# EDGAR Filing Document

**Accession Number:** 0000737758
**File Stem:** 0000737758-26-000018
**Filing Date:** 2026-6
**Character Count:** 204574
**Document Hash:** 73a1f02d0eb6eb71977979ba729290ef
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000737758-26-000018.hdr.sgml**: 20260604

**ACCESSION NUMBER**: 0000737758-26-000018

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 97

**CONFORMED PERIOD OF REPORT**: 20260501

**FILED AS OF DATE**: 20260604

**DATE AS OF CHANGE**: 20260604

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TORO CO
- **CENTRAL INDEX KEY:** 0000737758
- **STANDARD INDUSTRIAL CLASSIFICATION:** LAWN & GARDEN TRACTORS & HOME LAWN & GARDEN EQUIPMENT [3524]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 410580470
- **STATE OF INCORPORATION:** MN
- **FISCAL YEAR END:** 1031

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-08649
- **FILM NUMBER:** 261063884

**BUSINESS ADDRESS:**
- **STREET 1:** 8111 LYNDALE AVE SOUTH
- **CITY:** BLOOMINGTON
- **STATE:** MN
- **ZIP:** 55420-1196
- **BUSINESS PHONE:** 9528888801

**MAIL ADDRESS:**
- **STREET 1:** 8111 LYNDALE AVENUE SOUTH
- **CITY:** BLOOMINGTON
- **STATE:** MN
- **ZIP:** 55420

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TORO CO/DE
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'? ttc-20260501

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q** 

☒ &nbsp;&nbsp;&nbsp;&nbsp; **Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**For the Quarterly Period Ended May 1, 2026**

☐ &nbsp;&nbsp;&nbsp;&nbsp; **Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**For the Transition Period from** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **to** &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Commission File Number: **1-8649** 

**THE TORO COMPANY** 

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **41-0580470** |
| State or Other Jurisdiction of <br>Incorporation or Organization | I.R.S. Employer Identification No. |

---

**8111 Lyndale Avenue South** 

**Bloomington, Minnesota 55420-1196** 

**Telephone Number: (952) 888-8801** 

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Common Stock, par value $0.01 per share** | **TTC** | **New York Stock Exchange** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding as of May 28, 2026 was 95,229,534.

------

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

**THE TORO COMPANY**

**FORM 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **Description** | | **Page Number** |
| **<u>[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#i9fc80454db9e4c1fbdc1fc481f42650d_10)</u>** | **<u>[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#i9fc80454db9e4c1fbdc1fc481f42650d_10)</u>** | <u>[3](#i9fc80454db9e4c1fbdc1fc481f42650d_10)</u> |
| **<u>[PART I.](#i9fc80454db9e4c1fbdc1fc481f42650d_13)</u>** | **<u>[FINANCIAL INFORMATION:](#i9fc80454db9e4c1fbdc1fc481f42650d_13)</u>** |  |
| **<u>[Item 1.](#i9fc80454db9e4c1fbdc1fc481f42650d_16)</u>** | <u>[Financial Statements](#i9fc80454db9e4c1fbdc1fc481f42650d_16)</u> |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Condensed Consolidated Statements of Earnings (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_19)</u> | <u>[5](#i9fc80454db9e4c1fbdc1fc481f42650d_19)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Condensed Consolidated Statements of Comprehensive Income (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_22)</u> | <u>[5](#i9fc80454db9e4c1fbdc1fc481f42650d_22)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Condensed Consolidated Balance Sheets (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_25)</u> | <u>[6](#i9fc80454db9e4c1fbdc1fc481f42650d_25)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Condensed Consolidated Statements of Cash Flows (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_28)</u> | <u>[7](#i9fc80454db9e4c1fbdc1fc481f42650d_28)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_31)</u> | <u>[8](#i9fc80454db9e4c1fbdc1fc481f42650d_31)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Condensed Consolidated Financial Statements (Unaudited)](#i9fc80454db9e4c1fbdc1fc481f42650d_34)</u> | <u>[9](#i9fc80454db9e4c1fbdc1fc481f42650d_34)</u> |
| **<u>[Item 2.](#i9fc80454db9e4c1fbdc1fc481f42650d_97)</u>** | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i9fc80454db9e4c1fbdc1fc481f42650d_97)</u> | <u>[32](#i9fc80454db9e4c1fbdc1fc481f42650d_97)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Company Overview](#i9fc80454db9e4c1fbdc1fc481f42650d_100)</u> | <u>[32](#i9fc80454db9e4c1fbdc1fc481f42650d_100)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Results of Operations](#i9fc80454db9e4c1fbdc1fc481f42650d_103)</u> | <u>[34](#i9fc80454db9e4c1fbdc1fc481f42650d_103)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Business Segments](#i9fc80454db9e4c1fbdc1fc481f42650d_106)</u> | <u>[36](#i9fc80454db9e4c1fbdc1fc481f42650d_106)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Financial Position](#i9fc80454db9e4c1fbdc1fc481f42650d_109)</u> | <u>[38](#i9fc80454db9e4c1fbdc1fc481f42650d_109)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Non-GAAP Financial Measures](#i9fc80454db9e4c1fbdc1fc481f42650d_112)</u> | <u>[40](#i9fc80454db9e4c1fbdc1fc481f42650d_112)</u> |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Critical Accounting Policies and Estimates](#i9fc80454db9e4c1fbdc1fc481f42650d_115)</u> | <u>[42](#i9fc80454db9e4c1fbdc1fc481f42650d_115)</u> |
| **<u>[Item 3.](#i9fc80454db9e4c1fbdc1fc481f42650d_118)</u>** | <u>[Quantitative and Qualitative Disclosures about Market Risk](#i9fc80454db9e4c1fbdc1fc481f42650d_118)</u> | <u>[42](#i9fc80454db9e4c1fbdc1fc481f42650d_118)</u> |
| **<u>[Item 4.](#i9fc80454db9e4c1fbdc1fc481f42650d_121)</u>** | <u>[Controls and Procedures](#i9fc80454db9e4c1fbdc1fc481f42650d_121)</u> | <u>[44](#i9fc80454db9e4c1fbdc1fc481f42650d_121)</u> |
| **<u>[PART II.](#i9fc80454db9e4c1fbdc1fc481f42650d_124)</u>** | **<u>[OTHER INFORMATION:](#i9fc80454db9e4c1fbdc1fc481f42650d_124)</u>** |  |
| **<u>[Item 1.](#i9fc80454db9e4c1fbdc1fc481f42650d_127)</u>** | <u>[Legal Proceedings](#i9fc80454db9e4c1fbdc1fc481f42650d_127)</u> | <u>[45](#i9fc80454db9e4c1fbdc1fc481f42650d_127)</u> |
| **<u>[Item 1A.](#i9fc80454db9e4c1fbdc1fc481f42650d_130)</u>** | <u>[Risk Factors](#i9fc80454db9e4c1fbdc1fc481f42650d_130)</u> | <u>[45](#i9fc80454db9e4c1fbdc1fc481f42650d_130)</u> |
| **<u>[Item 2.](#i9fc80454db9e4c1fbdc1fc481f42650d_133)</u>** | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#i9fc80454db9e4c1fbdc1fc481f42650d_133)</u> | <u>[45](#i9fc80454db9e4c1fbdc1fc481f42650d_133)</u> |
| **<u>[Item 5.](#i9fc80454db9e4c1fbdc1fc481f42650d_136)</u>** | <u>[Other Information](#i9fc80454db9e4c1fbdc1fc481f42650d_136)</u> | <u>[45](#i9fc80454db9e4c1fbdc1fc481f42650d_136)</u> |
| **<u>[Item 6.](#i9fc80454db9e4c1fbdc1fc481f42650d_139)</u>** | <u>[Exhibits](#i9fc80454db9e4c1fbdc1fc481f42650d_139)</u> | <u>[46](#i9fc80454db9e4c1fbdc1fc481f42650d_139)</u> |
|  | <u>[Signatures](#i9fc80454db9e4c1fbdc1fc481f42650d_142)</u> | <u>[47](#i9fc80454db9e4c1fbdc1fc481f42650d_142)</u> |

---

------

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical are forward-looking and reflect expectations and assumptions that we believe to be reasonable. Forward-looking statements are based on our current expectations of future events and often can be identified in this report and elsewhere by using words such as "expect," "strive," "outlook," "guidance," "forecast," "goal," "anticipate," "continue," "plan," "estimate," "project," "target," "improve," "believe," "become," "should," "could," "will," "would," "possible," "may," "likely," "intend," "can," "pursue," "potential," "approximately," variations of such words or the negative thereof, and similar expressions or future dates. Our forward-looking statements in this report include, among others, statements relating to our anticipated operating results, liquidity requirements, and financial condition and current trends and uncertainties; the anticipated impacts of field inventory levels and backlog, inflation, ongoing challenges related to tariffs and strategies to mitigate the effect thereof, governmental budget cuts, current wars and international sanctions, and geopolitical tensions, tight labor markets and other macroeconomic factors; our business strategies, priorities, goals, and commitments; the effect of recent acquisitions; business and productivity initiatives and anticipated sales growth, profitability, cost savings and other benefits associated therewith; and the effect of laws, rules, policies, regulations, tax reform, new accounting pronouncements, and outstanding litigation on our business and future performance.

Forward-looking statements are only projections and involve risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The following are some of the factors known to us that could cause our actual results to differ materially from what we have anticipated in our forward-looking statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adverse economic conditions and outlook in the United States and in other countries in which we conduct business, such as but not limited to: economic uncertainty; business slowdowns, suspensions or delays of production and commercial activity; slow or negative economic growth rates or recessionary conditions; reduced or negative consumer confidence; reduced consumer spending levels; changing consumer preferences; inflationary or deflationary pressures; higher short-term, mortgage, and other interest rates; increased or prolonged high or low unemployment rates and tight labor markets; higher costs, longer lead times and reduced availability of commodities, components, parts, and accessories, including as a result of transportation-related costs, inflation, changing prices, foreign currency fluctuations, tariffs, and/or duties; slowdowns or reductions in levels of interest in the game of golf or golf course activity, development, renovation, or improvement; golf course closures; reduced customer, governmental or municipal spending; reduced infrastructure spending; reduced levels of home ownership, construction, or sales; home foreclosures; the impact of U.S. federal debt, state debt, and sovereign debt defaults; reduced credit availability or unfavorable credit terms for us or our distributors, dealers, or end-user customers; and general economic and political conditions and expectations, any or all of which affect demand for our products and could lead to impairment and other charges and otherwise adversely affect our operating results and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Economic, political, legal and regulatory uncertainty or conflicts, including actions taken or which may be taken, such as reductions in governmental spending; monetary policy; political, geopolitical, trade, or other issues in the United States or internationally, including increased tariffs or trade wars;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Seasonality of our businesses and its impact on demand for our products and our working capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Effect that weather conditions or climate change have on demand for our products and operations, including our supply chain;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disruption and/or shortages in the availability and cost of commodities, components, parts, or accessories used in our products, including as a result of tariffs, the conflict in the Middle East, and the effect of our supply chain strategies to mitigate the effect of tariffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability and the ability of our distribution channel customers to maintain appropriate inventory levels, including as a result of changes in purchasing patterns by customers, and if we underestimate or overestimate demand for our products, and the effect of inventory management decisions of our distribution channel customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our recent acquisition of Tornado Infrastructure Equipment Ltd. or other acquisitions and alliances, strong customer relations, and new joint ventures, investments, or partnerships and our failure to successfully complete divestitures or other restructuring activities, including without limitation our ability to integrate acquired businesses, loss of substantial customers, and the ability of acquired companies or our alliances, joint ventures, investments or partnerships to achieve satisfactory operating results, including results being accretive to earnings, realization of synergies and expected cash flow generation, which could lead to impairment, restructuring, and other charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to leverage new, expanded or emerging markets, such as the broadband, fiber, digital and data center infrastructure market, and our ability to continue to enhance existing products and develop and market new products that respond to customer needs and preferences and achieve market acceptance, including in particular increased digital, alternative power, smart connected, and autonomous solutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in our product mix or geographic mix;

