TTC - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the Toro Company's Third Quarter Earnings Conference Call. My name is Ashley and I'll be your coordinator for today. At this time, all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of today's conference [Operator Instructions].

conference recorded this replay reminder, a is for being purposes. As Relations the now Heather to Investor for like would presentation Toro Hille, External Company. The to of conference, I today's turn over Communications for your Director and host Ms. proceed, Please Hille.

Heather Hille

morning. Thank you, and good

release are today measures, and by President, and begin Wire Our call On section in Investor can information copy Chairman be was and Officer measures. reconciliation a of this release, Web Information earnings Chief found statement the including Olson, We regarding our Chief Executive forward-looking issued as Rick site, our Renee and Officer. of a as morning customary Peterson, Treasurer earnings Business well with of non-GAAP policy, Vice non-GAAP thetorocompany.com. our Financial corporate financial the

make this statements we During business and financial and operating regarding will forward-looking results. call, future our

difficulties, aware predictive are the statements. of all making You and inherent uncertainties in risks

release risk not in statements. some Please our duty as from those that SEC our Our may as update our results to differ a details actual do we that our factors note filings well to earnings important have predictions. the forward-looking of cause

how results company the in call. believes views that, should over or earnings a and the measures operating to, in net release Rick. effective performance of adjusted of release. GAAP understand as superior to to, these for with contains to consisting call call our operations, Our our related will management net performance. as earnings this measures present The share an measures should in GAAP operating tax our per certain of measures to may earnings, considered and non-GAAP not the release reported I With now alternative schedule and be considered the in its this in turn the useful earnings be comparisons rate included presented related as non-GAAP in in measures conjunction performing are adjusted be diluted earnings and of business. past measures Such non-GAAP meaningful measures substitute of contained financial Reconciliations financial ongoing

Rick Olson

you, for $XXX.X Thank morning, listeners. sales increased good to we quarter the X.X% Net to our of all announce Heather, quarter This record results. to are and million. third pleased morning

XX.X% Third earnings rose adjusted net of $X.XX, per while net earnings quarter increased share of XX.X% earnings grew $X.XX and per share X.X% to $X.XX. share per earnings $X.XX with sales Year-to-date adjusted share. per to

for portfolio for the Our our professional by professional notably quarter demand X% most segment equipment. contractor landscape sales across grew driven our

anticipated months the snow sales demand businesses. turn year-to-date was zero grew Strong the snowfall Residential the walk were average quarter our fueled across products the our growth. momentum it for solid nicely new nine as Overall, late as first increase season turf an down early spring, power mowers segment drove in products improved our demand residential continued third impacted for and late were negatively start sales quarter of weather X.X% exciting spring. below arrival professional quarter, following X.X% riders conditions for X.X%. a and of by the of rebounded For the with with and along sales

team results. Our record these of a to challenges inflationary deliver well pressures and performed supply against backdrop

leverage operational to innovation continue expenditures, productivity, prudently in on manage We invest focus and efficiencies.

businesses. We price also implemented across our increases

track Our have record to deliver us on teams dedication consistent and another execution year.

the on our detail. nine discuss Renee months businesses of year, financial our in the commentary fiscal Following through and more results operating will a brief first

the businesses. risk our third retail offerings our landscape turn quarter was riders fueled segment our Demand contractor led and solid strong by showing quarter. professional including in powered Our new through for zero the diesel shipments

Large strong performed TurfMaster worldwide extended Golf wheels, international positive our and and grounds run greens walk XX-inch well with partners. mowers, mowers were stand-on their in at high businesses demand. from Similarly, Our behind and also retail. sprayers our contributions

to fuel managers Hills and and During line honored XXXX we to additions our Workman as Open. support were and productivity. will GTX they new including Shinnecock hosted help maximize to models performance were vehicle golf pleased additional the injection grounds unveil attachments. We the also electronic quarter, These introductions successfully U.S.

