note 5, Goodwill and Other Intangible Assets, in our Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. Any future impairment charges could be significant and could adversely affect our future consolidated operating results and financial condition.
Full comparison: every changed paragraph (47)
•We are dependent upon our channel customers.customers, and changes in their purchasing patterns could negatively impact sales.
•We are dependent upon the availability and terms of credit offered to our customers.customers, which affect purchasing behavior and could adversely impact our net sales.
•We are dependent upon effective information systems.systems and our domain names.
•Our international operations expose us to currency, regulatory, and political risks that could impact our business.
•Our international operations involve risk.
•There are risks associated with the imposition of, or changes to, tariffs, which have impacted and could further negatively impact trade between, or increase the cost of operating in, or increase the cost of or negatively impact the demand for, our products or our customers’ products in the countries in which we or our customers do business.
•We may face challenges in harmonizing information technology systems, compliance frameworks, and corporate governance practices related to Tornado Infrastructure Equipment.
•There are risks associated with the recent U.S. presidential election, including the imposition, or threat of imposition, of additional tariffs.
•Our strategy to pursue acquisitions and alliances, strong customer relations, and new joint ventures, investments, and partnerships and our recent activities related to Tornado Infrastructure Equipment in this regard involve risk and may prove to be unsuccessful.
•Climate, environmental, health and safety laws and regulations as well as the impact of increased scrutiny on our environmental, social and governance (“ESG”)sustainability practices, our ability to meet our ESGcompany companysustainability goals, and public perceptions that our products are not environmentally friendly or that our practices are not sustainable could impact our reputation.
•Delays in integration related to Tornado Infrastructure Equipment may erode expected synergies and shareholder value.
•Our business, which is subject to extensive regulation, including new regulators of businesses that we have acquired or may acquire in the future, involves legal and regulatory risks.
One of our strategies is to develop innovative, customer-valued and high-quality products to generate revenue and earnings growth. In the past, our sales from new products, which we define as those introduced in the current and previous two fiscal years, have represented a significant portion of our net sales and are expected to continue to represent a significant portion of our future net sales. We may not be able to compete as effectively and ultimately satisfy the needs and preferences of our customers, unless we can continue to enhance existing products and develop new and innovative products, including by incorporating new, emerging, and/or disruptive technologies that may become preferred by our customers. For example, we have the transitionrisks riskrelated ofto developing and marketing electric and alternative fuel products to meet market demands for less greenhouse gas intensive products.
Global supply chain disruptions, natural disasters, antidumping and countervailing duty petitions regarding certain engines imported into the U.S. from China, and other tariffs have, to various and differing degrees, impacted the availability and price of commodities, components, parts, and accessories used in our products. In addition, while most of our commodities, components, parts, or accessories are generally commercially available from a number of sources, certain items are sourced from single suppliers, which has limited, and could continue to limit, the availability of commodities, components, parts, and accessories when such suppliers are unable to meet our production requirements and we are unable to source such items from an alternative supplier in a timely manner to meet our production needs. This occurred at times during the past couple of years. Any continued or new disruption or shortages in the availability of commodities, components, parts, or accessories, including as a result of labor staffing, workforce shortage, or other challenges that our suppliers may experience as a result of financial hardship, pandemics and/or epidemics, natural disasters, and adverse weather, the frequency and intensity of which may be exacerbated by climate change, or other events, our inability to timely or otherwise obtain substitutes for such items, or any deterioration in our relationships with, the financial viability or quality of, or the personnel relationships at, our suppliers, could adversely affect our business and operating results.
•availability of cash or credit on acceptable terms for our customers to finance new product purchases or rent equipment; and
Our Residential segment products generally face a higher and increasing volume of competition thancompared to our Professional segment products given the low barriers to entry resulting in numerous other manufacturers selling products that compete directly with our products. Internationally, our Residential segment products typically face more competition than in the U.S. because many foreign competitors design, manufacture, market, and sell products in their respective countries. In addition, fluctuations in the value of the U.S. dollar may affect the price of our products in foreign markets, thereby impacting their competitiveness. Competitors may move manufacturing operations to low cost countries for significant cost and price reductions, and we may not be able to compete, which could harm our business and operating results.
Our domain names are critical assets for informing consumers about our brand, but they are increasingly targeted by scams.
We face significant risks from cybersquatting, typosquatting, and other domain name scams that target our trademarks, trade names, and brand identity. These activities involve registering domain names that are identical or confusingly similar to our intellectual property, often for resale at inflated prices or to mislead consumers. Common schemes include: cybersquatting (registering our marks as domain names to demand payment for transfer); typosquatting and look-alike domains (using minor variations of our legitimate domains to divert traffic); and homograph attacks (exploiting internationalized domain names to create visually deceptive domains).
These fraudulent domains may host phishing sites, distribute malware, sell counterfeit goods, or disseminate false information. Such activities can result in: reputational harm through loss of consumer trust and brand dilution; operational disruption through increased costs for monitoring, enforcement, and litigation; and regulatory exposure through potential scrutiny under consumer protection and cybersecurity regulations.
Despite our monitoring and enforcement programs, we cannot guarantee complete prevention or timely remediation of these abuses. If these activities lead to consumer confusion, unauthorized transactions, or data compromise, our business, financial condition, and results of operations could be materially adversely affected.
We purchase commodities, components, parts, and accessories for use in our manufacturing process and end-products or to be sold as stand-alone end-products, such as steel, aluminum, petroleum and natural gas-based resins, linerboard, copper, lead, rubber, engines, transmissions, transaxles, hydraulics, electrification components, and other commodities, components, parts and accessories. Increased costs and/or inflation, increased tariff,tariffs, duties, or other charges as a result of changes to U.S. or international trade policies or trade agreements, trade regulation and/or industry activity, or antidumping and countervailing duty petitions on certain products imported from foreign countries, including certain engines imported into the U.S. from China, or the inability of suppliers to continue operations or otherwise remain in business, have affected our profit margins, operating results and businesses and could continue to result in declines in our profit margins, operating results and businesses. Historically, we have mitigated commodity, component, parts, or accessories cost increases, in part, by increasing prices on some of our products and executing on our strategic productivity initiatives, which include, but are not limited to, collaborating with suppliers, reviewing alternative sourcing options, substituting materials, utilizing Lean methods, and engaging in internal cost reduction efforts, all as appropriate. However, during the past couple of years, we experienced higher material, manufacturing, and freight costs, which adversely affected our margins, and we may not be able to fully offset increased commodity, component, parts, or accessories costs in the future. Further, if our price increases are not accepted by our customers and the market, our net sales, profit margins, earnings, and market share could be adversely affected.
In addition, if adverse economic conditions, business conditions or other events cause a decline in sales by our channel customers or weakens their financial condition, including insolvency or bankruptcy, our net sales and earnings could be adversely affected. Such situation could adversely affect the ability of such customers to pay amounts owed, which could require us to repurchase financed product.
•increased costs of customizing and/or certifying products for foreign countries;
•national and international conflicts, includingpolitical instability or tensions (such as the current geopolitical tensions involving China and Taiwan, the ongoing war between UkraineRussia and Russia, the war between IsraelUkraine, and Hamas,Middle geopoliticalEast tensionsconflicts and wars), foreign policy changes, acts of war or terrorist acts;
Recently announced and future tariffs and other trade restrictions could materially and adversely affect our business, financial condition and results of operations.
In 2025, the U.S. government announced a series of tariffs, including tariffs targeting a broad range of imports and targeted tariffs on goods from specific countries and industries. In response, many countries imposed reciprocal tariffs and other trade restrictions on the United States. Although many of these tariffs, countermeasures and other trade restrictions have since been eased or paused, their initial announcements triggered considerable volatility in global markets and heightened economic uncertainty, and the global trade situation, particularly between the United States and China, continues to be highly dynamic. These changes have, and similar changes in the future may continue to, increase the cost or reduce the availability of raw materials and supplies we need to operate, cause customers to advance, delay, reduce, or cancel orders, shift buying patterns, impact demand in our end markets, complicate demand forecasting for us and our customers, increase supply chain complexity and contribute to volatility, a broader economic slowdown or recession. Any of these impacts or changes could materially and adversely affect our business, financial condition and results of operations.
Our strategy to pursue acquisitions and alliances, strong customer relations, and new joint ventures, investments, and partnerships and our recent activities related to Tornado Infrastructure Equipment in this regard involve risk and may not prove to be successful.
One of our strategies is to drive growth in our businesses and expand our global presence through targeted acquisitions and alliances, strong customer relations, and new joint ventures, investments, and partnerships that add value and complement our existing brands and product portfolio. For example, inon SeptemberDecember 2023,8, 2025, we announced athe strategicclose partnershipof withour Lowe's.acquisition of Tornado Infrastructure Equipment.
Our ability to realize any of the anticipated benefits from the acquisition of Tornado Infrastructure Equipment depends on us successfully integrating Tornado Infrastructure Equipment into our business. If we cannot successfully integrate or are delayed in integrating newly acquired businesses or fail to execute our business plan, it would negatively impact our ability to manufacture new products for and to grow our business, which would materially adversely affect our financial condition, results of operations or cash flows. Even if Tornado Infrastructure Equipment is successfully integrated, the benefits of such acquisition may not be realized within the anticipated time frame or at all.
•challenges in harmonizing information technology systems, compliance frameworks, and corporate governance practices related to Tornado Infrastructure Equipment;
•delays in integration related to Tornado Infrastructure Equipment;
•new regulators of businesses that we have acquired or may acquire in the future;
Any of these risks could cause our strategic transactions, including the Tornado Infrastructure Equipment acquisition, not to be as profitable or accretive as expected or planned.
