Benzinga | Dec 15, 2021 10:05AM EST

Toro Clocks 14% Sales Growth In Q4; Guides FY22 Adjusted EPS Above Consensus

* Toro Co (NYSE:TTC) reported fourth-quarter FY21 sales growth of 14.2% year-over-year to $960.7 million, beating the consensus of $955.53 million.

* Sales by segments: Professional $732.5 million (+13.7% Y/Y), and Residential $225.2 million (+19.8% Y/Y).

* Adjusted EPS was $0.56, beating the consensus of $0.53.

* Gross margin contracted to 30.1%, compared to 35.7% for the same prior-year period, reflecting higher material and freight costs.

* The operating income declined by 20.7% Y/Y to $74.16 million, and the margin contracted by 340 bps to 7.7%.

* SG&A expense as a percentage of net sales 22.4% versus 24.6% a year ago, driven by volume leverage, partially offset by higher indirect marketing expenses.

* Toro generated cash from operating activities for the year of $555.5 million, compared to $539.4 million a year ago, and adjusted free cash flow of $451.5 million.

* The company held cash and equivalents of $405.6 million as of October 31, 2021.

* FY22 Outlook: Toro expects net sales growth of 8% - 10% and adjusted EPS of $3.90 - $4.10, above the consensus of $3.85.

* "I am excited to announce our new three-year Drive for Five initiative, which will continue to align and engage employees across the enterprise toward collective goals. The core focus of the new initiative will be to exceed $5 billion in annual net sales through organic growth, while improving profitability, by the end of fiscal 2024," said chairman and CEO Richard M. Olson.

* Price Action: TTC shares are trading lower by 0.23% at $98.19 on the last check Wednesday.