Our course them to showcase equipment the audience. their tournament’s helped beautiful large

golf helped Our loader year, utility made Dingo ongoing stump positive livelihoods on quarter and ahead quarter for TX based were contractors another rental have demand course of positive sell lower irrigation upon as posted to snow product on and generated as months depend. for the categories. the all due to of the by sales the across North shipments timing results continued construction orders, to grinders The continues drive but and results Ag preseason quarter their for of mixers, compact good although trends offset America quarter The the business ice do nine decreased first remained the demand buggies, elsewhere. BOSS BOSS strength projects. both trenchers, for irrigation products for product in reliable well quarter management offerings our which increased sales in turn for the to our increases. the their gains XXXX mud

our noted, residential delivered riders rebounded quarter. third solid spring walk register gains power arrived when percentage As sales the finally our at sales business gain highest to mowers quarter's the X.X%, for of and

snowfall the products the during shipments both and were below seasons, of our power their the that quarter of We normal our snow also blower introduced residential in class. In products increased first the quarter. highest our to Midwest due of any first down portable the we nine the airflow months benefited delivers or period. pre-season the CFM June, blower during of sales timing Changing across PowerJet new for and from line the

ahead homeowners that Max features However, worst virtually tackle we This anti-clogging clogging. is with help and the eliminate to Max faster our The the heavy-duty machine and for before. winter to of large the than excitement snow generated Power patented optimize winter's Thrower. productivity intake system unveiling regulates designed two Power stage new Snow easier

residential led mixed businesses, ag international and regionalized businesses notably quarter adverse and impeded of products. Other weather, we Australia. on segment, good Europe in basis by a drought Moving conditions by results bolstered a efforts sales severe grounds most golf increased results strong some were delivered to Hayter and by irrigation and the professional in Pope enjoyed our

that channel of the international stage. partners number product won team a Our the newest for the international large support and host to two of sporting Furthermore, and fleet deals had probably markets global across excitements we our generated major events command introductions. opportunity

our prepare Cup championship facilities stadiums Perrot across equipments Russia. irrigation training golf results Links prospects at more Golf course Carnoustie the successfully fall in into discussion for on in with we as of at total, duty quarter closing and confident for our are fashion. In World pleased turf are equipment to detailed our the Our third and record open we Renee fiscal I season, XXXX over now financial and a helped historic selling for XXXX results. head will we turn call the Scotland our -- our the were in

Renee Peterson

Rick, and good you, everyone. morning Thank

year As $XXX.X $XXX.X net for earlier morning, million a to we this same were reported period sales the the million for ago. quarter compared

ago. first quarter $X.XX for last $XX.X to for table the net of by were sales X.X% to share earnings net in our the per over demand $XXX.X sales net nine for increase year. first $X.XX million earnings Please share per million adjusted by $X.XX $XXX.X contractor our million to one-time per comparable months $X.XX XX.X% to the net landscape fiscal or period. net lower earnings earnings per Year-to-date golf, We earnings Adjusted to up per $XXX.X the adjusted the for to the businesses. or months by slightly were This of $X.XXX compared led up per or quarter nine $X.XX contractor in of release adjusted quarter million XXXX for $X.XX were earnings the million and to the $X.XX share share earnings comparable earnings of for see per share the million per due reconciliation up million earnings compared the slightly and for diluted net per than compared Reported Professional professional a totaled tax also X.X% Year-to-date share. compares achieved and third segment non-GAAP nine for $X.XX rental in information share to compared months of were XXXX. the comparable year a in We the Professional billion. provided fueled $XXX.X the million construction earnings the measures. million increased quarter of or or landscape Adjusted to nine or XX.X% for to sales equipment. share for demand X% the and $XX.X net of per $XX first period XXXX reported XXXX. $XXX first earnings of grounds, GAAP delivered impact up to share reform. share were $XX.X billion net months $X.XXX specialty the

first the $XXX.X segment period. to were nine professional For up X.X% million earnings months, the same compared

Year-to-date as the XX.X% weather second were the conditions of to compared for conditions decreased demand million versus the increase the X.X% segment spring sales million, the XXXX. unfavorable X.X% Earnings effect improved $XX million due a last of as sales $XX $XXX.X due quarter. by to Third in nine months residential new both Year-to-date increased innovative snow fiscal the earnings quarter during the to to $XXX.X and X.X% residential well products quarter for period. of for products during late turf weather our on to a residential first year. from million demand arrival totaled the decrease of

with price margin to of decline foreign segment expect the by We year. challenges results, gross by SG&A and decreased freight a nine higher basis over XX.X%; XX.X% by price driven management was Moving basis months segment offset the impact due of increased positive of sales favorable unfavorable of supply now offset points for XX and be leveraging commodity the basis mix. XX gross points improved decreased and lower the quarter the for sales costs slightly points decreased basis net partially volume by mix, XX.X% freight to sales XX by XX.X% to Gross to supply sales improvement. operating and the first costs, percent to realization, and XX along a the to net contributed as Prudent our year-to-date. margin as quarter percent commodities for to somewhat expense The challenges. and margin percent as improvement to was a by for realization. costs of currency points

higher However, while strategic including spend engineering new we investment effectively lowering on increased initiatives expenditures in overall, product key development.

