Shares of outdoor equipment business The Toro Company (TTC -4.54%) dropped on Thursday after the company reported financial results for its fiscal first quarter of 2025. As of 2 p.m. ET, The Toro Company stock was down 5% and had hit four-year lows earlier in the day -- disappointing for a stock that had perennially been a long-term market-beater.
In Q1, Toro had net sales of $995 million, which was down less than 1% year over year. Not only is it disappointing to see revenue go down, albeit modestly, this result was also below expectations. Even though management kept its full-year outlook unchanged, missing Q1 expectations seems to be the main reason Toro stock is down today.
Toro is known for its outdoor equipment, such as lawnmowers. At most, management expects 1% year-over-year growth for its net sales in fiscal 2025. Its commercial business is performing pretty well but its residential business is slow. It shipped fewer products in Q1 due to unsold inventory.
In short, it just wasn't a very inspiring quarter for Toro.
One of the things that Toro has been able to do is reward shareholders. Management repurchased $100 million in stock during Q1. And it increased its quarterly dividend by about 6% back in December, marking 21 consecutive years of paying and increasing the dividend.
With a dividend yield at about 2%, Toro's dividend is the most attractive it's been in over a decade, which is something to consider. That said, growth is important when it comes to stock performance. And until Toro's growth picks up (and that doesn't seem to be anytime soon), the stock could continue struggling to outperform the S&P 500.
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