The Toro Company (NYSE:TTC) Q1 2026 Earnings Call Transcript

The Toro Company (NYSE:TTC) Q1 2026 Earnings Call Transcript March 5, 2026

The Toro Company beats earnings expectations. Reported EPS is $0.691, expectations were $0.65.

Operator: Good day, ladies and gentlemen, and welcome to The Toro Company’s first quarter earnings conference call. My name is Daniel, and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today’s call, Heather Lilly, Vice President, Corporate Affairs and Investor Relations. Please proceed, Ms. Lilly.

Heather Lilly: Good morning, everyone, and thank you for joining us for The Toro Company’s first quarter 2026 earnings conference call. I am Heather Lilly, Head of Investor Relations. On the line with me today are Rick Olson, Chairman and Chief Executive Officer; Edric Funk, President and Chief Operating Officer; and Angie Drake, Vice President and Chief Financial Officer. Rick, Edric, and Angie will provide an overview of our first quarter results, which were released earlier this morning, and discuss our priorities and outlook for the remainder of fiscal 2026. Following their remarks, we will open the phone lines for a question-and-answer session. As a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, including those described in today’s earnings release, investor presentation, and most recent SEC filings, and may cause actual results to differ materially from those contemplated by these statements.

Also, in our remarks, we will refer to certain non-GAAP financial measures, which we believe are important in evaluating the company’s performance. Reconciliations of all non-GAAP numbers to the most directly comparable GAAP number are included in this morning’s press release, along with the first quarter presentation containing supplemental information that is posted in the Investor Information section of our corporate site. With that, I will now turn the call over to Rick.

Rick Olson: Thanks, Heather, and good morning, everyone. Throughout 2026, our teams remained diligently focused on executing our strategic priorities. We capitalized on market opportunities and customer demand, drove operational excellence, and leveraged our portfolio of leading brands for profitable growth and competitive advantage. At the same time, we invested in value-creating technology and innovation. As a result, we beat expectations in both segments and increased consolidated net sales by more than 4% to $1.04 billion. Our outperformance was driven by strong execution in both our Professional and Residential segments, which allowed us to capitalize on incremental demand for snow and ice products and continued growth in underground and specialty construction.

We reported better-than-expected adjusted earnings per share of $0.74, up from $0.65 a year ago, due to higher earnings in our Professional segment, which represents about 80% of our portfolio. We expanded our hydrovac excavation solutions through our acquisition of Tornado Infrastructure Equipment, further strengthening our capabilities. We continue to implement our multiyear AMP program, which is fueling sustainable productivity improvements and has contributed $95 million in cost savings toward our aggregate goal of $125 million. We generated free cash flow of $14.6 million, resulting in an impressive free cash flow conversion rate of 22% in a quarter where our seasonal preparations typically result in a net use of cash, and we repurchased approximately $95 million of common stock, reflecting our commitment to return value to shareholders.

In summary, through strong execution of our strategic priorities throughout the first quarter, we drove favorable sales and earnings growth and further strengthened our financial position. During the first quarter, our teams were prepared to deliver snow and ice products and capitalize on incremental demand as a series of winter storms hit major population areas. This operational agility and strong execution not only contributed to excellent Q1 top-line growth but also positions us well for robust performance in these categories in the back half of this year. Adding to this optimism is our fresh line of BOSS plows with new Cold Front Technology, or CFT, which has been well received by customers. The innovative CFT system integrates plow and spreader functionality and is engineered for effortless connections, smart performance, and maximum efficiency.

We also continue to invest in underground and specialty construction, reflecting our expectations of multiyear growth in these businesses. Our efforts underscore our focus on broadening our offering to drive both near- and long-term results. During the first quarter, horizontal directional drills like the innovative JT21, which launched last year, contributed to our sales upside. We expect customer demand to remain strong. We were very excited to welcome Tornado to The Toro Company during the quarter. As a natural adjacency to our existing businesses, its complementary offering enables us to expand our growth opportunities in this market. And this spring, we look forward to showcasing the recently launched Ditch Witch SK 1,000, a compact stand-on skid steer with increased lifting capacity and reduced maintenance, making it ideal for utility work as well as landscaping.