expense to compared earnings Operating quarter year. adjusted last XX tax earnings same quarter rate last the was a the slightly of of as X.X% ago. for to and by points of XX% from The year. quarter by was X.X% points XX.X% period percent was tax the quarter year-to-date for to as basis XX.X% operating were XX.X% sales The the quarter basis the sales a third year-to-date. a lower XXXX. for an XX.X% XX.X% reported improved versus XX improvement percent Third third fiscal XX.X% XX.X% of for rate year Interest in compared

adjusted deduction quarter excess for third to item as share-based benefit compensation the rate in the tax the tax The excludes quarter XXXX. adjustments recorded the of of fiscal provisional as first tax well

U.S. by tax and was For reported. comparable XXXX. the the tax the tax down The XX.X% from reform nine adjusted of rate rates reported for the year impacted in XX.X% rate the first XX.X% ago enactment up was as a from previously period were months, XX.X% tax positively adjusted

corporate adjusted associated be remeasurement that reduction federal Deane provisional resulting the benefit Dray to repatriation For fiscal assets continues of XX%. the estimate and XXXX unfavorable the the effective calculation tax deferred from liabilities The the about tax charges of with rate, full were tax the rate by tax year the income of one-time impact and reported offset in the company mostly rate. its will provisional

a sales quarter Accounts as to for $XXX.X due percent inventories the $XXX.X of ago. capital receivable from million levels balance ago. the stands average same the work-in-process working slightly X% total of to a a the X.X% for Turning quarter down the our increased at rolling year as sheet, net to inventory. Net year XX%, of elevated XX-month million

from Third a million quarter trade ago. up X.X% payables were year $XXX

shares quarter, X.X there now third approximately the repurchased turn shares to and authorization. Rick million call of outlook. will our back the discuss under our under our to authorization XXX,XXX During we were I Board remaining stock

Rick Olson

has been XXXX Thank Today's you, Toro. fiscal for Renee. record year another

we a take are the Let's why are review to successfully quarter moment and well confident our that to close positioned the businesses year. fourth out

inventories should help end. in forecast carry are in just Overall businesses momentum have suggests fall ample blower again recent And enables contractors multi-force achieved easily should precipitation the versatile in field will through time to markets and landscape levels our the that First, maintain machines more stand-on to of our attachment. those we years good sales. enhanced contractor productivity. more for shape and our once increase release dollar, cleanup equipment Such investment stretch with their versatility has been business, contractors perform new turbine receive tasks

are Next clubs remains bid Park quarter. continue utility for activity remainder the solid smart optimistic our and vehicle grounds and turf outcross our shipping about our golf the municipal revolutionary begins mini-country latest and businesses running to revenue. Excitement this is that high year. consistent products including generate of

our vehicle our experiencing GeoLink the market demand GTX with strong line. also and healthy are for workmen We on sprayers capitalizing anticipate

well reform projecting several find larger as outcross as cash specialty to up the and other the sales Ongoing advances optimistic, include runs our less. must help a the capacity of their garage productivity contractors for favorable invest with fleets. for enthusiasm spreaders. efficiently and also prospects them Workman do the to orders, increased are tractors a Mini presents well. quarter the increased pull customers the the industry businesses. increase Overall, for construction on products shortages and doing conditions accounts enables number available residential XXXX in of begin Rental tax and from for doors fly. productivity is preseason are rental specialty customer equipment Other is latest to developing coupled our revenue newgrounds and that positive this snow our strong GTX focus Our and next for perfectly opportunity and so. to that increase reporting favorites the strong BOSS operators rotary rental can more appetites master to products is for additional construction for productivity. economic forecasts for structures. The crews high shipping rental to rental do remains an with The labor equip Drag struggle other projects. Ultimately fits VBX for bode increases will rental the American labor, over customers pull as Outcross, Association of companies additional behind of construction related in outlook improvement the back plow ready mean large the years. This and which Plow Based to with outlook rear-mounted are BOSS customer including line extendable Pro away BOSS and snow buildings on the

like to the Solid our healthy Heightened businesses and well over thrower snow stage should are bookings field excitement help two suggests retail new season Max heavy-duty positioned Power meet residential accelerate once the inventory demand. BOSS channel hits.

