Mother Nature dealt Toro Co. a winning hand earlier this year when she coated much of the country with record snowfall, boosting sales of the Bloomington company's snow removal equipment.
She's been far less kind this spring, with cold, wet weather keeping homeowners inside and discouraging sales of lawnmowers.
Toro had its professional equipment segment to thank for its 12 percent increase in sales to $631.6 million for its second quarter ended April 29. A nearly 20 percent increase in professional segment sales translated to a 32 percent gain in earnings to $60.3 million for the company because the segment, which makes maintenance equipment for golf courses and landscape contractors, has higher profit margins.
Earnings per share of $1.88 compared with $1.34 a year earlier and topped analysts' estimates of $1.61.
Professional segment sales account for about two-thirds of Toro's revenue. In addition to carrying higher profit margins, they produce a more predictable revenue stream. "Golf and landscape contractor sales, both more of a 'planned purchase,' are less affected by weather," said Sam Darkatsh, an analyst at Raymond James, in a research note.
The expanding global golf market fueled much of the sales increase in the professional segment. China, Korea and Southeast Asia are especially active markets in golf course development, Hoffman said.
The professional segment also benefited from the robust farm economy, which is boosting sales of micro-irrigation products, the company said.
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