For example, during the third quarter of fiscal 2023,2025, we recorded a non-cash impairment chargescharge of $18.0$81.1 million related to the indefinite-lived Spartan® trade name intangible assetasset. and $133.3 million related to Intimidator goodwill. TheseThis impairment chargescharge resulted in a $36.7$19.7 million income tax benefit (deferred tax asset) associated with the remaining tax deductible basis in goodwill and other intangible assets.
Increased scrutiny regarding our ESGsustainability practices could impact our reputation.
Increasing governmental and societal attention to ESGsustainability matters, including expanding mandatory and voluntary reporting, and disclosure topics such as climate change, sustainability, natural resources, waste reduction, energy, human capital, and risk oversight could expand the nature, scope, and complexity of matters that we are required to control, assess, and report. We strive to deliver shared value through our business and our diverse stakeholders expect us to make progress in certain ESGsustainability priority issue areas. To address this growing set of matters, we havecontinue takento several actions, including hiring a new executive officer with responsibility for sustainability in July 2023, devoting additionaldevote dedicated employee resources,resources andwhile creatingutilizing a cross-functional/business sustainability leadership team to further develop and implement an enterprise-wide sustainability strategy. InEach June 2023,year, we releasedrelease our sustainability report for fiscal 2022,report, which highlights certain aspirations and goals related to ESGsustainability matters, such as goals to increase battery and hybrid product sales,sales and plans to reduce certain GHG emissions over time, and goals to increase the number of women and racial and ethnic minorities in leadership positions.time. No assurance can be provided that we will achieve our new sustainability goals. It is possible that we may be unsuccessful in the achievement of our ESGsustainability goals, on a timely basis or at all, or that the costs to achieve those goals become prohibitively expensive. Furthermore, our stakeholders may not be satisfied with our initiatives or efforts or the speed at which we are progressing towards any such aspirations and goals. Additionally, organizations that inform investors on ESGsustainability matters have developed rating systems for evaluating companies on their approach to ESG.sustainability. Unfavorable ratings may lead to negative investor sentiment, which could negatively impact our stock price. Any failure, or perceived failure, to respond to ESGsustainability concerns could harm our business and reputation. Certain challenges we face in the achievement of our ESGsustainability objectives are also captured within our ESGsustainability reporting in our most recent sustainability report for fiscal 2022,report, which is not incorporated by reference into and does not form any part of this report.
We may be required to incur impairment and other charges resulting from the impairment of goodwill or tangible or intangible assets recorded in connection with acquisitions or due to exit or disposal activities.
We incurred non-cash impairment charges during the third quarter of fiscal 2023 which adversely affected our third quarter and full year fiscal 2023 operating results and we may be required to incur additional future impairment and other charges, which could adversely affect our operating results.
In connection with our acquisitions and other business combinations, applicable accounting standards require the net tangible and intangible assets of the acquired business to be recorded on our consolidated balance sheet at their fair values as of the date of acquisition and any excess in the purchase price paid by us over the fair value of net tangible and intangible assets of any acquired business to be recorded as goodwill. Goodwill and indefinite-lived intangible assets are not amortized, but are tested at least annually for impairment or more frequently as events and circumstances dictate. Goodwill is tested for impairment at the reporting unit level, which is generally an operating segment or underlying business component. Indefinite-lived intangible assets are tested for impairment at the individual indefinite-lived intangible asset or asset group level, as appropriate.level. Finite-lived intangible assets other than goodwill considered long-lived assets for impairment testing purposes, are tested for impairment as events and circumstances dictate, and are required to be amortized over their estimated useful lives and this amortization expense may be significant to our ongoing financial results.
If we determine that the anticipated future cash flows from our reporting units, indefinite-lived intangible assets or asset groups,assets, or long-lived asset groups may be less than their respective carrying values, our goodwill, indefinite-lived intangible assets, and/or long-lived assets may be deemed to be impaired. If this occurs, applicable accounting rules may require us to write downwrite-down the value of the goodwill, indefinite-lived intangible assets, and/or long-lived assets on our balance sheet to reflect the extent of any such impairment. Any such write-down of goodwill, indefinite-lived intangible assets, and/or long-lived assets would generally be recognized as a non-cash expense in our Consolidated Statements of Earnings for the accounting period during which any such write downwrite-down occurs.
For example, during the third quarter of fiscal 2023,2025, we recorded a non-cash impairment chargescharge of $18.0$81.1 million related to the indefinite-lived Spartan trade name intangible assetasset. and $133.3 million related to Intimidator goodwill. TheseThis impairment chargescharge resulted in a $36.7$19.7 million income tax benefit (deferred tax asset) associated with the remaining tax deductible basis in goodwill and other intangible assets. As of October 31, 2024,2025, we had goodwill of $450.3$450.9 million, which is maintained in various reporting units, and indefinite-lived intangible assets of $271.6$190.6 million, which together comprise 20.118.7 percent of our total assets as of October 31, 2024.2025. For additional information regarding the impairment charge, refer to Note 5, Goodwill and Other Intangible Assets, in our Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. Any future impairment charges could be significant and could adversely affect our future consolidated operating results and financial condition.
Exit or disposal activities include but are not limited to restructuring, such as the sale or termination of a line of business or product, the exit of business activities in a particular location, the termination of employees under a plan of termination, the relocation of business activities from one location to another, changes in management or business structure, and or fundamental reorganization that affects the nature and focus of operations.
We are subject to numerous international, federal, state, municipal and other governmental laws, rules, policies, regulations, and orders ("Laws") relating to, among other things; climate change; emissions to air, including engine emission requirements;
We are subject to numerous international, federal, state, municipal and other governmental laws, rules, policies, regulations, and orders ("Laws") relating to, among other things; climate change; emissions to air, including engine emission requirements; discharges to water; restrictions placed on water usage and water availability; product and associated packaging; use of certain chemicals; restricted substances, including "conflict minerals" disclosure rules; import and export compliance, including country of origin certification requirements; worker and product user health and safety; energy efficiency; productextended life-cyclesproducer responsibility; outdoor noise laws; the generation, use, handling, labeling, collection, management, storage, transportation, treatment, and disposal of hazardous substances, wastes, and other regulated materials; and the registration of certain technologies with various government agencies throughout the world and operation of those technologies within the limits imposed by those agencies, including but not limited to cybersecurity, radio frequency, broadband or other wireless technologies and technologies within the airspace of commercial airplanes, such as unmanned aerial systems. In addition, Laws may adversely affect our operating results, including, (i) to address health and safety requirements, (ii) taxation and tax policy changes, tax rate changes, new tax laws, or revised tax law interpretations or guidance, which individually or in combination may cause our effective tax rate to increase or result in tax charges, (iii) changes to, or adoption of new, healthcare laws or regulations, or (iv) changes to U.S. or international trade policies or agreements, or trade regulation and/or industry activity, including antidumping and countervailing duty petitions on certain products imported from foreign countries, including certain engines imported in the U.S. from China, that could result in additional tariffs, duties or other charges on commodities, components, parts or accessories that we import and/or use in our products.
Although we believe that we are in substantial compliance with currently applicable Laws, we are unable to predict the ultimate impact of adopted or future Laws on our company, business, properties, or products. Any of these Laws may cause us to incur significant expenses to achieve or maintain compliance, require us to modify our products, adversely affect the price of, or demand for, some of our products or manufacturing processes, and ultimately affect the way we conduct our operations. Failure to comply with any of these Laws could harm our reputation and/or lead to fines and other penalties, including restrictions on the importation of our products into, and the sale of our products in, one or more jurisdictions. In addition, our competitors may adopt strategies with respect to compliance with any such Laws that differ significantly from ours. This may change customer preferences and our markets in unanticipated ways which may adversely affect market demand for our products and our net sales and financial results. Other Laws impacting our supply chain, such as the United Kingdom Modern Slavery Act,Act (and equivalent laws in California, Australia, and Canada) or data privacy requirements, such as the EU's General Data Protection Regulation, the California Consumer Privacy Act, and other emerging domestic and global data privacy and cybersecurity laws, may have similar consequences.
We are currently subject to rules limiting exhaust and otherevaporative emissions and other climate-related rules and regulations in certain jurisdictions where we operate. Concern over climate change has resulted in, and could continue to result in, new legal or regulatory requirements designed to reduce or mitigate the effects of greenhouse gases. An example of such legislation is California's AB 1346, requires that most new sales of small off-road engines, such as those installed in certain of our products, including leaf blowers and lawnmowers, sold in the state of California on or after January 1, 20242024, must be zero-emission. We may become subject to additional legislation, regulations, or accords regarding climate change, and compliance with any new rules could be difficult and costly as a result of increased energy, environmental, and other costs and capital expenditures to comply with any such legislation, regulation, or accord or could otherwise decrease demand for our products.
We have set certain aspirations and goals related to ESGsustainability matters, such as goals to increase battery and hybrid product sales, plans to reduce certain GHG emissions over time, and goals to increase the number of women and racial and ethnic minorities in leadership positions. We also set goals and objectives for the timing of certain accomplishments, initiatives and milestones regarding our business or operating results, including without limitation our "Amplifying Maximum Productivity" or AMP initiative, which is a multi-year productivity initiative intended to result in annualized cost savings of more than $100$125 million by fiscal 2027, driven by sustainable supply-base, design-to-value, route-to-market, and operational efficiency transformation. Whether we achieve our goals and objectives of such initiatives can vary due to several factors, including the risk factors described in this Annual Report on Form 10-K. It is possible that we may be unsuccessful in the achievement of our goals, on a timely basis or at all. A delay, failure or perceived failure or delay to achieve such goals and objectives in the time periods that we anticipate, or at all, could have an adverse effect on our business, operating results and financial condition, and the public perception of our business.