------

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Effect of competition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to cost-effectively expand and renovate existing facilities, open and manage new or acquired facilities, move production from or between manufacturing facilities, and/or any disruption at or near any of our facilities or other operations or those of our suppliers, distribution channel customers, mass retailers, or home centers where our products are sold;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to retain our executive officers or other key employees, attract and retain other qualified employees or successfully implement executive officer, key employee or other leadership or employee transitions and any failure by us, or our suppliers or distribution channel partners, to hire and/or retain a labor force to enhance existing products and develop and market new products, adequately staff manufacturing operations, perform service or warranty work or other necessary activities, or allow employees to adequately and safely perform their jobs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in composition of, financial viability of, and the relationships with, our distribution channel customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our credit arrangements and ratings and any material change in the availability or terms of, or termination or disruption of, credit offered to our customers, distributors, and dealers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our international operations, including but not limited to the effect of foreign currency exchange rate fluctuations and compliance with foreign legal and regulatory requirements, current wars and international sanctions and geopolitical tensions, political risks associated with the potential instability of governments and legal systems in countries in which we or our customers or suppliers conduct business, and other current and potential conflicts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our failure to comply with all applicable legal, regulatory, health and safety law and regulations and the effect of product quality issues, product liability claims, and other legal or administrative proceedings to which we are or may be subject;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to obtain and protect our intellectual property and other proprietary rights or operate our business without infringing upon the intellectual property or other proprietary rights of others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Failure of our information systems or information security practices or those of our business partners or third-party service providers to adequately perform and/or protect sensitive or confidential information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to achieve our financial projections or other business initiatives, including our Amplifying Maximum Productivity ("AMP") initiative, in the time periods or in the magnitude that we anticipate or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in accounting or tax standards and policies and/or assumptions utilized in determining accounting tax estimates, including the effects of the One Big Beautiful Bill Act; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Stock price volatility, including in response to the risks described herein or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as industry or general economic conditions, and other factors beyond our control.

For more information regarding these and other uncertainties and factors that could cause our actual results to differ materially from what we have anticipated in our forward-looking statements or otherwise could materially adversely affect our business, financial condition, or operating results, see our most recently filed Annual Report on Form 10-K, Part I, Item 1A, "Risk Factors;" and our subsequent filings with the Securities and Exchange Commission ("SEC").

All forward-looking statements included in this report are expressly qualified in their entirety by the foregoing cautionary statements. We caution readers not to place undue reliance on any forward-looking statement which speaks only as of the date made and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, the risks described in our most recent Annual Report on Form 10-K, Part I, Item 1A, "Risk Factors," and our subsequent SEC filings, as well as others that we may consider immaterial or do not anticipate at this time. These risks and uncertainties are not exclusive and further information concerning the company and our businesses, including factors that potentially could materially affect our financial results or condition, may emerge from time to time. We make no commitment to revise or update any forward-looking statements in order to reflect actual results, events or circumstances occurring or existing after the date any forward-looking statement is made, or changes in factors or assumptions affecting such forward-looking statements. We advise you, however, to consult any further disclosures we make on related subjects in our future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K we file with or furnish to the SEC.

------

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

**PART I. FINANCIAL INFORMATION**

ITEM 1. FINANCIAL STATEMENTS

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Unaudited)

(Dollars and shares in millions, except per share data)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Net sales | $1424.7 | $1317.9 | $2461.0 | $2312.9 |
| Cost of sales | 942.0 | 881.2 | 1641.8 | 1540.6 |
| &nbsp;&nbsp;&nbsp;Gross profit | 482.7 | 436.7 | 819.2 | 772.3 |
| Selling, general and administrative expense | 287.7 | 261.9 | 537.1 | 519.7 |
| &nbsp;&nbsp;&nbsp;Operating earnings | 195.0 | 174.8 | 282.1 | 252.6 |
| Interest expense | (14.8) | (15.8) | (29.0) | (30.8) |
| Other income, net | 3.2 | 9.7 | 17.2 | 13.0 |
| &nbsp;&nbsp;&nbsp;Earnings before income taxes | 183.4 | 168.7 | 270.3 | 234.8 |
| Income tax provision | 38.0 | 31.9 | 57.0 | 45.2 |
| &nbsp;&nbsp;&nbsp;Net earnings | $145.4 | $136.8 | $213.3 | $189.6 |
| Basic net earnings per share of common stock | $1.51 | $1.37 | $2.19 | $1.88 |
| Diluted net earnings per share of common stock | $1.50 | $1.37 | $2.18 | $1.88 |
| Weighted-average number of shares of common stock outstanding — Basic | 96.6 | 99.8 | 97.3 | 100.6 |
| Weighted-average number of shares of common stock outstanding — Diluted | 97.1 | 100.1 | 97.7 | 100.9 |

---

See accompanying Notes to Condensed Consolidated Financial Statements.

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in millions)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Net earnings | $145.4 | $136.8 | $213.3 | $189.6 |
| Other comprehensive income (loss), net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (5.6) | 14.8 | 16.4 | 4.9 |
| &nbsp;&nbsp;Derivative instruments, net of tax of $1.6; $(4.1) $(1.0); $(1.6), respectively | 3.8 | (9.6) | (0.4) | (0.9) |
| Other comprehensive income (loss), net of tax | (1.8) | 5.2 | 16.0 | 4.0 |
| Comprehensive income | $143.6 | $142.0 | $229.3 | $193.6 |

---

See accompanying Notes to Condensed Consolidated Financial Statements.

------

<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions, except per share data)

---

| | | | |
|:---|:---|:---|:---|
| | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| <u>ASSETS</u> |  |  |  |
| Cash and cash equivalents | $180.4 | $176.5 | $341 |
| Receivables, net | 575.1 | 602.5 | 378.2 |
| Inventories, net | 923.4 | 1119.8 | 920.8 |
| Prepaid expenses and other current assets | 81.3 | 80.1 | 65.1 |
| &nbsp;&nbsp;&nbsp;Total current assets | 1760.2 | 1978.9 | 1705.1 |
| Property, plant, and equipment, net | 623.0 | 635.8 | 615.8 |
| Goodwill | 591.0 | 450.8 | 450.9 |
| Other intangible assets, net | 433.8 | 487.3 | 390.3 |
| Right-of-use assets | 115.7 | 110.9 | 114.7 |
| Investment in finance affiliate | 45.0 | 51.2 | 41.0 |
| Deferred income taxes | 120.7 | 58.6 | 105.8 |
| Other assets | 17.2 | 14.6 | 15.2 |
| Total assets | $3706.6 | $3788.1 | $3438.8 |
| <u>LIABILITIES AND STOCKHOLDERS' EQUITY</u> |  |  |  |
| Current portion of long-term debt and short-term borrowings | $— | $20 | $— |
| Accounts payable | 551.8 | 516.0 | 367.6 |
| Accrued liabilities | 559.2 | 536.7 | 525.5 |
| Short-term lease liabilities | 20.2 | 18.5 | 19.3 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 1131.2 | 1091.2 | 912.4 |
| Long-term debt, less current portion | 1016.8 | 1077.1 | 921.5 |
| Long-term lease liabilities | 100.0 | 96.2 | 100.3 |
| Deferred income taxes | 19.9 | 0.6 | 0.8 |
| Other long-term liabilities | 70.6 | 46.4 | 50.5 |
| Stockholders' equity: |  |  |  |
| &nbsp;&nbsp;Preferred stock, par value $0.01 per share, authorized 1,000,000 voting and 850,000 non-voting shares, none issued and outstanding<sup>1</sup> |  |  |  |
| &nbsp;&nbsp;Common stock, par value $0.01 per share, authorized 175,000,000 shares; issued and outstanding 95,383,623 shares as of May 1, 2026, 99,013,499 shares as of May 2, 2025, and 97,888,105 shares as of October 31, 2025<sup>1</sup> | 1.0 | 99.0 | 97.9 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 1386.2 | 1419.6 | 1390.5 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (19.1) | (42.0) | (35.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 1368.1 | 1476.6 | 1453.3 |
| Total liabilities and stockholders' equity | $3706.6 | $3788.1 | $3438.8 |

---

<sup>1</sup> During the company's second quarter ended May 1, 2026 the company amended its certificate of incorporation to change the par value of its preferred and common stock from $1.00 per share to $0.01 per share. This change has been adopted prospectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)

---

| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| | **May 1, 2026** | **May 2, 2025** |
| Cash flows from operating activities: |  |  |
| Net earnings | $213.3 | $189.6 |
| Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Non-cash income from finance affiliate | (7.8) | (9.8) |
| &nbsp;&nbsp;&nbsp;Distributions from finance affiliate, net | 3.8 | 7.8 |
| &nbsp;&nbsp;&nbsp;Depreciation of property, plant, and equipment | 48.9 | 48.0 |
| &nbsp;&nbsp;&nbsp;Amortization of other intangible assets | 21.1 | 15.6 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense | 12.5 | 9.8 |
| &nbsp;&nbsp;Deferred income taxes<sup>1</sup> | (13.3) | (11.9) |
| &nbsp;&nbsp;&nbsp;Other | (3.4) | 0.9 |
| Changes in operating assets and liabilities, net of the effect of acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;Receivables, net | (189.5) | (141.6) |
| &nbsp;&nbsp;&nbsp;Inventories, net | 37.7 | (78.7) |
| &nbsp;&nbsp;Other assets<sup>1</sup> | 6.2 | 63.2 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 166.3 | 59.5 |
| &nbsp;&nbsp;Other liabilities<sup>1</sup> | (2.3) | (29.3) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 293.5 | 123.1 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of property, plant, and equipment | (28.0) | (38.4) |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of property, plant, and equipment | 11.6 | 0.2 |
| &nbsp;&nbsp;&nbsp;Acquisitions, net of cash received | (210.3) | (4.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (226.7) | (42.4) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Borrowings under debt arrangements | 350.0 | 740.0 |
| &nbsp;&nbsp;&nbsp;Repayments under debt arrangements | (255.0) | (565.0) |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of stock options | 37.4 | 1.3 |
| &nbsp;&nbsp;&nbsp;Payments of withholding taxes for stock awards | (1.2) | (1.8) |
| &nbsp;&nbsp;&nbsp;Common stock repurchases | (285.1) | (200.0) |
| &nbsp;&nbsp;&nbsp;Dividends paid on common stock | (75.8) | (76.3) |
| &nbsp;&nbsp;&nbsp;Other | (2.7) | (3.1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (232.4) | (104.9) |
| Effect of exchange rates on cash and cash equivalents | 5.0 | 1.2 |
| Net decrease in cash and cash equivalents | (160.6) | (23.0) |
| Cash and cash equivalents as of the beginning of the fiscal period | 341.0 | 199.5 |
| Cash and cash equivalents as of the end of the fiscal period | $180.4 | $176.5 |

---

<sup>1</sup> Presentation of prior year deferred income taxes has been conformed to the current year presentation. There was no change to net cash provided by operating activities.