To preserve our profit margins and remain price competitive, we continue to pursue deliberate strategies through our AMP program to drive sustainable productivity improvements, cost savings, and net price realization. Through the AMP improvements, we are working to moderate the effect of higher material and manufacturing costs and fully offset the effect of tariffs. We are also carefully managing inventory at all stages of production, as evidenced by our healthy net inventory position at the end of the first quarter. This was a key driver of working capital improvement. While external factors like the economy, geopolitical environment, and weather are ongoing considerations, we are committed to maintaining our discipline and aligning our inventories with expected demand as the year unfolds.

These actions are strengthening our operations and driving improved financial results, and our teams and channel partners are highly motivated to build on this momentum. I want to thank them for their ongoing commitment to advancing our product and technology innovations, as well as our cost savings and productivity initiatives. Now Angie will share additional insights on our first quarter results and provide our outlook for the year.

Angie Drake: Thank you, Rick, and good morning, everyone. Before getting into the details of our results, I will highlight three key takeaways from our first quarter performance. First, we delivered better-than-expected top-line growth in both our Professional and Residential segments through disciplined execution that enabled us to capitalize on seasonal demand opportunities. Second, we delivered adjusted EPS above expectations and prior year through deliberate productivity improvement initiatives that drove favorable operating leverage. And third, our positive free cash flow and strong balance sheet position underscore our commitment to financial discipline and returning cash to shareholders. In short, our consolidated first quarter results demonstrate the strength of our portfolio and market-leading innovation, our commitment to operational excellence, and our thoughtful strategic and financial stewardship.

Now let’s dig into some of the details. Consolidated net sales for the first quarter were $1.04 billion, up 4.2% from prior year and better than expected, as sales in both the Professional and Residential segments exceeded our guidance. Professional segment net sales in the first quarter were $824 million, while Residential segment net sales were $216 million. Both segments benefited from higher shipments of snow and ice products and net price realization. Strength in underground construction, including the successful integration of Tornado, and growth in our landscape business also contributed to top-line growth in the Professional segment. We delivered a 9.8% consolidated adjusted operating earnings margin in the first quarter, up from 9.4% a year ago.

Both Professional segment earnings of $137.6 million and Residential segment earnings of $13.2 million exceeded our expectations. Year-over-year results in both segments reflect net price realization and the favorable impact of our ongoing productivity improvement and cost savings measures. This was partially offset by higher material and manufacturing costs. Finally, our first quarter adjusted EPS was $0.74, which exceeded both our prior year adjusted EPS of $0.65 and our previous outlook for this period. Now turning to our balance sheet and cash flow results. Our balance sheet continues to afford us meaningful strategic optionality, enabling us to focus our capital investments on initiatives that generate profitable growth. Our current leverage ratio of 1.5 times remains healthy and well within our stated target range.

Our free cash flow for the quarter was $14.6 million, a year-over-year increase of more than $80 million, resulting in a free cash flow conversion rate of 22%. We achieved this performance through meaningful inventory improvement driven by our integrated business planning process and seasonal demand for snow products. As a result, our inventory turnover improved to 2.8 times in the quarter. Additionally, we returned $133 million to shareholders in the quarter through dividends and share repurchases, demonstrating continued confidence in our ability to generate cash. Looking ahead, we remain focused on capitalizing on top-line growth opportunities, thoughtfully managing our balance sheet and cash flow, and integrating AMP operating efficiency benefits that support our $125 million run-rate target by 2026.

We are raising our sales and earnings outlook for fiscal 2026 based on our strong execution and the strength of our first quarter performance. We are increasing our expectation for total company net sales growth to 3% to 6.5%. This reflects, first, Professional segment net sales that are expected to grow mid-single digits and, second, Residential segment net sales that are expected to be flat to down 3%. This is an increase from our prior Residential segment net sales guidance, reflecting strong Q1 results and an improved outlook for the balance of the year. We are also raising our full-year 2026 adjusted earnings per share guidance to be in the range of $4.40 to $4.60. This outlook assumes a higher total year adjusted gross margin rate, consistent with our prior guidance and underscoring our ability to navigate cost pressure while investing in innovation; higher adjusted operating earnings margin, which reflects annual Professional segment earnings margin between 18.5% and 19.5% and an improved outlook for the Residential segment earnings margin between 6.5% and 8.5%; interest expense of approximately $60 million; an adjusted effective tax rate of about 21%; and capital expenditures of $90 million to $100 million.