Management's Discussion & Analysis (MD&A)
New heading “Impairment of Spartan Trade Name”
New heading “Annual Impairment Analysis”
Removed heading “Fiscal 2023 Impairment”
Largest changes
“Our debt agreements contain customary representations and warranties of the company, event of default provisions, as well as certain customary covenants, including, without limitation, financial covenants, such as the maintenance of a maximum leverage ratio; and negative covenants, which among other things, limit cash dividends, disposition of assets, consolidations and mergers, liens, and other matters customarily restricted in such agreements. …”see in full comparison
“During the third quarter of fiscal 2025, we recorded an impairment charge of $81.1 million related to the indefinite-lived Spartan trade name intangible asset reported under the Professional segment. Subsequent to this impairment charge, the indefinite-lived Spartan trade name intangible asset is fully impaired, resulting in a carrying value of zero. This impairment charge is included in the Non-cash impairment charge caption on the Consolidated Statements of Earnings. …”see in full comparison
“During the preparation of the financial statements for the third quarter of fiscal 2023, we concluded that impairment indicators existed for our Intimidator goodwill. Based on the resulting impairment assessment performed, we recorded an impairment charge of $133.3 million in the third quarter of fiscal 2023. For additional information regarding the impairment charge, refer to Note 1, Summary of Significant Accounting Policies and Related Data, of the Notes to Consolidated Financial Statements.”see in full comparison
Full comparison: every changed paragraph (77)
•Consolidated net sales for fiscal 20242025 were $4,583.8$4,510.4 million, ana increasedecrease of 0.71.6 percent compared to $4,553.2$4,583.8 million in fiscal 2023.2024.
•Professional segment net sales for fiscal 20242025 were $3,556.9$3,624.0 million, aan decreaseincrease of 3.21.9 percent compared to $3,674.6$3,556.9 million in fiscal 2023.2024.
•Residential segment net sales for fiscal 20242025 were $998.3$858.4 million, ana increasedecrease of 16.914.0 percent compared to $854.2$998.3 million in fiscal 2023.2024.
•Gross margin was 33.8 percent in fiscal 2024, a decrease of 80 basis points compared to 34.6 percent in fiscal 2023.
•Adjusted grossGross margin was 33.933.4 percent in fiscal 2024,2025, a decrease of 8040 basis points compared to 34.733.8 percent in fiscal 2023.2024.
•SG&AAdjusted expensegross asmargin awas percentage34.1 of net salespercent in fiscal 2024 was 22.2 percent,2025, an increase of 4020 basis points compared to 21.833.9 percent in fiscal 2023.2024.
•SG&A expense as a percentage of net sales in fiscal 2025 was 22.5 percent, an increase of 30 basis points compared to 22.2 percent in fiscal 2024.
•Net earnings for fiscal 2024 were $418.9 million, or $4.01 per diluted share, compared to $329.7 million, or $3.13 per diluted share, in fiscal 2023.
•Adjusted netNet earnings for fiscal 20242025 were $435.2$316.1 million, or $4.17$3.17 per diluted share, compared to $443.5$418.9 million, or $4.21$4.01 per diluted share, in fiscal 2023.2024.
•Adjusted net earnings for fiscal 2025 were $419.6 million, or $4.20 per diluted share, compared to $435.2 million, or $4.17 per diluted share, in fiscal 2024.
•Field inventory was higherlower as of the end of fiscal 20242025 compared to the end of fiscal 2023,2024, primarily due to increaseddecreased shipmentsbalances of golf and grounds and constructionturf products driven by improved manufacturing output and increased shipments of lawn care equipment to our mass channel partners,products, partially offset by lowerhigher shipmentsbalances of snowunderground andconstruction ice management products and reductions in dealer field inventories of lawn care equipment.products.
•Our order backlog represents unfulfilled customer orders at a point in time. Our order backlog (including shipments beyond 12 months) decreased $0.4 billion to $0.8 billion toas of October 31, 2025 from $1.2 billion as of October 31, 2024 from $2.0 billion as of October 31, 2023,2024, primarily driven by improved manufacturing output.output Ourand more normalized order backlogpatterns. remainsAlthough significantlywe elevated over what the company would consider normal, duecontinue to see sustained demand for underground construction and golf and grounds andproducts, undergroundwe constructionexpect products continuingbacklog to outpacenormalize productionby ofmid-fiscal such2026 products.given our improved manufacturing output and lower lead times.
We continued our history of paying quarterly cash dividends throughout fiscal 20242025 and increased our fiscal 20242025 quarterly cash dividend by 5.95.6 percent to $0.36$0.38 per share compared to $0.34$0.36 per share paid in fiscal 2023.2024. We also repurchased shares of our common stock under our shareBoard authorized stock repurchase program,program ("stock repurchase program"), thereby reducing our total shares of common stock outstanding. As a result of the combination of quarterly cash dividends and sharecommon stock repurchases, we returned $395.0$441.1 million of cash to our shareholders during fiscal 2024.2025. As of October 31, 2024,2025, we had a strong liquidity profile with available liquidity of $1,096.8$1,238.9 million, consisting of cash and cash equivalents of $199.5$341.0 million and availability under our revolving credit facility of $897.3$897.9 million.
Tariffs
The tariff environment is complex and evolving. Our business has incurred, and expects to continue to incur, additional costs as it relates to tariffs. We have taken and will continue to take action to mitigate inflationary pressures caused by tariffs through a combination of targeted price increases, strategic sourcing adjustments, manufacturing and product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures.
In the first quarter of fiscal 2024, we launched a significant productivity initiative named AMP, which is a multi-year initiative intendednow on track to resultachieve inat annualizedleast cost$125 savingsmillion of morerun-rate than $100 millionsavings by fiscal 2027, up from the initial program estimate of at least $100 million. The program is driven by sustainable supply-base, design-to-value, route-to-market, and operational efficiency transformation. We expect to reinvest a portion of the savings from this initiative to drive further innovation and growth. We have recognized $3.8 millionAs of the fourth quarter of fiscal 2025, the AMP initiative has delivered cumulative cost savings as of October 31, 2024, which amounts to an estimated $14.5$78.5 million ofand anticipated annualized cost savings.savings of $86.2 million. Refer to the section titled "Non-GAAP Financial Measures" for information about the productivity initiative charges incurred to generate these savings.
Impairment of Spartan Trade Name
During the third quarter of fiscal 2025, we recorded an impairment charge of $81.1 million related to the indefinite-lived Spartan trade name intangible asset reported under the Professional segment. Subsequent to this impairment charge, the indefinite-lived Spartan trade name intangible asset is fully impaired, resulting in a carrying value of zero. This impairment charge is included in the Non-cash impairment charge caption on the Consolidated Statements of Earnings. The impairment charge resulted in a $19.7 million income tax benefit (deferred tax asset) associated with the remaining tax deductible basis of the intangible asset. For additional information regarding the impairment charge, refer to Note 5, Goodwill and Other Intangible Assets, in our Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Tax
On July 4, 2025, new U.S tax legislation was signed into law (known as the "One Big Beautiful Bill Act" or "OBBB") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBB makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026 or later. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.
Consolidated net sales in fiscal 20242025 were $4,583.8$4,510.4 million compared to $4,553.2$4,583.8 million in fiscal 2023,2024, ana increasedecrease of 0.71.6 percent. This net sales increasedecrease was primarily driven by higher shipments oflower Residential segment products,shipments and prior year divestitures, partially offset by lowernet shipmentsprice ofrealization and higher Professional segment products.shipments.
Net sales in international markets were $923.0$878.3 million for fiscal 20242025 compared to $947.7$923.0 million in fiscal 2023,2024, a decrease of 2.64.8 percent. The international net sales decrease was primarily driven by lower shipments of both Residential segment products, partially offset by higher shipments ofand Professional segment products. Changes in foreign currency exchange rates resulted in a decrease in our net sales of $4.1$4.2 million in fiscal 2024.2025.
Gross profit represents net sales less cost of sales and gross margin represents gross profit as a percentage of net sales. Refer to Note 1, Summary of Significant Accounting Policies and Related Data, of the Notes to Consolidated Financial Statements within the section entitled "Cost of Sales," for a description of expenses included in cost of sales. Gross profit for fiscal 20242025 was $1,549.3$1,504.8 million, down 1.82.9 percent compared to gross profit of $1,577.6$1,549.3 million in fiscal 2023.2024. Gross margin was 33.4 percent in fiscal 2025 compared to 33.8 percent in fiscal 2024 compared to 34.6 percent in fiscal 2023,2024, a decrease of 8040 basis points. This gross margin decrease was primarily due to lower net sales volume, higher material and manufacturing costscosts, inventory valuation adjustments, and producthigher mix,productivity initiative charges, partially offset by productivity improvements.improvements, net price realization, and product mix.