See accompanying Notes to Condensed Consolidated Financial Statements.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

THE TORO COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

(Dollars in millions, except per share data)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Common<br>Stock** | **Retained<br>Earnings** | **Accumulated Other<br>Comprehensive Loss** | **Total Stockholders'<br>Equity** |
| Balance as of January 30, 2026 | $96.9 | $1339.6 | $(17.3) | $1419.2 |
| Change in common stock par value<sup>1</sup> | (95.9) | 95.9 |  |  |
| Cash dividends paid on common stock - $0.39 per share |  | (37.5) |  | (37.5) |
| Issuance of 449,929 shares of common stock under stock-based compensation plans |  | 28.3 |  | 28.3 |
| Stock-based compensation expense |  | 6.6 |  | 6.6 |
| Repurchase of 1,998,123 shares of common stock |  | (192.1) |  | (192.1) |
| Other comprehensive loss |  |  | (1.8) | (1.8) |
| Net earnings |  | 145.4 |  | 145.4 |
| Balance as of May 1, 2026 | $1.0 | $1386.2 | $(19.1) | $1368.1 |
| Balance as of October 31, 2025 | $97.9 | $1390.5 | $(35.1) | $1453.3 |
| Change in common stock par value<sup>1</sup> | (95.9) | 95.9 |  |  |
| Cash dividends paid on common stock - $0.78 per share |  | (75.8) |  | (75.8) |
| Issuance of 638,123 shares of common stock under stock-based compensation plans, less contribution of 3,302 shares of common stock to a deferred compensation trust | 0.1 | 37.3 |  | 37.4 |
| Stock-based compensation expense |  | 12.5 |  | 12.5 |
| Repurchase of 3,139,654 shares of common stock | (1.1) | (287.5) |  | (288.6) |
| Other comprehensive income |  |  | 16.0 | 16.0 |
| Net earnings |  | 213.3 |  | 213.3 |
| Balance as of May 1, 2026 | $1.0 | $1386.2 | $(19.1) | $1368.1 |
| Balance as of January 31, 2025 | $100.3 | $1414.5 | $(47.2) | $1467.6 |
| Cash dividends paid on common stock - $0.38 per share |  | (37.8) |  | (37.8) |
| Issuance of 27,424 shares of common stock under stock-based compensation plans |  | 0.6 |  | 0.6 |
| Stock-based compensation expense |  | 5.4 |  | 5.4 |
| Repurchase of 1,313,640 shares of common stock | (1.3) | (99.9) |  | (101.2) |
| Other comprehensive income |  |  | 5.2 | 5.2 |
| Net loss |  | 136.8 |  | 136.8 |
| Balance as of May 2, 2025 | $99.0 | $1419.6 | $(42.0) | $1476.6 |
| Balance as of October 31, 2024 | $101.5 | $1496.4 | $(46.0) | $1551.9 |
| Cash dividends paid on common stock - $0.76 per share |  | (76.3) |  | (76.3) |
| Issuance of 123,753 shares of common stock under stock-based compensation plans, less contribution of 8,673 shares to a deferred compensation trust |  | 1.3 |  | 1.3 |
| Stock-based compensation expense |  | 9.8 |  | 9.8 |
| Repurchase of 2,573,705 shares of common stock | (2.5) | (201.2) |  | (203.7) |
| Other comprehensive income |  |  | 4.0 | 4.0 |
| Net earnings |  | 189.6 |  | 189.6 |
| Balance as of May 2, 2025 | $99.0 | $1419.6 | $(42.0) | $1476.6 |

---

<sup>1</sup> During the company's second quarter ended May 1, 2026 the company amended its certificate of incorporation to change the par value of its common stock from $1.00 per share to $0.01 per share. This change has been adopted prospectively.

See accompanying Notes to Condensed Consolidated Financial Statements.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

THE TORO COMPANY AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

May 1, 2026

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| | |
|:---|:---|
| **1** | **Basis of Presentation** |

---

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by United States ("U.S.") generally accepted accounting principles ("GAAP") for complete financial statements. Unless the context indicates otherwise, the terms "company," "TTC," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated from the unaudited Condensed Consolidated Financial Statements.

In the opinion of management, the unaudited Condensed Consolidated Financial Statements include all adjustments, consisting primarily of recurring accruals, considered necessary for the fair presentation of the company's consolidated financial position, results of operations, and cash flows for the periods presented. Due to seasonality within the industries in which the company's businesses operate, among other factors, operating results for the six months ended May 1, 2026 cannot be annualized to determine the expected results for the fiscal year ending October 31, 2026.

The company's fiscal year ends on October 31 and quarterly results are reported based on three-month periods that generally end on the Friday closest to the calendar quarter end. For comparative purposes, however, the company's second and third quarters always include exactly 13 weeks of results so that the quarter end date for these two quarters is not necessarily the Friday closest to the calendar month end.

For further information regarding the company's basis of presentation, refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in the company's Annual Report on Form 10-K for the fiscal year ended October 31, 2025. The policies described in that report are used for preparing the company's quarterly reports on Form 10-Q.

***Accounting Policies and Estimates***

In preparing the Condensed Consolidated Financial Statements in conformity with U.S. GAAP, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. Estimates are used in determining, among other items, sales promotion and incentive accruals, incentive compensation accruals, income tax accruals, inventory valuation, warranty accruals, allowances for current expected credit losses, pension accruals, self-insurance accruals, legal accruals, right-of-use assets and lease liabilities, useful lives for tangible and finite-lived intangible assets, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, and valuations of the assets acquired and liabilities assumed in a business combination or an asset acquisition, when applicable. These estimates and assumptions are based on management's best estimates and judgments at the time they are made and are generally derived from management's understanding and analysis of the relevant and current circumstances, historical experience, and actuarial and other independent external third-party specialist valuations, when applicable. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances, including the economic environment. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with certainty, actual amounts could differ significantly from those estimated at the time the Condensed Consolidated Financial Statements are prepared.

***Par Value Common Stock***

On March 19, 2026, the Company filed a Restated Certificate of Incorporation which decreased the par value of all the Company's capital stock, including our common stock and authorized "blank check" preferred stock from $1.00 to $0.01 per share (the "Par Value Amendment"), which was approved by the Company's stockholders on March 17, 2026. The Par Value Amendment had no impact on the value of the Company's capital stock, including our common stock. In addition, the Par Value Amendment had no effect on the dollar amount of the Company's total stockholders' equity. The Par Value Amendment did not change the number of authorized shares of common stock or our preferred stock nor did it have any impact on our outstanding common stock or any options or rights to purchase our common stock. The Par Value Amendment had no effect on the rights of the holders of our common stock or our authorized preferred stock, none of which are currently outstanding, except for reducing the minimum amount per share the Company must receive upon the issuance of any shares of our capital stock from $1.00 to $0.01.

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***New Accounting Pronouncements***

In September 2025, the Financial Accounting Standards Board ("FASB") issued accounting standard update ("ASU") No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for software costs that are accounted for under Subtopic 350-40 by replacing the stage-based model with a principles-based approach. The amended guidance will become effective for the company's fiscal 2029 annual period and interim periods beginning with the first quarter of fiscal 2029. Early adoption is permitted. The company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which is intended to improve guidance on the measurement of credit losses on accounts receivable and contract assets. The amended guidance is optional and, if the company elects the practical expedient, will become effective for the company's fiscal 2027 annual period and interim periods beginning with the first quarter of fiscal 2027. Early adoption is permitted. The company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve disclosures about a public business entity's expenses by requiring disaggregated quantitative disclosure, in the notes to the financial statements, of prescribed expense categories included within relevant income statement expense captions. The amended guidance will become effective for the company's fiscal 2028 annual period, and interim periods beginning with the first quarter of fiscal 2029. The company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to income tax disclosures, which is designed to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amended guidance will become effective for the company's fiscal 2026 annual period. The company is currently evaluating the impact of this new standard on its Condensed Consolidated Financial Statements and related disclosures.

The company believes that all other recently issued accounting pronouncements from the FASB that the company has not noted above will not have a material impact on its Condensed Consolidated Financial Statements or do not apply to its operations.

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| | |
|:---|:---|
| **2** | **Acquisitions and Divestitures** |

---

***Tornado Infrastructure Equipment Ltd. ("Tornado Infrastructure Equipment")***

On December 8, 2025 ("closing date"), pursuant to an Arrangement Agreement ("Purchase Agreement") dated October 6, 2025, the company completed its acquisition of Tornado Infrastructure Equipment, a publicly held Canadian company and a manufacturer in the hydrovac excavation solutions industry. Tornado Infrastructure Equipment manufactures hydrovac excavation solutions and industrial equipment solutions for the underground construction, power transmission and energy markets and provides innovative product offerings that broaden and strengthen the company's Professional segment and expands its dealer network.

The Tornado Infrastructure Equipment acquisition was structured as an equity purchase, pursuant to which the company acquired 100 percent of the equity interests of the legal entities that comprised Tornado Infrastructure Equipment, with the legal entities continuing as surviving entities and wholly-owned subsidiaries of the company. As part of the acquisition, the company also acquired the real property used by Tornado Infrastructure Equipment. The cash consideration, net of cash acquired, was $210.3 million ("purchase price"). The company funded the purchase price with borrowings under its existing revolving credit facility. As a result of the acquisition, the company incurred approximately $3.5 million and $5.7 million of acquisition-related transaction costs during the three-month and six-month periods ended May 1, 2026, respectively. Acquisition-related transaction costs are recorded within selling, general and administrative expense within the Condensed Consolidated Statements of Earnings.

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*Preliminary Fair Value Measurements*

The company accounted for the acquisition in accordance with the accounting standards codification guidance which requires identifiable assets acquired and liabilities assumed to be measured at their estimated fair values as of the closing date. The company believes that the information available as of the closing date provides a reasonable basis for estimating fair values of the assets acquired and liabilities assumed; however, the company is continuing to finalize these amounts. Thus, the preliminary measurements of the fair values of the assets acquired and liabilities assumed within the preliminary purchase price allocation are subject to change as additional information becomes available and as additional analysis is performed. The company expects to finalize its preliminary valuation and complete the allocation of the preliminary purchase price as soon as practicable, but no later than one year from the closing date of the acquisition, as required.