our also turf for through fall. products We continued the demand anticipate

stage riders market Finally, snow all recent generating Toro introductions. interest. acceptance zero-turn the and Titan HXXX strong two and mower, our our equipped are Hayter collect experiencing are of new product businesses broad and The newest international of also ProLine our line MyRide direct mowers rotary HD throwers

Groundsmaster positive company on to year. focusing the new All close the Our the $X.XX XXXX outcross about the of to about continues revenue out well share The $X.XX fiscal international and growth are per launch way. earnings to we be for said, positioned XXXX. for expect heavily X%. is now to in We year team of a expect also

enacted. recently or call policy impacting At our of and had on policies time tariffs changed announced net related changes, inflationary been the last and pressures impact Our now us not reflects our cost. the trade guidance near-term enacted materially of trade input

our these in that guidance were not So at factors included time.

another has underway, begun. our drive With to quarter year the record deliver final fourth

market strategic condition. on focused to flexibly our remain prepared respond priorities, to we While

remarks to will distributors will this prepare our our world wrap employees, XXXX. possible. the I and time. at concludes strong This partners performance we hard the strong set formal the questions for their up channel year commitment year, a stage we and the our you. make think work around we help As finish and successful Thank Together, for take and that

Operator

[Operator comes of Mondillo Joe Sidoti Our first question & Instructions] from Company.

open. is line Your

Joe Mondillo

everyone. Good Hi morning.

Renee Peterson

Good morning.

Rick Olson

Good morning.

Joe Mondillo

you the off to segment weaker the at wanted than just I a that professional So anticipated. -- I margin realized with start little

puts could if cost, margin? contributed and of factors have through the walk the timing shipments So, mix, regarding any that any other to takes unfavorable us and you sort was of the price there may the BOSS

Renee Peterson

Sure.

at one seeing biggest steel from when we in increasing. for a freight see the say In margins rates from look freight we pro would the inflationary went particular, we we're as commodity the saw. others probably So from we for And particular standpoint, was pressures, impact like through well as did year, greater greater I year. impact which anticipated the QX, that a with had we

that but So trying pretty some to We're as Then, a to doing related as we’re successful we still try as have seen certainly that ship to in been much to do from impact supplier seeing taking minimize some of to possible. have as and action freight we can efficiently challenges. standpoint that, pressure that.

a suppliers just some up I good our demand. having economy with the of think keeping sign of it's that difficulty are

seen a of always we -- probably Overall focus standpoint, implemented QX we'll to see across turf overall have particularly price an a we've just manufacturing increases. can we we we not more more of in cost strong normally like offset disruptions book as margin And year. and snow but last we just pre-season to a productivity, from ship products. our our so but continuing doing have to, what would that continue than orders, little maybe did businesses. an able on increases to from we’ve with interest We the produce standpoint of all efficiently spring, in seen some late the do products And related of the with as

all can of As expect, realized. immediately you that not is

next see to remainder will we year and the realization through the into go we full as of year, that. so, And related

Joe Mondillo

Okay, helpful. great. That's

So your quarter couple next level they prices actually from quarter degree question. here, the and ask the just of me P&L price us, about where quarterly to does the over of next smaller hit of you could next material how the quarter quarters? sort just brings cost thinking a that you What are worst becomes off if of sort on walk fourth to it in the are how quarter through basis? third of that see and wanted out how walk sort the first trajectory my headwind? us I sort of then plays that we but including the over Is it

Renee Peterson

Yes. there’s impact We we just would QX, say it's would commodity increases too. that and – see more that increases an would expect to in that small probably impact dynamics of that couple a a we of other of price quarter

a why costs So little over that bit because tends to difficult quarter. don't of a leveraging you smaller get that's it fixed be more

We So our gross into would on I fixed and the at back going important F'XX And by margins is Toro always to our is and think expect and costs productivity with year. would that business, leveraging margins. to step then see that more improve forward goal it we always look normalized. focus maintain then our

Joe Mondillo

Okay.

So probably by mid-year, it do of thing you becomes sort of a neutral a type think?

Renee Peterson

expect one it But but think we on we as we improve are detailed for a planning, timing December. certainly we through appreciation will our when go I the of in it’s next the have that year. to that predict that today, we will the as really We so a looking meet dynamic sit environment, process would difficult better going here in it's one year of through

Joe Mondillo

it's Yes. very sure I'm Okay. complex.