SG&A expense increaseddecreased $20.4$2.2 million, or 2.00.2 percent, in fiscal 20242025 compared to fiscal 2023.2024. Refer to Note 1, Summary of Significant Accounting Policies and Related Data, of the Notes to Consolidated Financial Statements within the section entitled "Selling, General and Administrative Expense" for a description of expenses included in SG&A expense. As a percentage of net sales, SG&A expense was 22.5 percent in fiscal 2025 compared to 22.2 percent in fiscal 2024 compared to 21.8 percent in fiscal 2023,2024, an increase of 4030 basis points. The increase in SG&A expense as a percentage of net sales was primarily drivendue byto lower net sales volume and higher corporateincentive expenses, partially offset by lowercost marketingsavings costs.measures.
Non-Cash Impairment ChargesCharge
We recorded a non-cash impairment chargescharge of $151.3$81.1 million within our ProfessionalOther segmentactivities in fiscal 2023.2025. No impairment charges were recognized in fiscal 2024.
Interest expense primarily consists of interest costs incurred on outstanding borrowings related to our fixed and variable interest rate debt arrangements, as well as amortization of the debt issuance costs associated with our debt arrangements. Interest expense for fiscal 20242025 increaseddecreased $3.2$2.8 million compared to fiscal 2023.2024. This increasedecrease was primarily driven by higherlower average interest rates, partially offset by lower average outstanding borrowings, in each caserates during fiscal 20242025 compared to fiscal 2023.2024.
Other income, net for fiscal 20242025 was $41.4$26.8 million compared to $28.5$41.4 million in fiscal 2023,2024, ana increasedecrease of $12.9$14.6 million.million in fiscal 2025 as compared to fiscal 2024. This increasedecrease in other income, net was primarily due to prior year net gains on divestituresdivestitures, incurrent fiscalyear 2024net losses on divestitures, prior year net favorable legal settlement activity, and higherlower income from our Red Iron joint ventureventure, inpartially fiscaloffset 2024by asthe comparedfavorable toimpact fiscalfrom 2023.derivative instruments.
The effective tax rate for fiscal 20242025 was 18.316.3 percent compared to 17.718.3 percent in fiscal 2023.2024. The increasedecrease in the effective tax rate for fiscal 20242025 was primarily due to the impact of the non-cash impairment chargescharge and a more favorable geographic mix of earnings in the priorcurrent yearyear, andpartially offset by lower tax benefits recorded as excess tax deductions for stock compensation in the current year, partially offset by a more favorable geographic mix of earnings in the current year.compensation. The adjusted effective tax rate for fiscal 20242025 was 18.817.8 percent, compared to an adjusted effective tax rate of 20.418.8 percent in fiscal 2023.2024. The decrease in the adjusted effective tax rate was primarily due to a more favorable geographic mix of earnings.
Fiscal 20242025 net earnings were $418.9$316.1 million compared to $329.7$418.9 million in fiscal 2023,2024, ana increasedecrease of 27.124.5 percent. Fiscal 20242025 diluted net earnings per share were $4.01,$3.17, ana increasedecrease of 28.120.9 percent from $3.13$4.01 per diluted share in fiscal 2023.2024. The increasedecrease in net earnings per diluted share for fiscal 20242025 was primarily due to the non-cash impairment chargescharge, inhigher theproductivity priorinitiative yearcharges, lower Residential segment earnings, and higher Residentialincentive segment earnings in the current year,expenses, partially offset by lowerhigher Professional segment earnings and higherlower corporateshares expenses in the current year.outstanding. Adjusted net earnings for fiscal 20242025 were $419.6 million, or $4.20 per diluted share, compared to $435.2 million, or $4.17 per diluted share, compared to $443.5 million, or $4.21 per diluted share, in fiscal 2023.2024.
As more fully described in Note 3, Segment Data, of the Notes to Consolidated Financial Statements, we operate in two reportable business segments: Professional and Residential. Segment earnings (loss) before interest and taxes ("EBIT") for our Professional and Residential reportable segments are defined as earnings from operations plus other income, net. Our remaining activities consisting of a wholly-owned domestic distribution company, Red Iron joint venture, certain corporate activities, impairment charges, and the elimination of intersegment revenues and expenses, are presented as "Other" due to their insignificance. Corporate activities include general corporate expenditures, such as finance, human resources, legal, information technology, public relations, business development, and similar activities, asproductivity wellinitiative ascharges, and other unallocated corporate assets and liabilities, such as corporate facilities and deferred tax assets and liabilities. The following information provides perspective on the net sales and operating results of our reportable business segments and Other activities.
Professional segment net sales represented 77.680.3 percent and 80.777.6 percent of consolidated net sales for fiscal 20242025 and 2023,2024, respectively. The following table presents our Professional segment's net sales, earnings,EBIT, and earningsEBIT margin (dollars in millions):
Net sales for our Professional segment in fiscal 20242025 decreasedincreased 3.21.9 percent compared to fiscal 2023.2024. This decreaseincrease was primarily driven by lowerhigher shipments of lawngolf, care equipment, snowgrounds, and iceunderground managementconstruction products, andas compactwell utilityas loaders,net price realization, partially offset by higherprior year divestitures and lower shipments of golf and grounds and undergroundspecialty construction products.
Professional Segment EarningsEBIT
Professional segment earningsEBIT increased 25.510.0 percent in fiscal 20242025 compared to fiscal 2023,2024, and Professional segment earningsEBIT margin increased to 18.019.4 percent from 13.918.0 percent. The increase in Professional segment earningsEBIT margin for fiscal 20242025 was primarily drivendue byto thenet non-cashprice impairment charges in the prior year,realization, productivity improvements, andcost productsavings mix,measures, partially offset by higher material and manufacturing costs and lowerinventory netvaluation sales volume.adjustments.
Residential segment net sales represented 21.819.0 percent and 18.821.8 percent of consolidated net sales for fiscal 20242025 and 2023,2024, respectively. The following table presents our Residential segment's net sales, earnings,EBIT, and earningsEBIT margin (dollars in millions):
Net sales for our Residential segment in fiscal 20242025 increaseddecreased by 16.914.0 percent compared to fiscal 2023.2024. This increasedecrease was primarily driven by higher shipments of lawn care products to our mass channel, partially offset by lower shipments ofbroadly snowacross products.the segment, as well as the prior year Pope divestiture.
Residential Segment EarningsEBIT
Residential segment earningsEBIT increaseddecreased 13.854.3 percent in fiscal 20242025 compared to fiscal 2023,2024, and Residential segment earningsEBIT margin decreased to 7.94.2 percent from 8.17.9 percent. ThisThe decrease in Residential segment earningsEBIT margin decreasefor fiscal 2025 was primarily driven by productlower mixnet andsales volume, higher material and manufacturing costs, and inventory valuation adjustments, partially offset by productivity improvements and netcost salessavings leverage.measures.
Net sales for our Other activities consist of sales from a wholly-owned domestic distribution company less intercompany sales from our Professional and Residential business segments to thea wholly-owned domestic distribution company. Net sales for our Other activities represented 0.60.7 percent and 0.50.6 percent of consolidated net sales for fiscal 20242025 and 2023,2024, respectively.
The following table presents net sales and operatingEBIT loss(Loss) for our Other activities (dollars in millions):
1 Presentation of fiscal 2024 EBIT (Loss) has been conformed to the current year presentation.
Net sales for our Other activities includes sales from oura wholly-owned domestic distribution company net of intersegment sales from the Professional and Residential segments to the distribution company. Net sales for our Other activities in fiscal 20242025 increaseddecreased $4.2$0.6 million compared to fiscal 2023.2024.
Other OperatingEBIT (Loss)
OperatingThe loss before interest and taxes for our Other activities increased $27.0$159.0 million in fiscal 20242025 compared to fiscal 2023.2024. This year-over-year operating loss increase was primarily driven by the non-cash impairment charge, higher corporateproductivity expensesinitiative charges, and higher interestincentive expense.expenses.
Our ongoing goal is to maintain requisite inventory levels to meet our anticipated production requirements, avoid manufacturing delays, and meet the demand for our products, as well as working to ensure service parts availability for our customers. The following table highlights several key measures of our working capital performance (dollars in millions except average days outstanding and turnover):
•Average net receivables increaseddecreased by 26.65.2 percent, primarily driven by increasedtiming massof channelshipments and internationallower shipments,net assales well as payment terms to our mass channel.volume. Our average days outstanding for receivables increaseddecreased to 36.8 days in fiscal 2025 compared to 38.2 days in fiscal 2024 compared to 30.4 days in fiscal 2023.2024.
•Average net inventories increased by 2.0 percent, primarily due to higher balances of compact utility loaders and snow and ice management products.
•Average accountsnet payableinventories decreased by 0.43.6 percent, primarily due to thelower timingraw ofmaterials, materialswork purchases.in process, and finished goods balances.
•Average accounts payable decreased by 4.8 percent, primarily due to lower purchases.
Acquisitions and capital expenditures are a significant use of our capital resources. These investments are intended to enable sales growth in new, existing, and expanding markets, help us meet product demand, and increase our manufacturing efficiencies and capacity. In fiscal 2024,2025, cash used in investing activities decreasedincreased $98.0$17.7 million from fiscal 2023.2024. This decreaseincrease was primarily driven by lower proceeds from divestitures, partially offset by lower purchases of property, plant, and equipment, higher cash inflows from divestitures, and lower cash outflows for acquisitions,equipment in eachthe casecurrent duringyear fiscal 2024period compared to fiscalthe 2023.prior period.
In fiscal 2024,2025, cash used in financing activities increaseddecreased $357.6$59.0 million from fiscal 2023.2024. This increasedecrease was mainly due to net debt repayments in the prior year, partially offset by higher repurchases of common stock,stock changes in activity under the revolving credit facility, and debt repayments, in each case during fiscal 2024 compared to fiscal 2023.repurchases.