The following table summarizes the preliminary estimated fair values assigned to the assets acquired and liabilities assumed. These preliminary fair values are based on internal company and independent external third-party valuations and are subject to change as certain asset and liability valuations are finalized:

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| | |
|:---|:---|
| **(Dollars in millions)** | **December 8, 2025** |
| Cash and cash equivalents | $21.3 |
| Receivables | 5.4 |
| Inventories | 35.9 |
| Prepaid expenses and other current assets | 3.6 |
| Property, plant, and equipment, net | 14.8 |
| Right-of-use assets, net | 2.6 |
| Goodwill | 138.1 |
| Other intangible assets: | 63.8 |
| &nbsp;&nbsp;Indefinite-lived trade name | 19.6 |
| &nbsp;&nbsp;Finite-lived developed technology | 9.8 |
| &nbsp;&nbsp;Finite-lived customer-related | 29.5 |
| &nbsp;&nbsp;Finite-lived backlog | 4.9 |
| Deferred income tax assets | 0.1 |
| Accounts payable | (13.4) |
| Accrued liabilities | (18.5) |
| Short-term lease liabilities | (0.8) |
| Long-term lease liabilities | (2.4) |
| Deferred income tax liabilities | (18.9) |
| Total fair value of net assets acquired | 231.6 |
| &nbsp;&nbsp;Less: cash and cash equivalents acquired | (21.3) |
| Total purchase price | $210.3 |

---

The goodwill recognized is primarily attributable to the value of the workforce, the reputation of Tornado Infrastructure Equipment, expected future cash flows, and expected synergies, including customer and dealer growth opportunities, integrating and expanding existing product lines, and cost reduction initiatives. Key areas of expected cost reduction synergies include increased purchasing power for commodities, components, parts, and supply chain consolidation. The goodwill resulting from the acquisition of Tornado Infrastructure Equipment was recognized within the company's Professional segment and is the primary driver for the increase in the company's Professional segment goodwill to $581.0 million as of May 1, 2026 from $440.9 million as of October 31, 2025. Goodwill is non-deductible for tax purposes.

*Other Intangible Assets Acquired*

As mentioned above, the company has yet to complete its analysis and valuation for measuring the fair values of the acquired other intangible assets. The company expects to finalize its preliminary valuation of other intangible assets as soon as practicable, but no later than one year from the closing date of the acquisition, as required. The preliminary allocation of the purchase price to the net assets acquired resulted in the recognition of $63.8 million of other intangible assets as of the closing date. The useful lives of the developed technology, customer-related, and backlog intangible assets were determined based on the period of expected cash flows used to measure the fair value of the respective intangible assets adjusted as appropriate for entity-specific factors including legal, regulatory, contractual, competitive, economic, and/or other factors that may limit the useful life of the respective intangible asset.

Amortization expense for the finite-lived intangible assets resulting from the acquisition of Tornado Infrastructure Equipment for the three-month and six-month periods ended May 1, 2026 was $3.8 million and $6.3 million, respectively.

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*Results of Operations*

Tornado Infrastructure Equipment's results of operations are included within the company's Professional reportable segment in the company's Condensed Consolidated Financial Statements from the closing date. For the three-month and six-month periods ended May 1, 2026, the company recognized $29.7 million and $48.7 million of net sales, respectively, from Tornado Infrastructure Equipment's operations. Tornado Infrastructure Equipment's operations had an immaterial impact on Professional segment earnings for the three month and six-month period ended May 1, 2026. Unaudited pro forma financial information is not disclosed as the Tornado Infrastructure Equipment acquisition was not considered significant to the company's Consolidated Results of Operations.

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| | |
|:---|:---|
| **3** | **Segment Data** |

---

The company's businesses are organized, managed, and internally grouped into segments based on similarities in products and services. Segment determination is based on the manner in which the Chief Operating Decision Maker "CODM" organizes segments for making operating and investment decisions and assessing performance. The company has identified eight operating segments and has aggregated certain of those operating segments into two reportable segments: Professional and Residential. The aggregation of the company's segments is based on the segments having the following similarities: economic characteristics, types of products and services, types of production processes, type or class of customers, and method of distribution. For a summary of our products by market for our Professional and Residential reportable segments, refer to Part I, Item 1, "Business," of the company's Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

The company's remaining activities consist of a wholly-owned domestic distribution company, certain corporate activities, and the elimination of intersegment revenues and expenses. Corporate activities include general corporate expenditures (finance, human resources, legal, information technology, public relations, business development, and similar activities) and other unallocated corporate assets and liabilities, such as corporate facilities, severance and termination benefits, facility exit costs, and deferred tax assets and liabilities. These remaining activities are presented as "Other" due to their insignificance.

Our CODM is the Chairman of the Board and Chief Executive Officer. The CODM predominantly evaluates the performance of our segments using earnings before interest and taxes ("EBIT"). This metric provides our CODM with a comprehensive view of each segment's profitability, enabling informed decision-making and effective resource allocation. The CODM regularly reviews EBIT to monitor progress against performance targets, focusing on actual-to-plan variances. These assessments help identify trends, compare segment profitability, and determine whether additional resources or strategic adjustments are necessary to achieve guideline goals. Additionally, the significant expense categories regularly reviewed by the CODM include cost of sales, sales, general and administrative expense, non-cash charges, such as impairment, and other income (expense) items. These other items consist of foreign currency gains and losses, interest income and expense, gains and losses from sales of fixed assets, and income and losses from equity method investments and business divestitures.

The accounting policies of the reportable business segments are the same as those described in the summary of significant accounting policies in Note 1, *Summary of Significant Accounting Policies and Related Data* of the company's Annual Report on Form 10-K for the fiscal year ended October 31, 2025. The company evaluates the performance of its Professional and Residential reportable business segment results based on EBIT which includes allocated expenses that these operations would have incurred otherwise, but does not include general corporate expenses, interest expense, and income taxes. EBIT for the company's Other activities includes earnings (loss) from a domestic wholly-owned distribution company, certain corporate activities, non-cash impairment charges, other income, and interest expense. The company accounts for intersegment gross sales at current market prices.

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The following tables present summarized financial information concerning the company's reportable business segments and Other activities (dollars in millions):

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| | | | | |
|:---|:---|:---|:---|:---|
| **Three Months Ended May 1, 2026** | **Professional** | **Residential** | **Other** | **Total** |
| Net sales from external customers | $1084.6 | $310.4 | $29.7 | $1424.7 |
| Intersegment gross sales (eliminations) | 22.0 |  | (22.0) |  |
| Net sales | 1106.6 | 310.4 | 7.7 | 1424.7 |
| Cost of sales | 688.3 | 243.8 | 9.9 | 942.0 |
| Selling, general and administrative expense | 195.5 | 36.3 | 55.9 | 287.7 |
| Other income, net | 1.6 |  | 1.6 | 3.2 |
| Earnings (loss) before interest and taxes | $224.4 | $30.3 | $(56.5) | $198.2 |
| Interest expense |  |  |  | (14.8) |
| Provision for income taxes |  |  |  | 38.0 |
| Net earnings |  |  |  | $145.4 |
| **Six Months Ended May 1, 2026** | **Professional** | **Residential** | **Other** | **Total** |
| Net sales from external customers | $1894.0 | $516.4 | $50.6 | $2461.0 |
| Intersegment gross sales (eliminations) | 36.6 |  | (36.6) |  |
| Net sales | 1930.6 | 516.4 | 14.0 | 2461.0 |
| Cost of sales | 1209.2 | 409.2 | 23.4 | 1641.8 |
| Selling, general and administrative expense | 361.5 | 64.1 | 111.5 | 537.1 |
| Other income, net | 2.1 | 0.4 | 14.7 | 17.2 |
| Earnings (loss) before interest and taxes | $362.0 | $43.5 | $(106.2) | $299.3 |
| Interest expense |  |  |  | (29.0) |
| Provision for income taxes |  |  |  | 57.0 |
| Net earnings |  |  |  | $213.3 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **Three Months Ended May 2, 2025** | **Professional** | **Residential** | **Other** | **Total** |
| Net sales from external customers | $994.2 | $297.4 | $26.3 | $1317.9 |
| Intersegment gross sales (eliminations) | 19.9 |  | (19.9) |  |
| Net sales | 1014.1 | 297.4 | 6.4 | 1317.9 |
| Cost of sales | 632.6 | 243.6 | 5.0 | 881.2 |
| Selling, general and administrative expense | 180.2 | 37.7 | 44.0 | 261.9 |
| Other income, net | 0.8 |  | 8.9 | 9.7 |
| Earnings (loss) before interest and taxes | $202.1 | $16.1 | $(33.7) | $184.5 |
| Interest expense |  |  |  | (15.8) |
| Provision for income taxes |  |  |  | 31.9 |
| Net earnings |  |  |  | $136.8 |
| **Six Months Ended May 2, 2025** | **Professional** | **Residential** | **Other** | **Total** |
| Net sales from external customers | $1748.5 | $518.4 | $46.0 | $2312.9 |
| Intersegment gross sales (eliminations) | 34.4 |  | (34.4) |  |
| Net sales | 1782.9 | 518.4 | 11.6 | 2312.9 |
| Cost of sales | 1113.6 | 414.7 | 12.3 | 1540.6 |
| Selling, general and administrative expense | 341.4 | 70.5 | 107.8 | 519.7 |
| Other income, net | 1.4 | 0.1 | 11.5 | 13.0 |
| Earnings (loss) before interest and taxes | $329.3 | $33.3 | $(97.0) | $265.6 |
| Interest expense |  |  |  | (30.8) |
| Provision for income taxes |  |  |  | 45.2 |
| Net earnings |  |  |  | $189.6 |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Six Months Ended May 1, 2026** | **Professional** | **Residential** | **Other** | **Total** |
| Total assets | $2618.3 | $458.4 | $629.9 | $3706.6 |
| Depreciation and amortization | $51.1 | $8.5 | $12.4 | $72.0 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **Six Months Ended May 2, 2025** | **Professional** | **Residential** | **Other** | **Total** |
| Total assets | $2733.8 | $631.5 | $422.8 | $3788.1 |
| Depreciation and amortization | $45.9 | $9.1 | $10.2 | $65.2 |

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| | |
|:---|:---|
| **4** | **Revenue** |

---

The following tables disaggregate the company's reportable segment net sales by major product type and geographic market (dollars in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Three Months Ended May 1, 2026** | **Professional** | **Residential** | **Other** | **Total** |
| Revenue by product type: |  |  |  |  |
| &nbsp;&nbsp;Equipment | $988.7 | $309.9 | $5.5 | $1304.1 |
| &nbsp;&nbsp;Irrigation | 117.9 | 0.5 | 2.2 | 120.6 |
| Total net sales | $1106.6 | $310.4 | $7.7 | $1424.7 |
| Revenue by geographic market: |  |  |  |  |
| &nbsp;&nbsp;United States | $869.5 | $268.7 | $7.7 | $1145.9 |
| &nbsp;&nbsp;International countries | 237.1 | 41.7 |  | 278.8 |
| Total net sales | $1106.6 | $310.4 | $7.7 | $1424.7 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Six Months Ended May 1, 2026** | **Professional** | **Residential** | **Other** | **Total** |
| Revenue by product type: |  |  |  |  |
| &nbsp;&nbsp;Equipment | $1712.5 | $515.3 | $10.7 | $2238.5 |
| &nbsp;&nbsp;Irrigation | 218.1 | 1.1 | 3.3 | 222.5 |
| Total net sales | $1930.6 | $516.4 | $14.0 | $2461.0 |
| Revenue by geographic market: |  |  |  |  |
| &nbsp;&nbsp;United States | $1533.9 | $446.8 | $14.0 | $1994.7 |
| &nbsp;&nbsp;International countries | 396.7 | 69.6 |  | 466.3 |
| Total net sales | $1930.6 | $516.4 | $14.0 | $2461.0 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Three Months Ended May 2, 2025** | **Professional** | **Residential** | **Other** | **Total** |
| Revenue by product type: |  |  |  |  |
| &nbsp;&nbsp;Equipment | $892.3 | $296.9 | $4.9 | $1194.1 |
| &nbsp;&nbsp;Irrigation | 121.8 | 0.5 | 1.5 | 123.8 |
| Total net sales | $1014.1 | $297.4 | $6.4 | $1317.9 |
| Revenue by geographic market: |  |  |  |  |
| &nbsp;&nbsp;United States | $795.6 | $260.3 | $6.4 | $1062.3 |
| &nbsp;&nbsp;International countries | 218.5 | 37.1 |  | 255.6 |
| Total net sales | $1014.1 | $297.4 | $6.4 | $1317.9 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Six Months Ended May 2, 2025** | **Professional** | **Residential** | **Other** | **Total** |
| Revenue by product type: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Equipment | $1554.2 | $517.0 | $9.1 | $2080.3 |
| &nbsp;&nbsp;&nbsp;Irrigation | 228.7 | 1.4 | 2.5 | 232.6 |
| Total net sales | $1782.9 | $518.4 | $11.6 | $2312.9 |
| Revenue by geographic market: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;United States | $1380.6 | $453.7 | $11.6 | $1845.9 |
| &nbsp;&nbsp;&nbsp;International countries | 402.3 | 64.7 |  | 467.0 |
| Total net sales | $1782.9 | $518.4 | $11.6 | $2312.9 |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

