The Toro Company ( TTC ) shares are trading lower after the company reported worse-than-expected fourth-quarter 2024 sales and earnings.

The quarterly sales increased 9% year-over-year to $1.076 billion, missing the consensus of $1.09 billion. Adjusted EPS of $0.95 (+34% YoY), missing the consensus of $0.96.

Residential segment sales rose 4.5% YoY to $155.1 million, driven by lawn care shipments despite lower shipments of snow products, and reported the segment loss of $13.8 million, down from $4.5 million profit last year, due to higher costs and expenses despite productivity gains.

Professional segment sales rose 10.3% YoY to $913.9 million, driven by golf, grounds, and construction equipment sales, offset by lower compact loader and snow product shipments. Professional segment earnings rose 36.3% to $169.7 million (18.6% of sales), driven by productivity, sales leverage, and pricing gains despite higher costs.

Adjusted gross margin for the quarter decreased to 32.3% from 33.6% last year, impacted by higher costs despite productivity gains.

Adjusted operating margin for the quarter was 10.9%, up from 10.1% in the same period last year. As of October 31, cash and equivalents stood at $199.5 million.

“We delivered our 15th consecutive year of net sales growth in what remained an extremely dynamic environment,” commented Richard M. Olson, chairman and chief executive officer.

“We are well-positioned to capitalize on future growth opportunities in our attractive end markets, while simultaneously driving profitability improvement. Our significant productivity initiative, named AMP, is off to a great start, and we remain on track to deliver $100 million in run-rate cost savings by fiscal 2027,” added Olson.

FY25 Outlook: Toro expects company net sales growth to be in the range of 0% -1 % and adjusted EPS of $4.25 – $4.40 versus the $4.58 estimate.

Price Action: TTC shares are trading lower by 3.34% At $82.46 at the last check Wednesday.