Renee Peterson

the is It changing, reality.

Joe Mondillo

back lot. queue. All Thanks a I'll right. step Definitely. in

Renee Peterson

Thank you.

Operator

of comes Raymond question Sam James. next Darkatsh Our from

Your line is open.

Sam Darkatsh

Good how are Renee, you? Rick. Heather morning,

Rick Olson

Sam. morning, Good

Sam Darkatsh

might. Few questions if I

were give trying of percentage instituted First placement you it, a as the of year, increases a set or range price sense does about step What it get with us any elasticity include increases you are you last price respect of the the themselves, result? the could a terms? to that of concerned and to price residential in this and amount increases up

Rick Olson

that, take Sam. will I

costs And couple we what down that a then it's each the what forth. -- been of happening and you X.X% prices what's But, so tough you on last to be increases. range that's X% into subject valuation and increases realization the where because are top of of markets to typical. what businesses about mid-year the to true to what course years as those going and our mentioned different the of is if and -- we in has price of we channels X% 'XX the of X% marketplace. exactly of typically in pin commodity So, number of normal would would we're exactly is based say to the for to going because input is on go annual nature And see and

Sam Darkatsh

not or residential is does include and then much there's mostly that Rick coming So pro that residential in in?

Rick Olson

inclusive well. That of be would residential as

Sam Darkatsh

my then. next question So that leads me to

that You percentage think inventory in that's that level at expected vitality channel would going product in next be prepared that good. also shape mentioned I the pricing? to status so The be good to found you a support the remarks the higher new year is

Rick Olson

a few early their I be of shipping new We've Yes. got number quarter, and listed will really in then, beginning we've quite them, hitting and that think products fourth but start have 'XX. we in pace a of the introduced --

XX% for very the threshold So should a available problem index be not that will Obviously investor deck year. us. but next our in be vitality healthy

Sam Darkatsh

treadmill And freight you to naturally it's normally float is would commodity some and that but much then two potentially. much versus costs of be could. more it of quick The is obviously of how in the locked facing if that how going I

Rick Olson

Yes.

expenses. commodity typically we for have those and the of Regarding freight costs, contracts types

So cases, is say I experts at this of we're deal top the the at the at range in this point, if point. some would

in we're point. contract at period this So shorter

freight in probably up changes fundamentally. freight outlook, would are costs the Regarding going freight there are I some fundamental

forth. the on from we back can of do We're probably that offset freight filling the freight on in the we trucks so a to going a to the costs. shipping and density freight planes a there. well at so everything that the change do us costs. can things of going are as flip approach those up we So lot efficient ship to more lot minimize there are and offset even so based But that's programs to and we and those looking as longer them term are substantial side way apparent packaging the costs up There's forward capacity can truckload. things and going out that change the that there's But

Sam Darkatsh

margins. Final question, Rick. at fiscal this that incremental aforementioned XXs looking anticipate I the there Do in still of stage cost, around with look into which kind kind you have are implication Vision that 'XX, parts as here this the appreciate inherent moving year XXXX at incremental is has all would August that an some fiscal you still mid within complexities but of XXs initiative. of mid margin

Rick Olson

No.

As we -- improve work our Vision XXXX. remain hard Renee and are and profit committed we gross mentioned, the to our to

So are that's we're working improvements what the implied there certainly to achieve.

Sam Darkatsh

you, Great, helpful. Thank folks.

Rick Olson

you. Thank

Operator

Our next question Cleveland Research. of comes from Eric Bosshard

open. is line Your

Eric Bosshard

Good morning.

Renee Peterson

Good morning.

Rick Olson

morning. Good

Eric Bosshard

Two things.

in leverage on SG&A SG&A, quarter. the of better was all, the First

level leverage SG&A How this growth. managing and are of level you this improvement is sales sustainable? Okay of or

Renee Peterson

we trying SG&A. always decisions about So to make prudent

example really that. have I another and disappointing of think be We quarter just would this processes

gross wise set initiatives, invest on and product We strategic and decisions. making our to in keep on you new more But do, improving but we'll forward, And of if this do a to otherwise focus in continue continue we'll are sometimes right our as investments to both step quarter always things margins that those as that continue I year there we'll development over change. is the we productivity focus that that, looking mean know our well SG&A. so last as have are can And focus. more