***Contract Liabilities***

Contract liabilities relate to deferred revenue recognized for cash consideration received at contract inception in advance of the company's performance under the respective contract and generally relate to the sale of separately priced extended warranty contracts, service contracts, and non-refundable customer deposits. The company recognizes revenue over the term of the contract in proportion to the costs expected to be incurred in satisfying the performance obligations under the separately priced extended warranty and service contracts. For non-refundable customer deposits, the company recognizes revenue as of the point in time in which the performance obligation has been satisfied under the contract with the customer, which typically occurs upon change in control at the time a product is shipped. As of May 1, 2026 and October 31, 2025, $38.1 million and $34.0 million, respectively, of deferred revenue associated with outstanding separately priced extended warranty contracts, service contracts, and non-refundable customer deposits was reported within accrued liabilities and other long-term liabilities in the Condensed Consolidated Balance Sheets. For the three and six months ended May 1, 2026, the company recognized $3.6 million and $7.0 million, respectively, of the October 31, 2025 deferred revenue balance within net sales in the Condensed Consolidated Statements of Earnings. The company expects to recognize approximately $6.0 million of the October 31, 2025 deferred revenue amount within net sales throughout the remainder of fiscal 2026, $10.6 million in fiscal 2027, and $10.4 million thereafter.

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| | |
|:---|:---|
| **5** | **Goodwill and Other Intangible Assets, Net** |

---

The company's acquisition of Tornado Infrastructure Equipment on December 8, 2025 resulted in the recognition of $138.1 million and $63.8 million of preliminary goodwill and other intangible assets, respectively. For additional information on the company's acquisition of Tornado Infrastructure Equipment, refer to Note 2, *Acquisitions and Divestitures*.

***Goodwill***

The changes in the carrying amount of goodwill by reportable segment for the first six months of fiscal 2026 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **Professional** | **Residential** | **Other** | **Total** |
| Balance as of October 31, 2025 | $440.9 | $10.0 | $— | $450.9 |
| Goodwill acquired | 138.1 |  |  | 138.1 |
| Translation adjustments | 2.0 |  |  | 2.0 |
| Balance as of May 1, 2026 | $581.0 | $10.0 | $— | $591.0 |

---

***Other Intangible Assets, Net***

The components of other intangible assets, net as of May 1, 2026, May 2, 2025, and October 31, 2025 were as follows (dollars in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **May 1, 2026** | **Weighted-Average Useful Life in Years** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net** |
| Patents | 9.5 | $10.1 | $(9.5) | $0.6 |
| Customer-related | 15.3 | 350.0 | (158.7) | 191.3 |
| Developed technology | 7.2 | 117.1 | (89.1) | 28.0 |
| Trade names | 12.9 | 9.6 | (7.0) | 2.6 |
| Backlog and other | 0.5 | 5.0 | (4.1) | 0.9 |
| &nbsp;&nbsp;Total finite-lived | 13.0 | 491.8 | (268.4) | 223.4 |
| Indefinite-lived - trade names |  | 210.4 |  | 210.4 |
| Total other intangible assets, net |  | $702.2 | $(268.4) | $433.8 |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

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| | | | | |
|:---|:---|:---|:---|:---|
| **May 2, 2025** | **Weighted-Average Useful Life in Years** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net** |
| Patents | 9.9 | $18.2 | $(17.1) | $1.1 |
| Customer-related | 16.0 | 320.0 | (138.2) | 181.8 |
| Developed technology | 7.0 | 107.1 | (78.0) | 29.1 |
| Trade names | 13.7 | 10.8 | (7.2) | 3.6 |
| &nbsp;&nbsp;Total finite-lived | 13.6 | 456.1 | (240.5) | 215.6 |
| Indefinite-lived - trade names |  | 271.7 |  | 271.7 |
| Total other intangible assets, net |  | $727.8 | $(240.5) | $487.3 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **October 31, 2025** | **Weighted-Average Useful Life in Years** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net** |
| Patents | 9.5 | $10.1 | $(9.3) | $0.8 |
| Customer-related | 16.0 | 320.0 | (147.6) | 172.4 |
| Developed technology | 7.0 | 107.1 | (83.3) | 23.8 |
| Trade names | 12.9 | 9.6 | (6.9) | 2.7 |
| &nbsp;&nbsp;Total finite-lived | 13.6 | 446.8 | (247.1) | 199.7 |
| Indefinite-lived - trade names |  | 190.6 |  | 190.6 |
| Total other intangible assets, net |  | $637.4 | $(247.1) | $390.3 |

---

Amortization expense for finite-lived intangible assets for the three and six months ended May 1, 2026 were $11.1 million and $21.1 million, respectively. Amortization expense for finite-lived intangible assets for the three and six months ended May 2, 2025 were $7.7 million and $15.6 million, respectively. As of May 1, 2026, estimated amortization expense for the remainder of fiscal 2026 and succeeding fiscal years is as follows:

---

| | |
|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** |
| 2026 (remaining) | $18.3 |
| 2027 | 29.9 |
| 2028 | 27.3 |
| 2029 | 26.1 |
| 2030 | 24.9 |
| 2031 | 24.7 |
| Thereafter | 72.2 |
| Total estimated amortization expense | $223.4 |

---

---

| | |
|:---|:---|
| **6** | **Indebtedness** |

---

The following is a summary of the company's indebtedness:

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Revolving credit facility, due October 2029 | $95.0 | $175.0 | $— |
| Term loan, due October 2029 | 200.0 | 200.0 | 200.0 |
| Term loan, due April 2027 |  | 200.0 |  |
| 3.81% series A senior notes, due June 2029 | 100.0 | 100.0 | 100.0 |
| 3.91% series B senior notes, due June 2031 | 100.0 | 100.0 | 100.0 |
| 3.97% senior notes, due June 2032 | 100.0 | 100.0 | 100.0 |
| 5.27% senior notes, due September 2032 | 200.0 |  | 200.0 |
| 7.8% debentures, due June 2027 | 100.0 | 100.0 | 100.0 |
| 6.625% senior notes, due May 2037 | 124.3 | 124.3 | 124.3 |
| Less: unamortized debt issuance costs | 2.5 | 2.2 | 2.8 |
| &nbsp;&nbsp;Total debt | 1016.8 | 1097.1 | 921.5 |
| Less: current maturities and short-term borrowings |  | 20.0 |  |
| Long-term debt, less current portion | $1016.8 | $1077.1 | $921.5 |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

As of May 1, 2026, principal payments required on the company's outstanding indebtedness, based on the maturity dates defined within the company's debt arrangements, for the remainder of fiscal 2026 and succeeding fiscal years are as follows:

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| | |
|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** |
| 2026 (remaining) | $— |
| 2027 | 100.0 |
| 2028 | 20.0 |
| 2029 | 375.0 |
| 2030 |  |
| 2031 | 100.0 |
| Thereafter | 425.0 |
| Total principal payments required | $1020.0 |

---

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| | |
|:---|:---|
| **7** | **Inventories, Net** |

---

The company uses a combination of inventory valuation methods. Inventories are valued at the lower of cost or net realizable value, with cost determined by the first-in, first-out ("FIFO") and average cost methods for certain of the company's inventories. All remaining inventories are valued at the lower of cost or market, with cost determined under the last-in, first-out ("LIFO") method. As needed, the company records an inventory valuation adjustment for excess, slow-moving, and obsolete inventory that is equal to the excess of the cost of the inventory over the estimated net realizable value or market value for the inventory depending on the inventory costing method. Such inventory valuation adjustment is based on a review and comparison of current inventory levels to planned production, as well as planned and historical sales of the inventory. The inventory valuation adjustment to net realizable value or market value establishes a new cost basis of the inventory that cannot be subsequently reversed.

On December 8, 2025, with the acquisition of Tornado Infrastructure Equipment, the company acquired $35.9 million of inventory, based on preliminary fair value purchase accounting adjustments. For additional information on the company's acquisition of Tornado Infrastructure Equipment, refer to Note 2, *Acquisitions and Divestitures*.

Inventories, net were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Raw materials and work in process | $398.7 | $394.6 | $353.1 |
| Finished goods and service parts | 742.4 | 898.6 | 785.4 |
| &nbsp;&nbsp;&nbsp;Total FIFO and average cost value | 1141.1 | 1293.2 | 1138.5 |
| Excess of FIFO over LIFO cost | 217.7 | 173.4 | 217.7 |
| Total inventories, net | $923.4 | $1119.8 | $920.8 |

---

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| | |
|:---|:---|
| **8** | **Property, Plant, and Equipment, Net** |

---

Property, plant, and equipment assets are carried at cost less accumulated depreciation. The company generally accounts for depreciation of property, plant, and equipment utilizing the straight-line method over the estimated useful lives of the assets. Buildings and leasehold improvements are generally depreciated over 10 to 40 years, machinery and equipment are generally depreciated over three to 15 years, tooling is generally depreciated over three to five years, and computer hardware and software and website development costs are generally depreciated over two to five years. Expenditures for major renewals and improvements, which substantially increase the useful lives of existing assets, are capitalized. Costs associated with general maintenance and repairs are expensed as incurred within cost of sales or selling, general and administrative expense in the Condensed Consolidated Statements of Earnings depending on the nature and use of the related asset. Interest is capitalized during the construction period for significant capital projects.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

On December 8, 2025, with the acquisition of Tornado Infrastructure Equipment, the company acquired $14.8 million of property, plant, and equipment based on preliminary fair value purchase accounting adjustments. For additional information on the company's acquisition of Tornado Infrastructure Equipment, refer to Note 2, *Acquisitions and Divestitures.*

Property, plant, and equipment, net was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Land and land improvements | $80.5 | $73.5 | $78.3 |
| Buildings and leasehold improvements | 438.2 | 373.1 | 414.4 |
| Machinery and equipment | 704.9 | 677.3 | 715.6 |
| Tooling | 253.2 | 232.8 | 255.1 |
| Computer hardware and software | 108.7 | 99.3 | 108.1 |
| Construction in process | 82.9 | 149.8 | 65.1 |
| &nbsp;&nbsp;&nbsp;Property, plant, and equipment, gross | 1668.4 | 1605.8 | 1636.6 |
| Less: accumulated depreciation | 1045.4 | 970.0 | 1020.8 |
| Property, plant, and equipment, net | $623.0 | $635.8 | $615.8 |

---

During the first quarter of fiscal 2026, the company acquired $19.8 million of property, plant, and equipment through a non-cash investing and financing transaction.