Furthermore, we now expect an improved free cash flow conversion rate of at least 120%. For the second quarter of 2026, we expect total company net sales to increase mid-single digits from the same period in 2025, with mid-single-digit net sales growth expected in both segments. Professional segment earnings margin in the second quarter is expected to be similar to a year ago, while Residential segment earnings margin is expected to approach double digits. For the total company, we are expecting mid-single-digit adjusted earnings per share growth in Q2. As a reminder, our second quarter is typically the largest of the year. As evidenced by our strong first quarter performance, we are managing our business to take advantage of our strengths as well as market opportunities, while mitigating external pressures.

With our team’s continued commitment to providing innovative solutions that create value for our customers and drive operational excellence across our business portfolio, I am confident in our ability to deliver sustainable, profitable growth for the long term. With that, I will turn the call over to Edric.

Edric Funk: Thank you, Angie, and good morning, everyone. Our results in the first quarter demonstrate our competitive positioning and business resilience, our market-leading innovation, and our team’s skillful execution of key initiatives. Together, these factors provide a solid foundation for future success. With our strong balance sheet and free cash flow, we continue to invest in technological innovations and growth markets that provide significant value for customers and The Toro Company. Let me share a few examples. We are actively pursuing opportunities to capitalize on the growing global demand for underground construction equipment, which is being fueled by aging infrastructure, new data centers, and a rise in energy and telecommunications projects.

CONEXPO, which is North America’s largest construction trade show, is taking place this week. At the show, we are exhibiting our broadest offering ever of underground and specialty construction solutions. With our recent acquisition of Tornado, which is a natural complement to our existing products, we are poised to extend our reach and impact within this category and beyond. In Golf, Grounds, and Irrigation, we are building a pipeline of innovations that help customers maximize workforce productivity and reduce costs. Last November, we introduced our AI-enabled Spatial Adjust software, which is proven to be, in the words of our customers, an absolute game changer. This water management system is simultaneously helping to preserve one of our most precious resources, delivering more consistent playing conditions, and bolstering subscription service offerings that provide incremental recurring revenue for The Toro Company.

This spring, we are further expanding our water management suite with the launch of our new RXC irrigation controller. This reliable and contractor-friendly irrigation solution provides modular expandability, advanced flow monitoring, and smart features such as predictive weather-based scheduling, seasonal adjustments, and intuitive programming. Innovations like this enable our customers to better manage costs, conserve water, and maintain the condition of the ground in their care. And finally, by coupling targeted acquisitions and strategic partnerships with years of our own internal development, we are incredibly excited that we now offer the market’s broadest range of autonomous turf maintenance solutions. We have accomplished this by leveraging multiple localization and navigation technologies across an array of high-energy and low-energy product platforms.

While most of these innovations are still early in their growth life cycle, we are very optimistic about their future potential. At the same time, we are also excited about the near-term opportunities within our core businesses. For example, following the strong performance of our snow categories during Q1, given the current health of the channel, we are confident about the prospects for those product lines in the second half of this year. Finally, the team’s commitment to operational excellence and optimization of our global supply chain will continue to help us mitigate increases in materials and manufacturing costs, streamline our supply chain operations, and manage our inventory with exceptional success. Through the steadfast engagement of our team, we are building strong momentum for future growth.

I will now turn the call over to Rick for closing remarks.

Rick Olson: Thank you, Edric. In closing, I want to underscore our confidence in The Toro Company’s strategy and continued profitable growth. Our actions are enhancing our customers’ performance, strengthening our competitive advantage, and increasing our operational efficiency. Through our disciplined approach to capital allocation and balance sheet flexibility, as well as our commitment to strong free cash flow, we are well positioned to deliver significant value to all our stakeholders for many years to come. We will now open for questions.

Q&A Session

Operator: We will now open for questions. Our first question comes from Samuel Darkatsh with Raymond James. Your line is open.

Samuel Darkatsh: Good morning, Rick, Angie, Edric. How are you?

Rick Olson: Good morning, Sam. How are you?

Samuel Darkatsh: I am well, thank you. A few quick questions if I could. First off, Pro sales were up 7% in the quarter. Can you give us a sense of what that was organically, excluding the Tornado effects?

Angie Drake: We also saw improved underground and Pro contractor shipments. And then, of course, you said Tornado. Excluding Tornado, it would be snow and then underground construction and Pro contractor.

Samuel Darkatsh: So figure maybe 5% or so is organic and a point or two would be Tornado. Would that be fair?

Angie Drake: That is probably close. What I failed to mention, though, is that we did see some of that offset by some softness that we saw in international. But overall, I think 1% to 2% is probably fair. What we had mentioned in Q4 is that Tornado would contribute about 2% growth for sales, so for inorganic growth will be about 2%, and their sales were we were expecting to be about $100 million for the year. So pretty well in line with what our expectations were for Q1.