Eric Bosshard

around this but this better it reason as of out the terms growth, the bit can X% the year understand thinking year, you was the thinking next and that look to there a for over than growth all in where years, numbers coming you start are of growth different share was opportunity, the in expecting a Okay. years? And to And of that the route in to to just last next sales terms your get are underlying the I how then, market numbers you opportunity area? I believe -- secondly, those weather market back about in little sales be year growth curious that? X.X%, Is of at couple are your of why a the couple original in of is right think year

Rick Olson

Yes.

and off for back in areas talked construction, reason going numbers forward as We we to of improve have the lots areas excellent think have to a focus going those additional through would had types business to to no of with small grow growth this forward. for mid-single this us share there and that's at acquisitions to itself some golf type remain. in we've about like landscape seen be that. growth opportunity area strong a pipeline growth got continue see markets at opportunity to opportunities. And point with even to talk organically, then, of our to areas really continue we've digit point we renovations opportunities We us. we course for like that grow golf We We've we've continues working a single-digit to see M&A perspective the where continue low We're and market specialty equipment still and continue contractor some that grow those to of about replacement. as growth good being our

Eric Bosshard

Thank It's you. helpful.

Operator

Shlisky of from Global. Mike Our next Seaport comes question

open. Your line is

Mike Shlisky

Good morning, guys.

Rick Olson

Good morning, Mike. How are you?

Mike Shlisky

thanks. Good,

did did wasn't domestically. golf hear I of as comments as that yesterday it very quite strong well Rick but internationally So

seeing you of kind in us U.S. -- your are core with of share the me current Let golf business? kind

Rick Olson

the hit core on that emphasis was early spring. remains in that an Really on the based There products shipped residential business April The rounds strong effect early that early U.S. the some affects business in also the anticipation spring. of summer. the the

So customers adjust played golf good if economic confidence the their equipment. rounds shape. fundamentally, in with investing are of our for are our weather a and courses customers in bit -- little you buying And

So we the growth feel for very strongly and we expect year. good

Mike Shlisky

Okay.

little have bit up off very et following orders anything maybe I started size have term more new and you you cetera? Outcross your you here. you a color, product, near shipping -- in share on that after think the with can change Can Just us on gets the the should us features within as once [registrations] [ph], range to far you been as wise give

Rick Olson

we that of are number out. small far have So a products

of gone thing at it's them category. interesting this is, and In fact, been new point have The it's purposes right for target. demo on a many

of So that it's some you to some the well or make once talked as very facility, from your venues on primarily from great had field we've case much has a something try chance a Europe. customers it have and where it's we've including for about already your to golf in response that easy been sports course target

Mike Shlisky

Also in it. particular about business ask the plow mentioned. snow Got that and to you had your want box

some to in you see a had growth to XX pretty the of months? it going a of in some trade the the a the and plan it the folks of kind be with product. I that group and or but of nationally is in next if of out regional pretty called dealers plows other the regional chatting the still to seems industry, XX shows reach BOSS product think I overall expand where curious -- there, was kind that BOSS to

Rick Olson

there no is focus. strength, have regional regional but to intention a only have We

and scope and country we well. our world strong the of non-traditionally parts strength as to grow So continue in the of parts

we see no to to keep intention and regions. the that across growth continue So regional

Mike Shlisky

Okay. I'll pass it along.

Operator

Research. David from of comes question Macgregor next Longbow Our

open. is line Your

David Macgregor

morning Yes. everyone. Good

Just on quarter, XQ contributed should sounds golf is was pull guess, -- take some and to I is from that away what have there XQ some into we forward weakness may this the of the follow-up that here? maybe like it that questions

Rick Olson

so couple spring, say a critical between third of quarter of and quarters, we in talk transition quarter time transition point. in lands critical about and in the would quarter kind the the a over second third I another looking is times just often the the fourth

So across several look we quarters. just need to

season. was retail very, it's the summer If economic going there with little great a spring, the for brakes of products you tapped got so bit orders recall forward. solid first a great very summer. positive the We've kind status; and new season, being into part standpoint April the going and anticipation the But and positive it very into a of it's an been been open from going forth very everything has a

very So remain confident. we

David Macgregor

ahead that Outcross operators, shipment? superintendents quarter, were think you of holding that course off think ship intending the this the just you of to Do the do Outcross these with some

Rick Olson

No. I think so. don't

be for I shipments the changing continue to not necessarily across the another think opportunity is quarter. fourth board into them. plans. It's going the people's And and very budgeting Outcross strong the

David Macgregor

Okay.