---

| | |
|:---|:---|
| **9** | **Product Warranty Guarantees** |

---

The company's products are warranted to provide assurance that the product will function as expected and to ensure customer confidence in design, workmanship, and overall quality. Standard warranty coverage is generally provided for specified periods of time and on select products' hours of usage and generally covers parts, labor, and other expenses for non-maintenance repairs. In addition to the standard warranties offered by the company on its products, the company also sells separately priced extended warranty coverage on select products for a prescribed period after the original warranty period expires. For additional information on the contract liabilities associated with the company's separately priced extended warranties, refer to Note 4, *Revenue*.

At the time of sale, the company recognizes expense and records an accrual by product line for estimated costs in connection with forecasted future warranty claims. The company's estimate of the cost of future warranty claims is based primarily on the estimated number of products under warranty, historical average costs incurred to service warranty claims, the trend in the historical ratio of claims to sales, and the historical length of time between the sale and resulting warranty claim. The company periodically assesses the adequacy of its warranty accruals based on changes in these factors and records any necessary adjustments if the cost of actual claims experience indicates that adjustments to the company's warranty accrual are necessary. Additionally, from time to time, the company may also establish warranty accruals for its estimate of the costs necessary to settle major rework campaigns on a product-specific basis during the period in which the circumstances giving rise to the major rework campaign become known and when the costs to satisfactorily address the situation are both probable and estimable. The warranty accrual for the cost of a major rework campaign is primarily based on an estimate of the cost to repair each affected unit and the number of affected units expected to be repaired.

The changes in accrued warranties were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Beginning balance | $152.0 | $151.0 | $152.2 | $150.2 |
| Changes in accrual related to warranties issued during the period | 29.1 | 26.6 | 50.6 | 44.9 |
| Payments made during the period | (22.7) | (22.1) | (44.7) | (40.9) |
| Changes in accrual related to pre-existing warranties | 6.1 | 0.3 | 6.4 | 1.6 |
| Ending balance | $164.5 | $155.8 | $164.5 | $155.8 |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

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| | |
|:---|:---|
| **10** | **Investment in Joint Venture** |

---

The company is party to a joint venture with Huntington Distribution Finance, Inc. ("HDF"), a subsidiary of The Huntington National Bank, established as Red Iron Acceptance, LLC ("Red Iron"), the primary purpose of which is to provide customer inventory financing to certain distributors and dealers of certain of the company's products in the U.S. The company has also entered into a limited inventory repurchase agreement with Red Iron. For additional information regarding the customer financing aspect of the arrangement, as well as the limited inventory purchase agreement, refer to Note 14, *Commitments and Contingencies*.

The company owns 45 percent of Red Iron and HDF owns 55 percent of Red Iron. The company accounts for its investment in Red Iron under the equity method of accounting. The company and HDF each contributed a specified amount of the estimated cash required to enable Red Iron to purchase the company's floor plan financing receivables and to provide financial support for Red Iron's floor plan financing programs. Red Iron borrows the remaining requisite estimated cash utilizing an $1,350.0 million secured revolving credit facility established under a credit agreement between Red Iron and HDF. The company's total investment in Red Iron as of May 1, 2026, May 2, 2025 and October 31, 2025 was $45.0 million, $51.2 million, and $41.0 million, respectively. The company has not guaranteed the outstanding indebtedness of Red Iron.

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| | |
|:---|:---|
| **11** | **Stock-Based Compensation** |

---

Compensation costs related to stock-based compensation awards were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Stock option awards | $1.2 | $2.6 | $2.6 | $4.3 |
| Performance share awards | 1.6 | 1.1 | 2.8 | 1.7 |
| Restricted stock unit awards | 3.8 | 1.7 | 6.4 | 3.1 |
| Unrestricted common stock awards |  |  | 0.7 | 0.7 |
| Total compensation cost for stock-based compensation awards | $6.6 | $5.4 | $12.5 | $9.8 |

---

On March 17, 2026, the company's shareholders approved The Toro Company 2026 Equity Plan (the "2026 plan"), which became effective immediately and replaced The Toro Company 2022 Equity and Incentive Plan (the "2022 plan"). The 2026 plan is administered by the Compensation & Human Resources Committee of the Board and permits the grant of nonqualified and incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other stock-based awards to eligible individuals. Subject to adjustment as provided in the 2026 plan, the maximum aggregate number of shares of the company's common stock authorized for issuance under the 2026 plan is equal to the sum of: (a) 3,650,000 shares, plus (b) the number of shares remaining available for grant under the 2022 plan but not subject to outstanding awards thereunder as of March 17, 2026, and plus (c) the number of shares subject to awards outstanding under the 2022 plan as of March 17, 2026 but only to the extent that such outstanding awards are forfeited, expire or otherwise terminate without the issuance of such shares.

***Stock Option Awards***

Stock options are granted with an exercise price equal to the closing price of the company's common stock on the date of grant, as reported by the New York Stock Exchange. Options are generally granted to executive officers, other employees, and non-employee members of the company's Board of Directors ("Board") on an annual basis in the first quarter of the company's fiscal year but may also be granted throughout the fiscal year in connection with hiring, mid-year promotions, leadership transition, or retention, as needed and applicable. Options generally vest one-third each year over a three-year period and have a ten-year term but in certain circumstances, the vesting requirement may be modified such that options granted to certain employees vest in full on the three-year anniversary of the date of grant and have a ten-year term. Compensation cost equal to the grant date fair value determined under the Black-Scholes valuation method is generally recognized for these awards over the vesting period. Compensation cost recognized for other employees not considered executive officers and non-employee Board members is net of estimated forfeitures, which are determined at the time of grant based on historical forfeiture experience. Stock options granted to executive officers and other employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the company's stock-based compensation plans. In that case, the fair value of the options is expensed in the fiscal year of grant because generally, if the option holder is employed as of the end of the fiscal year in which the options are granted, such options will not be forfeited but continue to vest according to their schedule following retirement. Similarly, if a non-employee Board member has served on the company's Board for ten full fiscal years or more, the awards will not be forfeited but continue to vest according to their schedule following retirement. Therefore, the fair value of the options granted is fully expensed on the date of the grant.

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The fair value of each stock option is estimated on the date of grant using various inputs and assumptions under the Black-Scholes valuation method. The expected life is a significant assumption as it determines the period for which the risk-free interest rate, stock price volatility, and dividend yield must be applied. The expected life is the average length of time in which executive officers, other employees, and non-employee Board members are expected to exercise their stock options, which is primarily based on historical exercise experience. The company groups executive officers and non-employee Board members for valuation purposes based on similar historical exercise behavior. Expected stock price volatility is based on the daily movement of the company's common stock over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate over the expected life at the time of grant. The expected dividend yield is estimated over the expected life based on the company's historical cash dividends paid, expected future cash dividends and dividend yield, and expected changes in the company's stock price.

The table below illustrates the weighted-average valuation assumptions used under the Black-Scholes valuation method for options granted in the first six months of the following fiscal periods:

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| | | |
|:---|:---|:---|
| | **Fiscal 2026** | **Fiscal 2025** |
| Expected life of option in years | 6.90 | 6.42 |
| Expected stock price volatility | 28.84% | 28.08% |
| Risk-free interest rate | 3.91% | 4.47% |
| Expected dividend yield | 1.41% | 1.43% |
| Per share weighted-average fair value at date of grant | $25.35 | $25.53 |

---

***Performance Share Awards***

The company grants performance share awards to executive officers and other employees under which they are entitled to receive shares of the company's common stock contingent on the achievement of performance goals of the company, which are generally measured over a three-year period. The number of shares of common stock a participant receives can be increased (up to 200 percent of target levels) or reduced (down to zero) based on the level of achievement of performance goals and will vest at the end of a three-year period. Performance share awards are generally granted on an annual basis in the first quarter of the company's fiscal year but may also be granted throughout the fiscal year in connection with hiring, mid-year promotions, leadership transition, or retention, as needed and applicable. Compensation cost is recognized for these awards on a straight-line basis over the vesting period based on the per share fair value, which is equal to the closing price of the company's common stock on the date of grant, and the probability of achieving each performance goal. The per share weighted-average fair value of performance share awards granted during the first six months of fiscal 2026 and 2025 was $78.47 and $80.05, respectively.

***Restricted Stock Unit Awards***

Restricted stock unit awards are generally granted to executive officers and other employees. Occasionally, restricted stock unit awards may be granted in connection with hiring, mid-year promotions, leadership transition, or retention. Restricted stock unit awards generally vest one-third each year over a three-year period, or vest in full on the three-year anniversary of the date of grant. Compensation cost equal to the grant date fair value, net of estimated forfeitures, is recognized for these awards over the vesting period. The grant date fair value is equal to the closing price of the company's common stock on the date of grant multiplied by the number of shares subject to the restricted stock unit awards and estimated forfeitures are determined on the grant date based on historical forfeiture experience. The per share weighted-average fair value of restricted stock unit awards granted during the first six months of fiscal 2026 and 2025 was $78.88 and $78.48, respectively.

***Unrestricted Common Stock Awards***

During the first six months of fiscal 2026 and 2025, 9,880 and 8,808 shares, respectively, of fully vested unrestricted common stock awards were granted to certain Board members as a component of their compensation for their service on the Board and were recorded within selling, general and administrative expense in the Condensed Consolidated Statements of Earnings. Additionally, the company's Board members may elect to convert a portion or all of their calendar year annual retainers otherwise payable in cash into shares of the company's common stock. No shares of fully vested unrestricted common stock awards were granted during the second quarter of fiscal 2026 and 2025.