Samuel Darkatsh: Gotcha. And then on an all-in basis, what was snow and ice? I understand it is a relatively attractive margin category in both segments for you. Can you help us contextualize how much snow and ice was up in the quarter?

Rick Olson: We did, as Angie said, have strength across our businesses. If you look at the two reporting segments, it was the largest portion of each of those segments. On the Residential portion, it would be the largest, but also offset by some shipments of spring products that will be a little bit later, rolling into the second quarter. So there was some offset there, but it was the largest portion of the increase there. Interestingly, on the Residential side, as we talked about, there was field inventory in place, so retail was even stronger than the shipments that we saw. Shipments, if you look at a ten-year average, were about on average on the Residential side. On the Professional side, a little different story. The shipments were well above the ten-year average, and in both cases, it just puts us in a very positive field inventory position as we go into the second half of the year.

That gives us confidence in the preseason fills both for the Professional and the Residential side as we go into the third and the fourth quarter. So the largest portion of each of the segments was snow, but really strength across the businesses, and in the case of Residential, kind of back to a more normal snow shipment year for us.

Samuel Darkatsh: Gotcha. Then my last question has to do with the annual guide. The 6.5% high end of your range, I am trying to first off, I am trying to get there with the Professional and Residential guide. Professional up mid-single, high end of the Residential is flat. Obviously, that does not get you to 6.5%. So in order to get to 6.5%, would Pro be closer to high single-digit growth, or would Resi turn positive? I am just trying to get a sense of how to think about the high end of the range, Angie.

Angie Drake: Sam, I think what we can talk to are the pieces of that. As we think about the full year, expect to get a little bit more than our average 1% to 2% on net realized price, and then the balance of that will be driven by organic growth, and that will be largely in the Professional segment and in the categories that we talked about earlier: underground, Professional contractor, Golf and Grounds, and a strong second-half snow sell-in.

Samuel Darkatsh: Okay. I will ask that offline. It is fine. Thank you all. Appreciate it. Very good stuff.

Rick Olson: Thank you.

Operator: Our next question comes from Tim Wojs with Baird. Your line is open.

Tim Wojs: Nice job. Maybe just to kind of piggyback off Sam’s question. I guess, you raised the Residential guide, but you did not raise the Professional guide. Is that just going from one end of the range to the other end of the range, or is there something in Pro that is offsetting some of the upside that you saw in the quarter in Q1?

Angie Drake: I would say that for Pro, we probably saw a little more softness in international than we expected, so we are having to offset some of that. But the rest of it is really largely as we expected in the Professional segment for the year. We raised Resi because we did see some upside in snow that was a little higher than we expected in Q1 based on some of the snow events that we saw across the country.

Tim Wojs: Great. And then I guess one question: when you look at your snow contractor base and your lawn-and-garden contractor base, do you have any sort of sense as to what the overlap between the two is, and if strong snow does help the Professional landscape business and vice versa?

Rick Olson: There is a lot of overlap. I think what you are getting at is if you come into the spring season with contractors that do both snow and summer work, they are going to come in in a healthy position, and we would anticipate that that would be the case for the contractors. One thing to keep in mind is contractors have really been strong throughout the cycle. Where we had some softness was with the homeowners that were buying products. They have been pretty solid throughout. The current strength is also being bolstered by the new products that we are introducing. For example, in the Exmark area, the Lazer that was introduced two years ago and the Radius are both selling very strongly. So that puts those factors together, and it is a very positive position for landscape contractor on the pure Pro side.

Tim Wojs: Gotcha.

Tim Wojs: That is helpful. And then the last one I had, just as we did our Golf checks this quarter, we got back kind of an abnormally high response rate around autonomous adoption. Could you just review for us where you are in autonomous in Golf, and if there are any KPIs around how big autonomous is, how it is growing, the products that golf courses are adopting? I think that would be really helpful. Thanks.

Rick Olson: Great question, Tim. The response you got is not surprising. There is a lot of interest, and that would not surprise any of us knowing that labor represents such a significant portion of golf course budgets, and that for a lot of golf courses, they are finding it difficult to find and attract the labor. That is clearly the driver and has been for some time. We have seen it is kind of difficult to find a golf course that has not at least experimented with some autonomous solutions. I think they are still looking for how that ultimately fits into their business. Some of what we are excited about—we have been investing in this category because of those drivers for a long time. As I mentioned in the prepared remarks, we are pretty excited now that we cover all the bases.