growth? a talked increase Next of the in did I contractor the just the about the wondering in increase area quarter believe business had business, ahead business. early I'm I on extent sales just August. to pre-buy landscape third what strength you pro that to guess price that question contribute of is

Rick Olson

not say factor that's Yes. factor. not significant a I this a would at not point,

David Macgregor

saw that within the I'm just how cadence about pro, June and did the talk into given push you Can weather quarter a sure within flow May you good July? but pattern

Rick Olson

normal just frenzy positive kind last very call, that excitement. talk but very was diesel, in as real earnings at been that period least above And It But the we Titan also what's has overall May that average entire America actually May. with into at across North had above were drive and a well about we new new summer the temperatures options all. fantastic of normal the entered like continues it -- in received. are and was the a the Radius products that was a -- to lot is larger. remarkable particularly HD were The deck The new precipitation on diesel of

about And the with, just et is the productive that so time turnaround also XX-inch by example, more cetera. reduces math but take if you a deck XX% for just

that product of benefits. that used up, then, put narrower tip deck So that the the landscape pull their on where the And productivity last can the is of product. end seeing so feature they people a trailer a it conventional are to contractor

combination that it's market a just So the responding really to. is great

David Macgregor

rapidly thoughts the whole a here residential you battery but kind question there associated the a guess consumer in losing the fast to from just my kind question -- advantage Last mowers be I best about Good. your class with just of you battery helpful? the wondering area this and powered brand if the and would new just for I this of I'm guess follower you're Is around that in developing do is of of me, and ask to here? when more category? visible time be pioneering being whole plan time, Toro I powered

Rick Olson

understand a a that introduced is that of growing us We this at part meets point. very product it is Sure. our small the market still expectations. what's for And we important

different of will we has pleased in the solve batteries. we've yards that continue and to believe some stronger that there our than that been a be areas. our for lots with and for battery technology inherent in side, we products obviously with problem activities are that of with forth. with But, threshold smaller be that's it well-received extremely adoption the U.S. fundamentally customers And all the a hybrids know Europe have in powered of we so been really lot products introduced reasons will going First have on factor, and energy pro

going have alternative So we activity those we continue in to sources a feel factor forward areas. energy a on lot are and that going major of

David Macgregor

better The two what offerings are are and retail. it become category is a developing small. starting category good segment. point the is At to People the priority at best for still higher -- does already you groups maybe

Just you what level more become to development act? see in do category of need to that

Rick Olson

are right in categories We investing now. those

which products side though introduced the area commercial a extraordinarily products again it's So they with in I to the the done the us that have right that is is when marketplace. and took definitely interesting the think we that is approach we key well

sure the we've before approach, that got with. be we're our will pleased right introduce making that to product something we So is not continue

David Macgregor

Sure.

Okay. Thanks very much.

Rick Olson

you. Thank

Operator

of Sidoti have Mondillo we Joe question & follow-up Company. And a from

open. Your line is

Heather Hille

Joe. Hello

Joe Mondillo

now? Yes, sorry. hear Do you me

Renee Peterson

we can Yes, now.

Joe Mondillo

a to we the was you're that of I projects ask given underway. the forward, that some I projects sort you're couple those from Wanted of we do talked still mute. and of a Have improvement larger you've pickup larger benefits think doing -- to maybe doing. questions. what such. last anticipate I wanted or going of you should off know I about that when on started see of quarters of couple have is to sort sort productivity that benefits we about over of benefits, have productivity improvement first some see you

Rick Olson

about benefits we cetera. talk much really with from that. were reason. helped it's We freight, And areas that our Yes. for thankfully higher input and of initiated offset costs because commodities, in I'm the and happy some those already increased we've investment to impact et so good us seeing seen time and ago

challenges either helpful lean So with components with to improve the work already using suppliers as have would on consistent helped that But a we we flow a of extremely and some been off had of tool had especially fact done our to the plants. margins. and our we've to had price plants taken increases or have us what pass lot otherwise it as the

we've work do more done the so helpful. that can we There's So been that very much given. is

Joe Mondillo

see it's fiscal continue be of or So see given some benefits you've increasing in given already you a a that you that projects magnitude to follow-up got that benefits of on, just Do where started sort going foresee. the you 'XX the going these things on backlog here? to of to you've study of see

Rick Olson

can steadily over productivity be improve prediction steady steadily -- time. we we that My or results would we the but be can productivity could opportunities

tremendous the and work the done had that clean we've we of As supply supply consistent components. We've improving when in mentioned I have disruptions benefit our just seen with

Joe Mondillo

Great. I'm sorry.