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| | |
|:---|:---|
| **12** | **Stockholders' Equity** |

---

***Accumulated Other Comprehensive Loss***

The components of accumulated other comprehensive loss ("AOCL"), net of tax, within the Condensed Consolidated Statements of Stockholders' Equity were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Foreign currency translation adjustments | $9.0 | $29.0 | $25.4 |
| Pension benefits | 5.1 | 4.3 | 5.1 |
| Cash flow derivative instruments | 5.0 | 8.7 | 4.6 |
| Total accumulated other comprehensive loss | $19.1 | $42.0 | $35.1 |

---

The components and activity of AOCL, net of tax, for the three and six month periods ended May 1, 2026 and May 2, 2025 were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **Foreign <br>Currency<br>Translation<br>Adjustments** | **Pension<br>Benefits** | **Cash Flow Derivative Instruments** | **Total** |
| Balance as of January 30, 2026 | $3.4 | $5.1 | $8.8 | $17.3 |
| Other comprehensive (income) loss before reclassifications | 5.6 |  | (1.2) | 4.4 |
| Amounts reclassified from AOCL |  |  | (2.6) | (2.6) |
| Net current period other comprehensive (income) loss | 5.6 |  | (3.8) | 1.8 |
| Balance as of May 1, 2026 | $9.0 | $5.1 | $5.0 | $19.1 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **Foreign <br>Currency<br>Translation<br>Adjustments** | **Pension<br>Benefits** | **Cash Flow Derivative Instruments** | **Total** |
| Balance as of October 31, 2025 | $25.4 | $5.1 | $4.6 | $35.1 |
| Other comprehensive (income) loss before reclassifications | (16.4) |  | 5.3 | (11.1) |
| Amounts reclassified from AOCL |  |  | (4.9) | (4.9) |
| Net current period other comprehensive (income) loss | (16.4) |  | 0.4 | (16.0) |
| Balance as of May 1, 2026 | $9.0 | $5.1 | $5.0 | $19.1 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **Foreign <br>Currency<br>Translation<br>Adjustments** | **Pension<br>Benefits** | **Cash Flow Derivative Instruments** | **Total** |
| Balance as of January 31, 2025 | $43.8 | $4.3 | $(0.9) | $47.2 |
| Other comprehensive (income) loss before reclassifications | (14.8) |  | 9.9 | (4.9) |
| Amounts reclassified from AOCL |  |  | (0.3) | (0.3) |
| Net current period other comprehensive (income) loss | (14.8) |  | 9.6 | (5.2) |
| Balance as of May 2, 2025 | $29.0 | $4.3 | $8.7 | $42.0 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions)** | **Foreign <br>Currency<br>Translation<br>Adjustments** | **Pension<br>Benefits** | **Cash Flow Derivative Instruments** | **Total** |
| Balance as of October 31, 2024 | $33.9 | $4.3 | $7.8 | $46.0 |
| Other comprehensive (income) loss before reclassifications | (4.9) |  | 2.6 | (2.3) |
| Amounts reclassified from AOCL |  |  | (1.7) | (1.7) |
| Net current period other comprehensive (income) loss | (4.9) |  | 0.9 | (4.0) |
| Balance as of May 2, 2025 | $29.0 | $4.3 | $8.7 | $42.0 |

---

For additional information on the components reclassified from AOCL to the respective line items in net earnings for derivative instruments refer to Note 16, *Derivative Instruments and Hedging Activities*.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

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| | |
|:---|:---|
| **13** | **Per Share Data** |

---

Reconciliation of basic and diluted weighted-average number of shares of common stock outstanding was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Shares in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| *<u>Diluted</u>* |  |  |  |  |
| Weighted-average number of shares of common stock outstanding - Basic | 96.6 | 99.8 | 97.3 | 100.6 |
| Effect of dilutive shares | 0.5 | 0.3 | 0.4 | 0.3 |
| Weighted-average number of shares of common stock outstanding - Diluted | 97.1 | 100.1 | 97.7 | 100.9 |

---

The effect of dilutive shares from stock option awards and restricted stock unit awards is computed under the treasury stock method. Stock option awards to purchase 1,280,471 and 2,580,317 shares of common stock during the second quarter of fiscal 2026 and 2025, respectively, and to purchase 1,893,120 and 2,059,715 shares of common stock during the first six months of fiscal 2026 and 2025, respectively, were excluded from the computation of diluted net earnings per share of common stock because they were anti-dilutive.

---

| | |
|:---|:---|
| **14** | **Commitments and Contingencies** |

---

***Customer Financing Arrangements***

*Inventory Financing*

The company is party to inventory financing arrangements with Red Iron, Huntington Commercial Finance Canada, Inc. ("HCFC"), and other third-party financial institutions (collectively, the "financial institutions") which provide inventory financing to certain dealers and distributors of certain of the company's products in the U.S. and internationally. These financing arrangements are structured as an advance in the form of a payment by the financial institutions to the company on behalf of a distributor or dealer with respect to invoices financed by the financial institution. These payments extinguish the obligation of the dealer or distributor to make payment to the company under the terms of the applicable invoice.

Under separate agreements between the financial institutions and the dealers and distributors, the financial institutions provide loans to the dealers and distributors for the advances paid by the financial institutions to the company. Under these financing arrangements, down payments are not required, and depending on the finance program for each product line, finance charges are incurred by the company, shared between the company and the distributor and/or the dealer, or paid by the distributor or dealer. The financial institutions retain a security interest in the distributors' and dealers' financed inventories and such inventories are monitored regularly through audits. Financing terms to the distributors and dealers require payment as the inventory, which secures the indebtedness, is sold to end-users or when payment otherwise become due under the agreements between the financial institutions and the distributors and dealers, whichever occurs first. Rates are generally indexed to the Secured Overnight Financing Rate ("SOFR"), or an alternative variable rate, plus a fixed percentage that differs based on whether the financing is for a distributor or dealer. Rates may also vary based on the product that is financed.

The net amount of receivables financed for dealers and distributors under this arrangement with Red Iron for the six months ended May 1, 2026 and May 2, 2025 were $1,387.7 million and $1,346.5 million, respectively. The total amount of net receivables outstanding under this arrangement with Red Iron as of May 1, 2026, May 2, 2025, and October 31, 2025 were $902.5 million, $1,021.2 million and $807.6 million, respectively. The total amount of receivables due from Red Iron to the company as of May 1, 2026, May 2, 2025, and October 31, 2025 were $32.3 million, $19.3 million and $21.6 million, respectively.

The net amount of receivables financed for dealers and distributors under the arrangements with HCFC and the other third-party financial institutions for the six months ended May 1, 2026 and May 2, 2025 were $348.3 million and $319.2 million, respectively. As of May 1, 2026, May 2, 2025, and October 31, 2025, $292.1 million, $253.5 million and $308.3 million, respectively, of receivables financed by HCFC and the other third-party financial institutions were outstanding.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

*Inventory Repurchase Agreements*

The company has entered into a limited inventory repurchase agreement with Red Iron and HCFC under which the company has agreed to repurchase certain repossessed products, up to a maximum aggregate amount of $7.5 million in a calendar year. Additionally, as a result of the company's floor plan financing agreements with the other third-party financial institutions, the company also entered into inventory repurchase agreements with the other third-party financial institutions. Under such inventory repurchase agreements, the company has agreed to repurchase products repossessed by the other third-party financial institutions. As of May 1, 2026, May 2, 2025 and October 31, 2025, the company was contingently liable to repurchase up to a maximum amount of $29.8 million, $28.9 million, and $29.0 million, respectively, of inventory related to receivables under these inventory repurchase agreements. The company's financial exposure under these inventory repurchase agreements is limited to the difference between the amount paid to Red Iron, HCFC or other third-party financing institutions for repurchases of inventory and the amount received upon subsequent resale of the repossessed product. The company has repurchased immaterial amounts of inventory pursuant to such arrangements for the six months ended May 1, 2026 and May 2, 2025.

***Supplier Finance Program***

The company has a supply chain finance service agreement with a third-party financial institution to provide a web-based platform that facilitates the ability of participating suppliers to finance payment obligations from the company with the third-party financial institution. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the company prior to their scheduled due dates at a discounted price to the third-party financial institution. The company's obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers' decisions to finance amounts under this supply chain finance arrangement. The company guarantees its payment obligations under the supply chain finance arrangement with the third-party financial institution. The company does not pledge assets as security to the suppliers or the third-party financial institution. As of May 1, 2026, May 2, 2025 and October 31, 2025, $103.0 million, $124.5 million, and $68.8 million, respectively, of the company's outstanding payment obligations were financed by participating suppliers through the third-party financial institution's supply chain finance web-based platform. These obligations are presented within accounts payable in the Condensed Consolidated Balance Sheets.

***Litigation***

From time to time, the company is party to litigation in the ordinary course of business. Such matters are generally subject to uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. Litigation occasionally involves claims for punitive, as well as compensatory, damages arising out of the use of the company's products. Although the company is self-insured to some extent, the company maintains insurance against certain product liability losses. The company is also subject to litigation and administrative and judicial proceedings with respect to claims involving asbestos and the discharge of hazardous substances into the environment. Some of these claims assert damages and liability for personal injury, remedial investigations or clean-up and other costs and damages. The company is also occasionally involved in commercial disputes, employment or employment-related disputes, and patent litigation cases in which it is asserting or defending against patent infringement claims. To prevent possible infringement of the company's patents by others, the company periodically reviews competitors' products. To avoid potential liability with respect to others' patents, the company reviews certain patents issued by the U.S. Patent and Trademark Office and foreign patent offices. The company believes these activities help minimize its risk of being a defendant in patent infringement litigation.

The company records a liability in its Condensed Consolidated Financial Statements for costs related to claims, including future legal costs, settlements, and judgments, where the company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the company's consolidated results of operations, financial position, or cash flows.

In situations where the company receives, or expects to receive, a favorable ruling related to a litigation settlement, the company follows the accounting standards codification guidance for gain contingencies. The company does not allow for the recognition of a gain contingency within its Condensed Consolidated Financial Statements prior to the settlement of the underlying events or contingencies associated with the gain contingency. As a result, the consideration related to a gain contingency is recorded in the Condensed Consolidated Financial Statements during the period in which all underlying events or contingencies are resolved and the gain is realized.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

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| | |
|:---|:---|
| **15** | **Leases** |

---

The company enters into contracts that are, or contain, operating lease agreements for certain property, plant, or equipment assets utilized in the normal course of business, such as buildings for manufacturing facilities, office space, distribution centers, and warehouse facilities; land for product testing sites; machinery and equipment for research and development activities, manufacturing and assembly processes, and administrative tasks; and vehicles for sales, service, marketing, and distribution activities. Contracts that explicitly or implicitly relate to property, plant, and equipment are assessed at inception to determine if the contract is, or contains, a lease. Such contracts for operating lease agreements convey the company's right to direct the use of, and obtain substantially all of the economic benefits from, an identified asset for a defined period of time in exchange for consideration. The lease term begins and is determined upon lease commencement, which is the point in time when the company takes possession of the identified asset, and generally includes all non-cancelable periods. Lease expense for the company's operating leases is recognized on a straight-line basis over the lease term and is recorded within cost of sales or selling, general and administrative expense within the Condensed Consolidated Statements of Earnings as dictated by the nature and use of the underlying asset. The company does not recognize right-of-use assets and lease liabilities, but does recognize expense on a straight-line basis, for short-term operating leases which have a lease term of 12 months or less and do not include an option to purchase the underlying asset.

Lease payments are determined at lease commencement and generally represent fixed lease payments as defined within the respective lease agreement or, in the case of certain lease agreements, variable lease payments that are measured as of the lease commencement date based on the prevailing index or market rate. Future adjustments to variable lease payments are defined and scheduled within the respective lease agreement and are determined based upon the prevailing market or index rate at the time of the adjustment relative to the market or index rate determined at lease commencement. Certain other lease agreements contain variable lease payments that are determined based upon actual utilization of the identified asset. Such future adjustments to variable lease payments and variable lease payments based upon actual utilization of the identified asset are not included within the determination of lease payments at commencement but rather, are recorded as variable lease expense in the period in which the variable lease cost is incurred.