So if somebody is looking for that traditional robot style, whether that is for around the clubhouse or smaller areas of the rough, we have that. If they are looking for still low energy but a more productive piece, we now offer that product as well. If they are looking to, rather than mow, collect balls on the range, we have a version of that platform that does that piece. Then we are also now offering products up in the higher-energy range. If they are thinking about mowing that longer turf that, again, you might find in the rough, but they are looking for an even more productive machine and one with the traditional mowing technology, we have a platform for that, and then all the way now to the fairway mower. We are pretty excited there. As we said, it is still early days on people being all-in across the board, but we only expect additional interest and growth in that area.

Tim Wojs: Awesome. Thank you. Thanks for the detail, and good luck, guys.

Angie Drake: Thank you.

Operator: Our next question comes from David MacGregor with Longbow Research. Your line is open.

Joe Nolan: Hey, good morning. This is Joe Nolan on for David. I was just wondering, with the bottlenecking investments and other investments you have made in the Ditch Witch business, can you talk about how much improvement you are seeing on margins today in that business and how much more improvement we could see in 2026?

Rick Olson: We continue to see, really from the time of the acquisition in 2019, steady growth in our profitability in that business. It is from a number of factors, obviously leveraging across the scale of The Toro Company, but also the continued improvement by that business. We are back soundly in the range of the Professional profitability at this point, and the investments that you mentioned, like the new paint system and others within the facility, are helping us to continue to fuel the growth that we see across a lot of drivers within that business. The business continues to be healthy, we have continued to make solid profit improvements, and we are very optimistic about the outlook for that business going forward with the long runway.

Joe Nolan: Got it. That is encouraging. And then on the international business, you mentioned some weakness there. Could you expand on what markets that is in and how that is factoring into your guidance?

Rick Olson: Broadly across our businesses, that is the one area that is a little bit behind where we would expect them to be at this point in the year, just through the first quarter. I just looked at that detail this morning, and it is kind of broadly across a number of areas, both in Europe and in Asia across multiple categories. It is more just kind of a general economic environment sort of situation. Our team is still optimistic that they will be on track for the year, but we just see some softness there so far this year that we wanted to pass on as commentary.

Joe Nolan: Got it. And then just one last one for me quickly. On M&A, can you talk about what you are seeing in terms of valuations and also update us within the existing where you see the greatest opportunity to build within organic growth?

Rick Olson: Our approach to M&A has remained pretty consistent through the years. The activity has always taken place, building opportunities for M&A. We stay pretty focused in areas where we know we can compete and win, so it is close to our existing businesses. If you pick those out, it is going to be likely on the Professional side, and we see opportunities within, as evidenced by the Tornado acquisition, the underground and specialty construction particularly, but also opportunities for technology investments and adjacencies that might be there as well. The key point is the process continues on an ongoing basis. Valuations have been high, but there are some signs of moderating a little bit—just recent data points. Nothing necessarily statistically valid there, but valuations may be moderating a little bit.

Joe Nolan: Great. Thank you for answering my questions. I will pass it on.

Rick Olson: Thank you.

Operator: Our next question comes from Eric Bosshard with Cleveland Research Co. Your line is open.

Eric Bosshard: Thanks. A couple of things, if I could. First of all, with leverage at 1.5, I am curious how you are thinking about the next 12 to 18 months, as there have been a handful of tuck-in acquisitions and some bigger ones. As we move forward, what is the strategy with the leverage opportunity? Is it buying more stock, or more acquisitions? If you could just start on that, it would be helpful.

Rick Olson: Thanks for the question. Our capital allocation strategy remains the same. We first invest in research and our new products and innovations. We invest in opportunities for productivity improvement and technology within our facilities. We obviously look for opportunities with M&A, and then, of course, we fund our dividends and typically would buy back stock at the end of that list. With regards to M&A, we have the capacity and we have the interest in M&A of all sizes. It is really, for us, the process that we go through and the discipline that we maintain in that process. We are always open to M&A, but it is really the process and the opportunities and the timing for potential sellers that is the gauging factor. Did that answer your question?

Eric Bosshard: Yes, that helps. The second question is from a field inventory perspective on both the Pro and Residential side. Curious what that looks like presently and also the appetite for loading in both the Pro and the Residential side from your partners?