Our revolving credit facility has a borrowing capacity of up to $900.0 million that matures on October 2, 2029. Included in the revolving credit facility is a $10.0 million sublimit for standby letters of credit and a $75.0 million sublimit for swingline loans. At our election, and with the approval of the named borrowers on the revolving credit facility and the election of the lenders to fund such increase, the aggregate maximum principal amount available under the revolving credit facility may be increased by an amount of up to $450.0 million. As of October 31, 2025 we had no outstanding borrowings under the revolving credit facility and $2.1 million outstanding under the sublimit for standby letters of credit, resulting in $897.9 million of unutilized availability under our revolving credit facility. As of October 31, 2024 we had no outstanding borrowings under the revolving credit facility and $2.7 million outstanding under the sublimit for standby letters of credit, resulting in $897.3 million of unutilized availability under our revolving credit facility. As of October 31, 2023 we had $40.0 million outstanding borrowings under the revolving credit facility and $2.6 million outstanding under the sublimit for standby letters of credit, resulting in $557.4 million of unutilized availability under our revolving credit facility. As of October 31, 2024,2025, our debt ratings for long-term unsecured senior, non-credit enhanced debt by Standard and Poor's Ratings Group and by Moody's Investors Service were BBB and Baa1, respectively, and in both cases with a stable outlook.
Our debt agreements contain customary representations and warranties of the company, event of default provisions, as well as certain customary covenants, including, without limitation, financial covenants, such as the maintenance of a maximum leverage ratio; and negative covenants, which among other things, limit cash dividends, disposition of assets, consolidations and mergers, liens, and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds, and we were in compliance with all covenants under our outstanding indebtedness as of October 31, 2025. The agreements governing our outstanding indebtedness are described in Note 6, Indebtedness, of the Notes to Consolidated Financial Statements.
The agreements governing our outstanding indebtedness are described in Note 6, Indebtedness, of the Notes to Consolidated Financial Statements. We are in compliance with our debt covenants and other requirements of our revolving credit facility and term loan credit agreements, indentures, and private placement note purchase agreements.
Our debt-to-capitalization ratio decreasedincreased in fiscal 20242025 compared to fiscal 20232024 primarily due to fiscalshareholder 2024 debt repaymentsbuybacks and dividends partially offset by our continued profitability.
ShareCommon Stock Repurchases
Our sharestock repurchase program provides shares for use in connection with our stock-based compensation plans, among other uses, and has no expiration. The following table provides information with respect to repurchases of our common stock during the past two fiscal years (dollars in millions, except share and per share data):
As of October 31, 2024,2025, 8,171,9574,391,790 shares of our common stock remained available for repurchase under our sharestock repurchase program. On December 9, 2025, the company's Board of Directors authorized the repurchase of up to an additional 6,000,000 shares of common stock under the stock repurchase program. This repurchase authorization has no expiration date. We currently expect to continue sharestock repurchases in fiscal 2025,2026, depending on our cash balance, debt repayments, common stock price and other market conditions, our anticipated working capital needs, and/or other factors.
1 On January 13, 2022, we completed our acquisition of Intimidator. Acquisition-related costs for the fiscal year ended October 31, 2023 represent integration costs incurred in connection with the acquisition. For additional information regarding this acquisition, refer to Note 2, Acquisitions and Divestitures, of the Notes to Consolidated Financial Statements.
What changed in the latest 10-Q
Risk Factors
We are affected by risks specific to us, as well as factors that affect all businesses operating in a global market. The material risk factors known to us that could materially adversely affect our business, reputation, industry, operating results, or financial position or could cause our actual results to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made in this report, are described in our most recently filed Annual Report on Form 10-K, Part I, Item 1A. "Risk Factors." There has been no material change in those risk factors.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Manufacturing Facility and Product Line Exits”
New heading “Impairment of Spartan Trade Name”
New heading “Non-Cash Impairment Charges”
New heading “Segment Profit/(Loss)”
Largest changes
“During the third quarter of fiscal 2025, we recorded an impairment charge of $81.1 million related to the indefinite-lived Spartan trade name intangible asset reported under the Professional segment. Subsequent to this impairment charge, the indefinite-lived Spartan trade name intangible asset is fully impaired, resulting in a carrying value of zero. This impairment charge is included in the Non-cash impairment charge caption on the Condensed Consolidated Statements of Earnings (Loss). …”see in full comparison
“During the preparation of the financial statements for the third quarter of fiscal 2026, we recorded non-cash impairment charges of $43.1 million in Other activities related to the planned closure of our Monterrey manufacturing facility and the write-down of assets associated with a residential mower platform. …”see in full comparison
“We recorded non-cash impairment charges of $43.1 million within our Other activities related to the planned closure of our Monterrey manufacturing facility and the write-down of assets associated with the exit of a residential mower platform product line in the third quarter and year-to-date period of fiscal 2026. In the third quarter and year-to-date period of fiscal 2025, we recorded a non-cash impairment charge of $81.1 million within our Other activities related to the Spartan trade name.”see in full comparison
“Anticipated IEEPA refunds are expected to substantially offset incremental tariff headwinds associated with changes to tariff regulations enacted in the second quarter of fiscal 2026.”see in full comparison
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This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our Condensed Consolidated Financial Statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Unless the context indicates otherwise, the terms "company," "TTC," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. This MD&A should be read in conjunction with the MD&A included in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Unless expressly stated otherwise, the comparisons presented in this MD&A refer to the same period in the prior fiscal year. Our MD&A is presented as follows:
The cash consideration, net of cash acquired, was $210.3 million ("purchase price"). The purchase price was funded with borrowings under itsour existing revolving credit facility. We believe that the information available asAs of theJuly closing31, date2026, provideswe ahave reasonablesubstantially basiscompleted our process for estimating fair values of the assets acquired and liabilities assumed; however, we are continuing to finalize these amounts. Thus, the preliminary measurements ofmeasuring the fair values of the assets acquired and liabilities assumed based on information available as of the Tornado Infrastructure Equipment closing date, with the exception of our valuation of income taxes as we require additional information to finalize our valuation of income taxes. Thus, the preliminary measurements of fair value reflected for income taxes are subject to change as additional information becomes available and as additional analysis is performed. We expect to finalize our preliminary valuation of income taxes and complete the allocation of the preliminary measurementsTornado ofInfrastructure fairEquipment valuespurchase price as soon as practicable, but no later than one year from the closing date of the acquisition, as required. For additional information regarding the Tornado Infrastructure Equipment acquisition, refer to Note 2, Acquisitions and DivestituresAcquisition in the Notes to Condensed Consolidated Financial Statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q.
There can be no guarantee that any refund, if received, will equal the full amount of IEEPA tariffs paid, and any refund may be subject to further legal, regulatory, or administrative developments. GivenAs theseof uncertainties,July the31, Company2026, haswe nothave recognizedrecorded anyapproximately benefit$8 ormillion assetas relateda reduction to potential IEEPA tariff refunds ascost of Maygoods 1, 2026.sold. Based on currently available information, thewe Companyestimate estimates itwe may be eligible to recover a total of approximately $20 million of IEEPA tariffs paid.
Anticipated IEEPA refunds are expected to substantially offset incremental tariff headwinds associated with changes to tariff regulations enacted in the second quarter of fiscal 2026.
In the first quarter of fiscal 2024, we launched a significant productivity initiative named AMP, which is a multi-year initiative now on track to achieve at least $125 million of run-rate savings by fiscal 2027, up from the initial program estimate of at least $100 million. The program is driven by sustainable supply-base, design-to-value, route-to-market, and operational efficiency transformation. We expect to reinvest a portion of the savings from this initiative to drive further innovation and growth. As of the secondthird quarter of fiscal 2026, the AMP initiative has delivered cumulative cost savings of $106.8$123.4 million and anticipated annualized cost savings of $105.4$124.9 million. Refer to the section titled "Non-GAAP Financial Measures" for information about the productivity initiative charges incurred to generate these savings.
Manufacturing Facility and Product Line Exits
During the preparation of the financial statements for the third quarter of fiscal 2026, we recorded non-cash impairment charges of $43.1 million in Other activities related to the planned closure of our Monterrey manufacturing facility and the write-down of assets associated with a residential mower platform. These impairment charges are included in the Non-cash impairment charge caption on the Condensed Consolidated Statements of Earnings (Loss), and resulted in a $1.4 million deferred tax asset associated with the remaining tax deductible basis of the manufacturing facility and product line. For additional information regarding these impairment charges, refer to Note 18, Management Actions in our Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Impairment of Spartan Trade Name
During the third quarter of fiscal 2025, we recorded an impairment charge of $81.1 million related to the indefinite-lived Spartan trade name intangible asset reported under the Professional segment. Subsequent to this impairment charge, the indefinite-lived Spartan trade name intangible asset is fully impaired, resulting in a carrying value of zero. This impairment charge is included in the Non-cash impairment charge caption on the Condensed Consolidated Statements of Earnings (Loss). The impairment charge resulted in a $19.7 million income tax benefit (deferred tax asset) associated with the remaining tax deductible basis of the intangible asset. For additional information regarding the impairment charge, refer to Note 5, Goodwill and Other Intangible Assets, Net in our Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Consolidated net sales for the secondthird quarter of fiscal 2026 were $1,424.7$1,225.8 million, up 8.18.4 percent compared to $1,317.9$1,131.3 million in the secondthird quarter of fiscal 2025. For the first sixnine months of fiscal 2026, consolidated net sales were $2,461.0$3,686.8 million, up 6.47.0 percent compared to $2,312.9$3,444.2 million from the same period in the second quarter ofprior fiscal 2025.year.
