The Toro Company (NYSE:TTC) Posts Better-Than-Expected Sales In Q2 CY2026
Outdoor equipment company Toro (NYSE:TTC) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, with sales up 8.4% year on year to $1.23 billion. Its non-GAAP profit of $1.33 per share was 1.7% above analysts’ consensus estimates.
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The Toro Company (TTC) Q2 CY2026 Highlights:
- Revenue: $1.23 billion vs analyst estimates of $1.19 billion (8.4% year-on-year growth, 3% beat)
- Adjusted EPS: $1.33 vs analyst estimates of $1.31 (1.7% beat)
- Management raised its full-year Adjusted EPS guidance to $4.63 at the midpoint, a 1.4% increase
- Operating Margin: 9.4%, up from 5.7% in the same quarter last year
- Free Cash Flow Margin: 13%, down from 18.3% in the same quarter last year
- Market Capitalization: $9.44 billion
"Strong momentum continued in the third quarter, supported by sustained demand across our portfolio and our consistent focus on operational excellence and margin expansion,” said Richard M. Olson, chairman and chief executive officer. “The Professional segment demand drives overall performance, aided by Residential improvement on both the top and bottom line. We continue to reduce inventory and improve working capital. These company initiatives also drive robust free cash flow and value creation for our shareholders, through dividends and share repurchases.”
Company Overview
Ceasing all production to support the war effort during World War II, Toro (NYSE:TTC) offers outdoor equipment for residential, commercial, and agricultural use.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, The Toro Company grew its sales at a sluggish 4.4% compounded annual growth rate. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. The Toro Company’s recent performance shows its demand has slowed as its annualized revenue growth of 2.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
We can better understand the company’s revenue dynamics by analyzing its most important segments, Professional and Residential , which are 82.6% and 17.1% of revenue. Over the last two years, The Toro Company’s Professional revenue (sales to contractors) averaged 4.7% year-on-year growth. On the other hand, its Residential revenue (sales to homeowners) averaged 6.6% declines. 
This quarter, The Toro Company reported year-on-year revenue growth of 8.4%, and its $1.23 billion of revenue exceeded Wall Street’s estimates by 3%.
Looking ahead, sell-side analysts expect revenue to grow 3.2% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and suggests its newer products and services will not lead to better top-line performance yet.
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Operating Margin
The Toro Company has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.6%. This result isn’t too surprising as its gross margin gives it a favorable starting point.
Looking at the trend in its profitability, The Toro Company’s operating margin decreased by 1.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, The Toro Company generated an operating margin profit margin of 9.4%, up 3.7 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
The Toro Company’s unimpressive 4.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
Although it wasn’t great, The Toro Company’s two-year annual EPS growth of 8% topped its 2.9% two-year revenue growth.
Diving into the nuances of The Toro Company’s earnings can give us a better understanding of its performance. A two-year view shows that The Toro Company has repurchased its stock, shrinking its share count by 8.5%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
In Q2, The Toro Company reported adjusted EPS of $1.33, up from $1.24 in the same quarter last year. This print beat analysts’ estimates by 1.7%. Over the next 12 months, Wall Street expects The Toro Company’s full-year EPS to grow 7.4% from $4.58 to $4.92.
Key Takeaways from The Toro Company’s Q2 Results
We enjoyed seeing The Toro Company beat analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance was in line with Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $99.67 immediately after reporting.
The Toro Company had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).