Rick Olson

other our mention for to cases -- true that be our in hold excited the going technology we're just was product as would about the well. finance and many side I technology

So return projects our there are as well. in for have productivity invest great us to improve a and great opportunities that

Joe Mondillo

talk seeing at wanted you landscape in competitive change the part Okay you good. could there all? to on your you about Also any ask landscaping business the of competition. Are

Rick Olson

Yes. the the landscape always area And field. for been -- landscape large it's contractor a in

So then there a few any but a fundamentally gone really that competitors ones with more of have will and competitors that come are that of There's competitors. there group secondary few few lots There if lot changed. have and that hasn't been major are of we in. have you

Joe Mondillo

early, your with seeing. drought the footprint are know kind above year. I point the of regarding At but levels year season spring that affecting of sort and it's this this Okay. probably And next what then, you average lastly, European ending risk in time inventories see do and we

Rick Olson

in in company. inventories We're the Yes. actually great really shape across

from So out just I recently not speaking Scandinavia partners would Europe did an winter. our channel point they and with a have concern. that's Northern some of excellent

the of didn't kind parts summer. a We that Europe middle a helped during roughly so the snowfall. effect of drought winter years of three some offset of lower after was good of have in us the that So

Joe Mondillo

it more so internal so inventories inventories, above so average see spring, up tougher is inventories? ends channel into thoughts actually not probably was with the translate would I think inventory if a that I but that you about your as your just channel risk, wondering market would talking if the the do maybe would and a about

Rick Olson

of our field include momentum shape, that's Europe. retail good inventory, on so channel have many and still our which I referring we good would was categories in actually to even in

Joe Mondillo

lot. Okay. a Good appreciate right. I All it. Thanks hear. to

Rick Olson

you. Thank right. All

Operator

from of And line Research. David the Longbow have from we Macgregor question a

Your line is open.

David Macgregor

are the Rick, business. watch concerns right the canaries guess in coal be early of Yes. of the Thanks cyclical in draw years about from I'm inventories know cycle. your presume indicators would lot kind but you experience a see in first I is cycle. business And are experience I past but it in the the that to slowdown, I might -- taking I cycles, follow-up. about experience would from -- of that, we wrong a where with wanted you this now it mine for just what the your your I maybe business, be I'm don't know residential do retail what in

Rick Olson

We look would macro at probably things. more economic

our broad kinds indicators be versus business. tying So things confidence of to economic will more of that consumer particular part any those

remember businesses those during historically, we the more business actually And constant very well. would say you last professional recession, the through would periods. the If that be consumer held up

strong would very optimistic just the look our are future. about look we overall now, that. for our we're continue like So really looking indicators at to something very the Right macro and customers if businesses

David Macgregor

over two or you indicators, kind one if about overweight specific be you Can index? or

Rick Olson

indicators as mentioned I kinds of confidence, those confidence, business be things. well housing group would construction, The starts of consumer

David Macgregor

nothing intrinsic the on that's kind the nothing kind then up of of bottom And basis on a Okay. within dashboard? business

Renee Peterson

seeing What business very hearing at is Oh, there as substantial are we we're they're distribution. from that seeing, connected far things demand always field. and changes. any What the forward as look we're such our as the through what if

David, absolutely type would be at well. as So, of those looking we things

David Macgregor

Okay.

-- normally normally talked price seeking of terms kind and of right. know year. October pricing second, your see you In you I all at you year that initiatives this But, end of about the the

quarter. given just it year, this this regulator the the fourth of it end in guys likely, increase at You calendar will pursue the coming summer, increase

Rick Olson

go really The mid-year that will be price the are been going incremental, pricing has price we talked as points our year. we we into increases through next increases so normal

David Macgregor

Great.

Okay. Thanks very good much luck. and

Renee Peterson

you. Thank

Rick Olson

Thank you.

Operator

Hille, please to This remarks. concludes proceed Ms. session. question-and-answer the closing

Heather Hille

to our for results Thank your for you outlook provide and questions in again Company. December the you talking you. interest the with year look for to discuss Thank fiscal and XXXX. to our Toro We forward in fiscal

Operator

Thank disconnect. This you your Everyone have may concludes day. the great a today's for presentation you now conference. participation in

The Toro Company (TTC) 23 Aug 182018 Q3 Earnings call transcript