Professional segment net sales for the secondthird quarter of fiscal 2026 were $1,106.6$1,012.6 million, up 9.18.8 percent compared to $1,014.1$930.8 million in the secondthird quarter of fiscal 2025. For the first sixnine months of fiscal 2026, Professional net sales were $1,930.6$2,943.2 million, an increase of 8.38.5 percent compared to $1,782.9$2,713.7 million infrom the secondsame quarterperiod ofin the prior fiscal year.
Residential segment net sales for the secondthird quarter of fiscal 2026 were $310.4$209.3 million, up 4.48.6 percent compared to $297.4$192.8 million in the secondthird quarter of fiscal 2025. For the first sixnine months of fiscal 2026, Residential net sales were $516.4$725.7 million, aan decreaseincrease of 0.42.0 percent compared to $518.4$711.2 million infrom the secondsame quarterperiod ofin the prior fiscal year.
Net earnings for the secondthird quarter of fiscal 2026 were $145.4$77.0 million, or $1.50$0.81 per diluted share, compared to $136.8$53.5 million, or $1.37$0.54 per diluted share, for the secondthird quarter of fiscal 2025. Net earnings for the first sixnine months of fiscal 2026 were $213.3$290.3 million, or $2.18$2.99 per diluted share, compared to $189.6$243.1 million, or $1.88$2.42 per diluted share, from the same period in the comparableprior fiscal 2025 period.year.
Adjusted net earnings for the secondthird quarter of fiscal 2026 were $155.4$126.8 million, or $1.60$1.33 per diluted share, compared to $141.8$122.5 million, or $1.42$1.24 per diluted share, for the secondthird quarter of fiscal 2025. Adjusted net earnings for the first sixnine months of fiscal 2026 were $228.0$354.8 million, or $2.33$3.66 per diluted share, compared to $207.7$330.2 million, or $2.06$3.29 per diluted share, from the same period in the comparableprior fiscal 2025 period.year.
We maintained our tradition of paying quarterly cash dividends and increased our cash dividend for the secondthird quarter of fiscal 2026 by 2.6 percent to $0.39 per share compared to $0.38 per share paid in the secondthird quarter of fiscal 2025. We also repurchased shares of our common stock under our Board authorized stock repurchase program ("stock repurchase program"), thereby reducing our total shares of common stock outstanding. As a result of the combination of quarterly cash dividends and common stock repurchases, we returned $360.9$470.9 million of cash to our stockholders during the first sixnine months of fiscal 2026.
Field inventory levelswas were lowerhigher as of the end of the secondthird quarter of fiscal 2026 compared to the end of the secondthird quarter of fiscal 2025 asprimarily due to replenished balances approximateof appropriateunderground levelsconstruction acrossproducts allthat producthave categories.reached healthy levels.
Our order backlog represents unfulfilled customer orders at a point in time. Our order backlog as of the end of the secondthird quarter of fiscal 2026 was similar to the end of the fourththird quarter of fiscal 2025 as backlog has largely normalized.
Consolidated net sales for the third quarter of fiscal 2026 were $1,225.8 million, up 8.4 percent compared to $1,131.3 million in the third quarter of fiscal 2025. The increase was primary driven by higher Professional and Residential segment volume, net price realization, and the Tornado acquisition. For the year-to-date period of 2026, consolidated net sales were $3,686.8 million, up 7.0 percent compared to $3,444.2 million from the same period in the prior fiscal year. The increase was primarily driven by net price realization, the Tornado acquisition, and higher Professional segment volume.
Consolidated net sales for the second quarter of fiscal 2026 were $1,424.7 million, up 8.1 percent compared to $1,317.9 million in the second quarter of fiscal 2025. The increase was primary driven by net price realization, the Tornado acquisition, and higher shipments of both Professional and Residential segment products. For the year-to-date period of 2026, consolidated net sales were $2,461.0 million, up 6.4 percent compared to $2,312.9 million in the second quarter of fiscal 2025. The increase was primarily driven by net price realization, higher shipments of Professional segment products, and the Tornado acquisition, partially offset by lower shipments of Residential segment products.
Net sales in international markets increased by $23.2$32.7 million and decreased by $0.7$32.0 million for the secondthird quarter and year-to-date periods of fiscal 2026, respectively. The increase for the secondthird quarter comparison was primarily due to higher shipments of Residential and Professional segment products.volume Forand the year-to-dateTornado period of 2026, net sales outside the US were flat as lower volumes were largely offset by net price realization.acquisition.
Changes in foreign currency exchange rates resulted in an increase in our net sales of approximately $8.0$1.0 million and $12.0$13.0 million for the secondthird quarter and year-to-date periods of fiscal 2026, respectively.
Gross profit for the secondthird quarter of fiscal 2026 was $482.7$418.1 million, up 10.59.5 percent compared to $436.7$381.8 million for the secondthird quarter of fiscal 2025. Gross margin was 33.934.1 percent for the secondthird quarter of fiscal 2026 compared to 33.133.7 percent for the secondthird quarter of fiscal 2025, an increase of 8040 basis points. The increase in gross margin for the secondthird quarter comparison was primarily due to net price realization andrealization, productivity improvements, and net sales leverage, partially offset by higher material, manufacturing,material and freightmanufacturing costs, as well as product mix.costs. Gross profit for the year-to-date period of fiscal 2026 was $819.2$1,237.3 million, up 6.17.2 percent compared to $772.3$1,154.1 million for the same period of fiscal 2025. Gross margin was 33.333.6 percent for the year-to-date period of fiscal 2026 compared to 33.433.5 percent forfrom the same period in the prior yearfiscal comparableyear, period,an a decreaseincrease of (10) basis points. The decreaseincrease in gross margin for the year-to-date comparison was primarily due to higher material, manufacturing, and freight costs and product mix, mostly offset by net price realization and productivity improvements.initiatives, partially offset by higher material and manufacturing costs and product mix.
SG&A expense increased $25.8$23.9 million, or 9.910.1 percent, for the secondthird quarter of fiscal 2026 and increased $17.4$41.3 million, or 3.35.5 percent, for the year-to-date period of fiscal 2026 compared to the same respective periods of fiscal 2025. As a percentage of net sales, SG&A expense increased 40 basis points for the secondthird quarter of fiscal 2026 and decreased 7030 basis points for the year-to-date period of fiscal 2026 compared to the same respective periods of fiscal 2025. The increase in SG&A expense as a percentage of net sales for the secondthird quarter was primarily due to higher warranty and incentive expenses, partially offset by net sales leverage and lower warehousing costs.expenses. The decrease in the year-to-date comparison was primarily due to net sales leverage, lower warehousing costs, and cost savings measures, partially offset by higher warranty and incentive expenses.
Non-Cash Impairment Charges
We recorded non-cash impairment charges of $43.1 million within our Other activities related to the planned closure of our Monterrey manufacturing facility and the write-down of assets associated with the exit of a residential mower platform product line in the third quarter and year-to-date period of fiscal 2026. In the third quarter and year-to-date period of fiscal 2025, we recorded a non-cash impairment charge of $81.1 million within our Other activities related to the Spartan trade name.
Interest expense decreased $1.0$1.3 million and $1.8$3.1 million for the secondthird quarter and year-to-date periods of fiscal 2026, respectively, compared to the same respective periods of fiscal 2025. The decreases in interest expense for the secondthird quarter and year-to-date comparisons were primarily due to lower average interest rates and lower average outstanding borrowings.
Other income, net decreased $6.5$2.6 million and increased $4.2$1.6 million for the secondthird quarter and year-to-date periods of fiscal 2026, respectively, compared to the same respective periods of fiscal 2025. The decrease in other income, net for the secondthird quarter comparison was primarily due to facilitylower exitincome charges,from our Red Iron joint venture, a less favorable net impact from foreign currencycurrency, and derivative instruments, and lower income from our Red Iron joint venture.instruments. The increase in other income, net for the year-to-date comparison was primarily due to net gains on facilitysale exits,of assets, partially offset by lower income from our Red Iron joint venture.
The effective tax rate for the secondthird quarter and year-to date periods of fiscal 2026 was 20.728.0 percent and 21.123.0 percent, respectively, compared to 18.97.4 percent and 19.316.9 percent, respectively, in the secondthird quarter of fiscal 2025, primarily due to the impact of non-recurring adjustments and a less favorable geographic mix of earnings. The adjusted effective tax rate for the secondthird quarter and year to date periods of fiscal 2026 was 21.722.4 percent and 21.621.9 percent, respectively, compared to an adjusted effective tax rate of 18.717.3 percent and 19.218.5 percent, respectively, in the secondthird quarter of fiscal 2025, primarily driven by a less favorable geographic mix of earnings.
