Toro jumps 9% after fiscal-Q4 earnings

Toro Company (TTC.US), US landscaping company, is surging 9% after release of fiscal-Q4 2023 (calendar August - October 2023). Stock launched today's trading with an around-12% bullish price gap, but has trimmed part of those gains later on.

There was a good reason for the share price jump, as earnings turned out to be better-than-expected across almost all key metrics. Revenue and profits dropped compared to a year ago, but less than expected. Margins were better-than-expected and EPS forecast for full fiscal-2024 (calendar November 2023 - October 2024) was in-line with market expectations. Toro said that it expects fiscal-2024 net sales growth in 'low-single-digits', what would be a welcome development following revenue drops in the second half of fiscal-2023. Company said that it intends to improve lead times as well as cut order backlog. A multi-year initiative is expected to result in annualized cost savings exceeding $100 million by fiscal 2027.

Fiscal-Q4 2023 earnings

• Net sales: $983.2 million vs $973.7 million expected (-16% YoY)
  • Professional: $828.9 million vs $898.6 million expected (-12% YoY)
  • Residential: $148.4 million vs $210.6 million expected (-34% YoY)
• Gross profit: $329.6 million vs $312.7 million expected
• Gross margin: 33.5% vs 31.8% expected
• Adjusted operating income: $99.5 million vs $84.5 million expected (-34% YoY)
• Adjusted operating margin: 10.1% vs 8.7% expected
• Adjusted net income: $74.1 million vs $58.7 million expected
• Adjusted EPS: $0.71 vs $0.56 expected ($1.11 a year ago)

Fiscal-2024 forecast

• Adjusted EPS: $4.25-4.35 vs $4.31 expected
• Net sales growth: 'low-single-digit'

Financial dashboard for Toro Company. Source: Bloomberg Finance LP, XTB Research

Taking a look at Toro (TTC.US) chart at D1 interval, we can see that launched today's trading with a massive bullish price gap and tested resistance zone in the $100 area after cash session began. However, bulls failed to hold onto those gains and share price began to move lower. Nevertheless, this pullback seems to have been halted in the support zone ranging between 200-session moving average (purple line) and $96.50 handle, and marked with previous price reaction.

Source: xStation5