Rick Olson: We are actually in a very healthy position from a field standpoint. Even in a normal situation, there will be differences by businesses, so some a little high, some a little low, and those businesses are working to adjust those with the normal flow. I would say we are pretty normalized at this point, and with regard to your question about channel, it really, as we mentioned earlier, helps us and gives us confidence in the second half of the year with the snow. In particular, the Professional products would be going into the preseason in the third quarter and the Residential products in the fourth quarter. So it does give us confidence in the second half to derisk some of those factors in the second half.

Eric Bosshard: Okay. Thank you.

Rick Olson: Thank you.

Operator: Our next question comes from Mike Shlisky with D.A. Davidson & Co. Your line is open.

Mike Shlisky: Hi, good morning. Thanks for taking my questions. I am not sure if people on your staff track this, but does the heavy snowfall that we saw most of this winter lead to a potential greener spring, assuming temperatures are somewhat normal?

Rick Olson: It does, Mike. Snowfall leads to early spring moisture that gets the growth started early in the spring, so it is typically a positive. We have seen solid snowfall in the U.S. Interestingly, on average, a little bit below, just because of the extremes. The West had little snow, if you think about some of the ski locations. The Midwest was kind of mixed relative to normal, and then you experienced on the East Coast a really exceptional winter. That would also influence the effect that you talked about, so less snow in the West would be less positive going into the spring.

Mike Shlisky: Got it. Thanks for that. Turning to CONEXPO, I really enjoyed—I checked out the booth the other day at CONEXPO, the Ditch Witch booth. I was curious about something I saw there called the Orange Intel system, which looks like an interesting fleet management, telematics-type system. The other brands that you have have similar systems like the Horizon 360, for example. I was curious how you feel about your offerings compared to the competition—both those and other offerings on shared infrastructure that maybe other people cannot really replicate. Are there any other digital offerings on the way, like getting Tornado added to it or other digital offerings that might have good subscription tailwind here?

Rick Olson: Great observation, Mike, and thanks for the question on that as well. We get more excited every day with the progress of those things. In addition to the ones you referenced, Intelli360 would be another one that we are using on the Golf and Grounds side of the business. Some of those grew up in different places. Orange Intel is something that has existed with the Ditch Witch brand and the Charles Machine Works company even prior to the acquisition by The Toro Company. But now all of those teams are working together. We execute something within the company that we call our Technology Forum that brings all of our technology practitioners together to share and continue to co-develop. Going forward, what you hinted at is absolutely likely—that you will see more and more commonality and ability for customers who work across different segments of our product lines to be able to use some common infrastructure.

Lots of good stuff going on now and excitement for the future there.

Mike Shlisky: Great. Maybe one last one for me on the Golf business. I think last quarter, you said that Grounds would be a little bit more of a growth area than Golf, just with Golf having such tough comps. The Grounds has been a little bit of a—it was harder to meet that demand when Golf was so strong. A quarter later, do you still feel that way? Are golf courses—is Grounds still going to be a bigger driver than it was before? I would also be curious about the outlook for international golf courses versus domestic.

Rick Olson: Another good question. I would say we are probably feeling a bit more optimistic on both fronts in Golf and Grounds. Our efforts in Grounds are showing benefits. Remember that was something that we were intending to put more energy toward. On the Golf side, we have done some recent research that is showing actually continued growth in equipment purchase expectations and the budgets to support that. We were prepared for some softening off the incredible growth trajectory that we have been on, seeing that normalize more, and it has. But the incoming orders have been a bit more brisk than we probably anticipated. So I would say we are probably more optimistic than we were three months ago in that regard.

Mike Shlisky: I guess just your thoughts on global Golf as opposed to domestic. Any differences there?

Rick Olson: Connecting back to my earlier comment, things have not been as strong internationally. Participation internationally has been really good, just as it has been in the U.S. There is still money going into the industry, but we have seen a bit more softness there. Development remains pretty strong. Some of the geopolitical things that are going on in the world—we were prepared that that may slow and defer some of the projects in certain regions. Generally, we think things are just connected back to the macroeconomic environment not being quite as strong and maybe a bit less investment internationally than we are seeing in the U.S. Nothing that we are alarmed about, but something that we are watching closely.

Mike Shlisky: Thanks for that. I appreciate it. I will pass it along.

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

Heather Lilly: Thank you, everyone, for your questions and interest in The Toro Company. We look forward to talking with you again in June to discuss our second quarter 2026 results.

Operator: Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.