Net earnings for the secondthird quarter of fiscal 2026 were $145.4$77.0 million, or $1.50$0.81 per diluted share, compared to $136.8$53.5 million, or $1.37$0.54 per diluted share, for the secondthird quarter of fiscal 2025. Adjusted net earnings for the secondthird quarter of fiscal 2026 were $155.4$126.8 million, or $1.60$1.33 per diluted share, compared to $141.8$122.5 million, or $1.42$1.24 per diluted share, for the secondthird quarter of fiscal 2025, an increase of 12.77.3 percent per diluted share. The increase in net earnings per diluted share for the secondthird quarter comparison was primarily due to higherthe Professionalnon-cash andimpairment Residentialcharge segment earnings, partially offset by higher corporate expenses and higher productivity initiative charges. Net earnings forin the firstprior sixyear months of fiscal 2026 were $213.3 million, or $2.18 per diluted share, compared to $189.6 million, or $1.88 per diluted share, for the same period of fiscal 2025. Adjusted net earnings for the first six months of fiscal 2026 were $228.0 million, or $2.33 per diluted share, compared to $207.7 million, or $2.06 per diluted share, for the same year-to-date period of fiscal 2025, an increase of 13.1% per diluted share. The increase in net earnings per diluted share for the second quarter comparison was primarily due toand higher Professional and Residential segment earnings.profit in the current year, partially offset by higher productivity initiative charges and higher tax expenses in the current quarter.
Net earnings for the first nine months of fiscal 2026 were $290.3 million, or $2.99 per diluted share, compared to $243.1 million, or $2.42 per diluted share, for the same period of fiscal 2025. Adjusted net earnings for the first nine months of fiscal 2026 were $354.8 million, or $3.66 per diluted share, compared to $330.2 million, or $3.29 per diluted share, for the same year-to-date period of fiscal 2025, an increase of 11.2 percent per diluted share. The increase in net earnings per diluted share for the year-to-date comparison was primarily due to the prior year non-cash impairment charge, and higher Professional and Residential segment profit, partially offset by higher productivity initiative charges and higher tax expense.
As more fully described in Note 3, Segment Data, of the Notes to the Condensed Consolidated Financial Statements, we operate in two reportable business segments: Professional and Residential. Segment earnings profit/(loss) before interest and taxes ("EBIT") for our Professional and Residential reportable segments areis defined as adjusted earnings frombefore operationsinterest plusand othertaxes income,"segment net.profit/(loss)". Our remaining activities consisting of a wholly-owned domestic distribution company, Red Iron joint venture, certain corporate activities, impairment charges, and the elimination of intersegment revenues and expenses, are presented as "Other" due to their insignificance. Corporate activities include general corporate expenditures, such as finance, human resources, legal, information technology, public relations, business development, and similar activities, productivity initiative charges, and other unallocated corporate assets and liabilities, such as corporate facilities and deferred tax assets and liabilities. The following tables summarize net sales for our reportable business segments and Other activities:
The following tables summarize EBITsegment profit/(Lossloss) for our reportable business segments and Other activities:
1 Presentation of EBITsegment profit/(Lossloss) for the secondthird quarter of fiscal 2025 has been conformed to the current year presentation.
Worldwide net sales for our Professional segment for the secondthird quarter of fiscal 2026 increased 9.18.8 percent compared to the secondthird quarter of fiscal 2025. This increase was driven primarily by higher volume, net price realization, and the Tornado acquisition, and higher shipments of underground construction equipment and zero-turn mowers.acquisition. Worldwide net sales for our Professional segment for the year-to-date period of fiscal 2026 increased 8.38.5 percent compared to the same period of fiscal 2025. This increase was driven primarily by net price realization, the Tornado acquisition and higher shipmentsvolume of underground construction equipment, zero-turn mowers, and snow and ice management products.products, and stand-on mowers.
Segment EBITProfit/(Loss)
Professional segment profit for the third quarter of fiscal 2026 increased 6.7 percent compared to the third quarter of fiscal 2025, and Professional segment profit margin decreased to 20.9 percent from 21.3 percent in the third quarter of fiscal 2025. The decrease in Professional segment profit margin was primarily due to higher material and manufacturing costs and product mix, partially offset by net price realization, productivity improvements, and net sales leverage. Professional segment profit for the year-to-date period of fiscal 2026 increased 8.7 percent compared to the same period of fiscal 2025, and Professional segment margin increased to 19.5 percent from 19.4 percent for the year-to-date period of fiscal 2025. The increase in Professional segment profit margin was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by higher material and manufacturing costs and product mix.
Professional segment EBIT for the second quarter of fiscal 2026 increased 11.0 percent compared to the second quarter of fiscal 2025, and Professional segment earnings margin increased to 20.3 percent from 19.9 percent in the second quarter of fiscal 2025. The increase in Professional segment earnings margin was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by product mix and higher material, manufacturing, and freight costs. Professional segment EBIT for the year-to-date period of fiscal 2026 increased 9.9 percent compared to the same period of fiscal 2025, and Professional segment margin increased to 18.8 percent from 18.5 percent for the year-to-date period of fiscal 2025. The increase in Professional segment earnings margin was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by product mix and higher material, manufacturing, and freight costs.
Worldwide net sales for our Residential segment for the second quarter of fiscal 2026 increased 4.4 percent compared to the second quarter of fiscal 2025. The increase in Residential segment net sales was primarily driven by net price realization and higher shipments of zero-turn mowers, partially offset by lower shipments of snow products. Worldwide net sales for our Residential segment for the year-to-date period of fiscal 2026 decreased (0.4) percent compared to the same period of fiscal 2025. The decrease in Residential segment net sales was primarily driven by lower shipments of turf products, partially offset by higher shipments of snow products and net price realization.
Segment EBIT
Worldwide net sales for our Residential segment EBIT for the secondthird quarter of fiscal 2026 increased 88.28.6 percent compared to the second quarter of fiscal 2025, and Residential segment earnings margin increased to 9.8 percent from 5.4 percent in the secondthird quarter of fiscal 2025. The increase in Residential segment earningsnet margin for the second quarter of fiscal 2026sales was largelyprimarily driven by nethigher pricevolume realization,of productivitywalk improvements,power prior year inventory valuation adjustments that did not recur, cost savings measures,mowers and net price realization. Worldwide net sales leverage,for partially offset by higher material, manufacturing, and freight costs.our Residential segment EBIT for the year-to-date period of fiscal 2026 increased 30.62.0 percent compared to the same period of fiscal 2025, and Residential segment earnings margin increased to 8.4 percent from 6.4 percent in the year-to-date period of fiscal 2025. The increase in Residential segment earningsnet margin for the year-to-date period of fiscal 2026sales was largelyprimarily driven by net price realization, productivity improvements, cost savings measures,realization and higher snow product mix,volume, partially offset by higherlower material,lawn-care manufacturing,product and freight costs.volume.
Segment Profit/(Loss)
Residential segment profit for the third quarter of fiscal 2026 increased 235.1 percent compared to the third quarter of fiscal 2025, and Residential segment profit margin increased to 5.9 percent from 1.9 percent in the third quarter of fiscal 2025. The increase in Residential segment profit margin for the third quarter of fiscal 2026 was largely driven by productivity improvements, net price realization, net sales leverage, and prior year inventory valuation adjustments that did not recur, partially offset by higher material and manufacturing costs. Residential segment profit for the year-to-date period of fiscal 2026 increased 51.1 percent compared to the same period of fiscal 2025, and Residential segment profit margin increased to 7.7 percent from 5.2 percent in the year-to-date period of fiscal 2025. The increase in Residential segment profit margin for the year-to-date period of fiscal 2026 was largely driven by net price realization, productivity improvements, cost savings measures, and product mix, partially offset by higher material and manufacturing costs.
Net sales for our Other activities includes sales from our wholly-owned domestic distribution company net of intersegment sales from the Professional and Residential segments to the distribution company. Net sales for our Other activities in the secondthird quarter of fiscal 2026 increaseddecreased by $1.3$3.8 million compared to the secondthird quarter of fiscal 2025. Net sales for our Other activities in the year-to-date period of fiscal 2026 increaseddecreased by $2.4$1.4 million compared to the same period in fiscal 2025.
Other EBITProfit (lossLoss)
The operating loss for our Other activities for the secondthird quarter of fiscal 2026 increaseddecreased $22.8$25.8 million compared to the secondthird quarter of fiscal 2025, primarily due to higherthe corporateprior expenses,year non-cash impairment charge, partially offset by higher productivity initiative charges,charges and lowerhigher othercorporate income,expenses partiallyin offsetthe bycurrent lower interest expense.year. The operating loss of our Other Activities for the year-to-date period of fiscal 2026 increaseddecreased $9.2$16.6 million compared to same period in fiscal 2025, primarily due to higherthe corporatenon-cash expensesimpairment andcharge lowerin otherthe income,prior year, partially offset by lower interest expense and lowerhigher productivity initiative charges.charges and higher corporate and incentive expenses.
Our ongoing goal is to maintain requisite inventory levels to meet our anticipated production requirements, avoid manufacturing delays, and meet the demand for our products, as well as working to ensure service parts availability for our customers. Accounts receivable as of the end of the secondthird quarter of fiscal 2026 decreasedincreased $27.4$23.4 million, or 4.55.0 percent, compared to the end of the secondthird quarter of fiscal 2025, primarily driven by timingthe ofTornado shipments.acquisition. Inventory levels were down $196.4$153.5 million, or 17.514.8 percent, as of the secondthird quarter of fiscal 2026 compared to the secondthird quarter of fiscal 2025, primarily driven by lower finished goods balances, primarily related to strong early springmowing season demand for landscape equipment by both homeowners and contractors. Accounts payable increased $35.8$78.6 million, or 6.920.4 percent, as of the end of the secondthird quarter of fiscal 2026 compared to the end of the secondthird quarter of fiscal 2025, primarily due to higher purchases.
Net cash provided by operating activities for the first sixnine months of fiscal 2026 was $293.5$476.2 million compared to $123.1$348.9 million for the first sixnine months of fiscal 2025. This change was primarily due to net favorable fluctuations in working capital and higher net earnings.capital.
Net cash used in investing activities for the first sixnine months of fiscal 2026 was $226.7$248.2 million compared to $42.4$50.7 million for the first sixnine months of fiscal 2025. This change was primarily due to the Tornado Infrastructure Equipment acquisition in the current year period.
Net cash used in financing activities for the first sixnine months of fiscal 2026 was $232.4$396.5 million compared to $104.9$298.1 million for the first sixnine months of fiscal 2025, primarily due to net lower debt borrowings and higher common stock repurchases and net lower debt borrowings,repurchases, partially offset by higher proceeds from the exercise of stock options.
As of MayJuly 1,31, 2026, we had available liquidity of $983.3$1,033.2 million, consisting of cash and cash equivalents of $180.4$175.3 million, of which $144.7$141.3 million was held by our foreign subsidiaries, and availability under our revolving credit facility of $802.9$857.9 million. We believe our current liquidity position, including the funds available through existing, and potential future, financing arrangements and forecasted cash flows from operations will be sufficient to provide the necessary capital resources for our anticipated working capital needs, payroll, and other administrative costs, capital expenditures, lease payments, purchase commitments, contractual obligations, acquisitions, investments, establishment of new facilities, expansion and renovation of existing facilities, financing receivables from customers that are not financed with Red Iron or other third-party financial institutions, contingent consideration payments, debt repayments, interest payments, quarterly cash dividend payments, and common stock repurchases, all as applicable, for at least the next twelve months.
As of MayJuly 1,31, 2026, we had $95.0$40.0 million outstanding borrowings under our revolving credit facility and $2.1 million outstanding under the sublimit for standby letters of credit, which resulted in $802.9$857.9 million of unutilized availability under our revolving credit facility's $900 million borrowing capacity.
Our Board of Directors approved a cash dividend of $0.39 per share for the secondthird quarter of fiscal 2026 that was paid on AprilJuly 13,10, 2026. This was an increase of 2.6 percent over our cash dividend of $0.38 per share for the secondthird quarter of fiscal 2025. We expect to continue paying our quarterly cash dividend to stockholders for the remainder of fiscal 2026.
During the first sixnine months of fiscal 2026, we repurchased 3,125,2543,915,301 shares of our common stock under our stock repurchase program, thereby reducing our total shares of common stock outstanding. As of MayJuly 1,31, 2026, 7,266,5366,476,489 shares of common stock remained available for repurchase under our stock repurchase program. We expect to continue to repurchase shares of our common stock throughout the remainder of fiscal 2026, depending on our cash balance, debt repayments, market conditions, our anticipated working capital needs, the price of our common stock, investment priorities, and/or other factors.
Our customer financing arrangements are described in further detail in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. There have been no material changes to our customer financing arrangements during the first sixnine months of fiscal 2026.
The net amount of receivables financed for dealers and distributors under the arrangement with Red Iron for the sixnine month periods ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025 were $1,387.7$2,107.6 million and $1,346.5$2,019.9 million, respectively. The total amount of net receivables outstanding under the arrangement with Red Iron as of MayJuly 1,31, 2026, MayAugust 2,1, 2025 and October 31, 2025 were $902.5$790.0 million, $1,021.2$821.1 million and $807.6 million, respectively. The total amount of receivables due from Red Iron to us as of MayJuly 1,31, 2026, MayAugust 2,1, 2025 and October 31, 2025 were $32.3$20.5 million, $19.3$33.5 million and $21.6 million, respectively.
The net amount of receivables financed for dealers and distributors under the arrangements with HCFC and the other third-party financial institutions for the sixnine month periods ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025 were $348.3$535.2 million and $319.2$505.7 million, respectively. The total amount of net receivables outstanding under the arrangements with HCFC and the other third-party financial institutions as of MayJuly 1,31, 2026, MayAugust 2,1, 2025, and October 31, 2025 were $292.1$296.0 million, $253.5$272.1 million, and $308.3 million, respectively.
Additionally, as a result of our financing agreements with the other third-party financial institutions, we have also entered into inventory repurchase agreements with the other third-party financial institutions. Under such inventory repurchase agreements, we have agreed to repurchase products repossessed by the other third-party financial institutions. As of MayJuly 1,31, 2026, MayAugust 2,1, 2025, and October 31, 2025, we were contingently liable to repurchase up to a maximum amount of $29.8$31.9 million, $28.9$30.7 million, and $29.0 million, respectively, of inventory related to receivables under these inventory repurchase agreements.
Our financial exposure under these inventory repurchase agreements is limited to the difference between the amount paid to Red Iron, HCFC or other third-party financing institutions for repurchases of inventory and the amount received upon subsequent resale of the repossessed product. We have repurchased immaterial amounts of inventory pursuant to such arrangements for the sixnine months ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025. However, a decline in retail sales or financial difficulties of our distributors or dealers could cause this situation to change and thereby require us to repurchase financed product, which could have an adverse effect on our results of operations, financial position, or cash flows.
The following table provides a reconciliation of the non-GAAP financial performance measures used in this report to the most directly comparable measures calculated and reported in accordance with U.S. GAAP for the three and sixnine month periods ended MayJuly 1,31, 2026 and MayAugust 2,1, 2025:
1 On December 8, 2025, we completed the acquisition of Tornado Infrastructure Equipment. For additional information regarding this acquisition, refer to Note 2, Acquisitions and Divestitures,Acquisition, within the Notes to Condensed Consolidated Financial Statements included within Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q. Acquisition-related costs for the three and sixnine month periods ended MayJuly 1,31, 2026 represent integration costs and amortization of the backlog intangible asset and inventory step-up resulting from purchase accounting adjustments.
TTC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 160 shares, about $14.4K) and open-market sales in 5 filings (4 insiders, 5 trade dates, 15,079 shares, about $1.4M). Net open-market shares: -14,919 (purchases minus sales); net value about -$1.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-08 | Funk Edric C |
Open-market sale | 145 | $94.36 | $13.7K |
| 2026-09-02 | Funk Edric C |
Option exercise | 6,248 | $99.15 | $619.4K |
| 2026-09-02 | Funk Edric C |
Shares withheld for tax | 2,849 | $99.15 | $282.5K |
| 2026-07-13 | Totsky Joanna M. |
Option exercise | 20 | $93.33 | $1.9K |
| 2026-07-13 | Totsky Joanna M. |
Shares withheld for tax | 6 | $93.33 | $560 |
| 2026-06-26 | Funk Edric C |
Open-market sale | 247 | $97.97 | $24.2K |
| 2026-06-26 | Funk Edric C |
Open-market sale | 856 | $97.98 | $83.9K |
| 2026-06-26 | Funk Edric C |
Open-market sale | 280 | $97.98 | $27.4K |
| 2026-06-23 | Svendsen Kurt D |
Option exercise | 6,600 | $56.54 | $373.2K |
| 2026-06-23 | Svendsen Kurt D |
Open-market sale | 6,600 | $93.09 | $614.4K |
| 2026-06-22 | Totsky Joanna M. |
Shares withheld for tax | 2,168 | $92.19 | $199.9K |
| 2026-06-22 | Totsky Joanna M. |
Option exercise | 4,859 | $92.19 | $448.0K |
| 2026-06-16 | Drake Angela C |
Open-market purchase | 160 | $90.01 | $14.4K |
| 2026-06-11 | Moeller Peter D |
Open-market sale | 480 | $93.45 | $44.9K |
| 2026-06-11 | Moeller Peter D |
Option exercise | 2,000 | $56.54 | $113.1K |
| 2026-06-11 | Moeller Peter D |
Open-market sale | 1,320 | $93.40 | $123.3K |
| 2026-06-11 | Moeller Peter D |
Open-market sale | 100 | $93.41 | $9.3K |
| 2026-06-11 | Moeller Peter D |
Open-market sale | 100 | $93.41 | $9.3K |
| 2026-06-09 | Ellis Gary Lee |
Option exercise | 4,951 | $47.17 | $233.5K |
| 2026-06-09 | Ellis Gary Lee |
Open-market sale | 4,951 | $91.91 | $455.0K |
| 2026-04-14 | Riley Lori |
Shares withheld for tax | 5 | $97.74 | $489 |
| 2026-04-14 | Riley Lori |
Option exercise | 14 | $97.74 | $1.4K |
Well-known investors holding TTC (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 4,421,337 | $429.4M | 0.15% | Reduced 3% |
| Renaissance Technologies | 2026-06-30 | 1,028,000 | $100.1M | 0.14% | Added 2% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 441,753 | $43.0M | 0.1% | Added 49% |
| Millennium Management (Israel Englander) | 2026-06-30 | 367,902 | $35.8M | 0.02% | Added 35% |
| Two Sigma Investments | 2026-06-30 | 139,154 | $13.6M | 0.01% | Added 527% |
| Bridgewater Associates | 2026-06-30 | 114,986 | $11.2M | 0.05% | Added 101% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 91,295 | $8.5M | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 46,267 | $4.5M | 0.0% | Reduced 31% |
| D. E. Shaw & Co. | 2026-06-30 | 39,693 | $3.7M | — | Sold out |
| Renaissance Technologies | 2026-06-30 | 194,200 | $945.8K | 0.0% | Added 8% |
| Two Sigma Investments | 2026-06-30 | 52,250 | $254.5K | 0.0% | New position |