Right-of-use assets represent the company's right to use an underlying asset throughout the lease term and lease liabilities represent the company's obligation to make lease payments arising from the lease agreement. The company accounts for operating lease liabilities at lease commencement and on an ongoing basis as the present value of the minimum remaining lease payments under the respective lease term. Minimum remaining lease payments are generally discounted to present value based the estimated incremental borrowing rate at lease commencement as the rate implicit in the lease is generally not readily determinable. Right-of-use assets are measured as the amount of the corresponding operating lease liability for the respective operating lease agreement, adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs, and impairment of the operating lease right-of-use asset, as applicable.

The following table presents the lease expense incurred on the company's operating, short-term, and variable leases:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Operating lease expense | $7.8 | $9.0 | $15.5 | $17.5 |
| Short-term lease expense | 2.1 | 1.5 | 3.4 | 2.5 |
| Variable lease expense | 0.8 | 0.7 | 1.1 | 0.7 |
| Total lease expense | $10.7 | $11.2 | $20.0 | $20.7 |

---

The following table presents supplemental cash flow information related to the company's operating leases:

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| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** |
| Right-of-use assets obtained in exchange for lease obligations | $12.2 | $7.7 |
| Operating cash flows for amounts included in the measurement of lease liabilities | $14.6 | $14.4 |

---

The following table presents other lease information related to the company's operating leases:

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| | | | |
|:---|:---|:---|:---|
| | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Weighted-average remaining lease term of operating leases in years | 7.7 | 8.7 | 8.1 |
| Weighted-average discount rate of operating leases | 5.21% | 5.06% | 5.04% |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

The following table reconciles the total undiscounted future cash flows based on the anticipated future minimum operating lease payments by fiscal year for the company's operating leases to the present value of operating lease liabilities recorded within the Condensed Consolidated Balance Sheets as of May 1, 2026:

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| | |
|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** |
| 2026 (remaining) | $12.9 |
| 2027 | 24.7 |
| 2028 | 21.4 |
| 2029 | 17.1 |
| 2030 | 13.7 |
| Thereafter | 53.7 |
| Total future minimum operating lease payments | 143.5 |
| &nbsp;&nbsp;&nbsp;Less: imputed interest | 23.3 |
| Present value of operating lease liabilities | $120.2 |

---

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| | |
|:---|:---|
| **16** | **Derivative Instruments and Hedging Activities** |

---

***Risk Management Objective of Using Derivatives***

The company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business, such as sales to third-party customers, sales and loans to wholly-owned foreign subsidiaries, costs associated with foreign plant operations, and purchases from suppliers. The company's primary currency exchange rate exposures are with the Euro, the Australian dollar, the Canadian dollar, the British pound, the Mexican peso, the Japanese yen, the Chinese renminbi, and the Romanian new leu against the U.S. dollar, as well as the Romanian new leu against the Euro.

To reduce its exposure to foreign currency exchange rate risk, the company enters into various derivative instruments to hedge against such risk, authorized under a company policy that places controls on these hedging activities, with counterparties that are highly rated financial institutions. The company's policy does not allow the use of derivative instruments for trading or speculative purposes. The company has also made an accounting policy election to use the portfolio exception with respect to measuring counterparty credit risk for derivative instruments and to measure the fair value of a portfolio of financial assets and financial liabilities on the basis of the net open risk position with each counterparty.

The company's hedging activities primarily involve the use of forward currency contracts to hedge most foreign currency transactions, including forecasted sales and purchases denominated in foreign currencies. The company uses derivative instruments only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations and to minimize earnings and cash flow volatility associated with foreign currency exchange rate fluctuations. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency.

The company recognizes all derivative instruments at fair value on the Condensed Consolidated Balance Sheets as either assets or liabilities. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as a cash flow hedging instrument.

***Cash Flow Hedging Instruments***

The company formally documents relationships between cash flow hedging instruments and the related hedged transactions, as well as its risk-management objective and strategy for undertaking cash flow hedging instruments. This process includes linking all cash flow hedging instruments to the forecasted transactions, such as sales to third-parties and costs associated with foreign plant operations, including purchases from suppliers. At the cash flow hedge's inception and on an ongoing basis, the company formally assesses whether the cash flow hedging instruments have been highly effective in offsetting changes in the cash flows of the hedged transactions and whether those cash flow hedging instruments may be expected to remain highly effective in future periods.

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Changes in the fair values of the spot rate component of outstanding, highly effective cash flow hedging instruments included in the assessment of hedge effectiveness are recorded in other comprehensive income within AOCL on the Condensed Consolidated Balance Sheets and are subsequently reclassified to net earnings within the Condensed Consolidated Statements of Earnings during the same period in which the cash flows of the underlying hedged transaction affect net earnings. Changes in the fair values of hedge components excluded from the assessment of effectiveness are recognized immediately in net earnings under the mark-to-market approach. The classification of gains or losses recognized on cash flow hedging instruments and excluded components within the Condensed Consolidated Statements of Earnings is the same as that of the underlying exposure. Results of cash flow hedging instruments, and the related excluded components, of sales and costs associated with foreign plant operations, including purchases from suppliers, are recorded in net sales and cost of sales, respectively. The maximum amount of time the company hedges its exposure to the variability in future cash flows for forecasted trade sales and purchases is two years.

When it is determined that a derivative instrument is not, or has ceased to be, highly effective as a cash flow hedge, the company discontinues cash flow hedge accounting prospectively. The gain or loss on the dedesignated derivative instrument remains in AOCL and is reclassified to net earnings within the same Condensed Consolidated Statements of Earnings line item as the underlying exposure when the forecasted transaction affects net earnings. When the company discontinues cash flow hedge accounting because it is no longer probable, but it is still reasonably possible that the forecasted transaction will occur by the end of the originally expected period or within an additional two-month period of time thereafter, the gain or loss on the derivative instrument remains in AOCL and is reclassified to net earnings within the same Condensed Consolidated Statements of Earnings line item as the underlying exposure when the forecasted transaction affects net earnings. However, if it is probable that a forecasted transaction will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses that were in AOCL are immediately recognized in net earnings within other income, net in the Condensed Consolidated Statements of Earnings. In all situations in which cash flow hedge accounting is discontinued and the derivative instrument remains outstanding, the company carries the derivative instrument at its fair value on the Condensed Consolidated Balance Sheets, recognizing future changes in the fair value within other income, net in the Condensed Consolidated Statements of Earnings.

As of May 1, 2026, the notional amount outstanding of forward currency contracts designated as cash flow hedging instruments was $371.5 million.

***Derivatives Not Designated as Cash Flow Hedging Instruments***

The company also enters into foreign currency contracts that include forward currency contracts to mitigate the remeasurement of specific assets and liabilities on the Condensed Consolidated Balance Sheets. These contracts are not designated as cash flow hedging instruments. Accordingly, changes in the fair value of hedges of recorded balance sheet positions, such as cash, receivables, payables, intercompany notes, and other various contractual claims to pay or receive foreign currencies other than the functional currency, are recognized immediately in other income, net, on the Condensed Consolidated Statements of Earnings together with the transaction gain or loss from the hedged balance sheet position.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

The following table presents the fair value and location of the company's derivative instruments on the Condensed Consolidated Balance Sheets:

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| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Derivative assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;*Derivatives designated as cash flow hedging instruments:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward currency contracts | $6.1 | $0.1 | $3.6 |
| &nbsp;&nbsp;&nbsp;*Derivatives not designated as cash flow hedging instruments:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward currency contracts | 0.7 | 0.2 | 0.5 |
| Total derivative assets | $6.8 | $0.3 | $4.1 |
| Derivative liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;*Derivatives designated as cash flow hedging instruments:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward currency contracts | $7.1 | $6.7 | $4.3 |
| &nbsp;&nbsp;&nbsp;*Derivatives not designated as cash flow hedging instruments:* |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward currency contracts | 4.0 | 1.7 | 1.3 |
| Total derivative liabilities | $11.1 | $8.4 | $5.6 |

---

The company entered into an International Swap Dealers Association ("ISDA") Master Agreement with each counterparty that permits the net settlement of amounts owed under their respective contracts. The ISDA Master Agreement is an industry standardized contract that governs all derivative contracts entered into between the company and the respective counterparty. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable or receivable for contracts due on the same date or in the same currency for similar types of derivative transactions. The company records the fair value of its derivative instruments at the net amount on its Condensed Consolidated Balance Sheets.

The following table presents the effects of the master netting arrangements on the fair value of the company's derivative instruments that are recorded on the Condensed Consolidated Balance Sheets:

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| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Derivative assets: |  |  |  |
| *Forward currency contracts:* |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross amount of derivative assets | $6.8 | $0.3 | $4.2 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities offsetting derivative assets |  |  | 0.1 |
| Net amount of derivative assets | $6.8 | $0.3 | $4.1 |
| Derivative liabilities: |  |  |  |
| *Forward currency contracts:* |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross amount of derivative liabilities | $11.3 | $9.9 | $6.2 |
| &nbsp;&nbsp;&nbsp;Derivative assets offsetting derivative liabilities | 0.2 | 1.5 | 0.6 |
| Net amount of derivative liabilities | $11.1 | $8.4 | $5.6 |

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

The following table presents the impact and location of the amounts reclassified from AOCL into net earnings on the Condensed Consolidated Statements of Earnings and the impact of derivative instruments on the Condensed Consolidated Statements of Comprehensive Income for the company's derivatives designated as cash flow hedging instruments for the three and six months ended May 1, 2026 and May 2, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **Loss Reclassified from AOCL into Earnings** | **Loss Reclassified from AOCL into Earnings** | **Gain (Loss) Recognized in OCI on Derivatives** | **Gain (Loss) Recognized in OCI on Derivatives** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| *Derivatives designated as cash flow hedging instruments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net sales | $(3.1) | $1.3 | $5.4 | $(13.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of sales | 0.5 | (1.6) | (1.6) | 4.0 |
| Total derivatives designated as cash flow hedging instruments | $(2.6) | $(0.3) | $3.8 | $(9.6) |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
| | **Loss Reclassified from AOCL into Earnings** | **Loss Reclassified from AOCL into Earnings** | **Loss Recognized in OCI on Derivatives** | **Loss Recognized in OCI on Derivatives** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| *Derivatives designated as cash flow hedging instruments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net sales | $(5.4) | $1.5 | $(3.5) | $(5.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of sales | 0.5 | (3.2) | 3.1 | 4.3 |
| Total derivatives designated as cash flow hedging instruments | $(4.9) | $(1.7) | $(0.4) | $(0.9) |

---

The company recognized immaterial gains and losses within other income, net in the Condensed Consolidated Statements of Earnings during the second quarter and first six months of fiscal 2026 and fiscal 2025, respectively, due to the discontinuance of cash flow hedge accounting on certain forward currency contracts designated as cash flow hedging instruments. As of May 1, 2026, the company expects to reclassify approximately $5.4 million of losses from AOCL to earnings during the next twelve months.

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<u>[**Table of Contents**](#i9fc80454db9e4c1fbdc1fc481f42650d_7)</u>

The following tables present the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company's derivatives designated as cash flow hedging instruments and the related components excluded from effectiveness testing:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** |
|<br>**(Dollars in millions)** | **May 1, 2026** | **May 1, 2026** | **May 2, 2025** | **May 2, 2025** |
| **Three Months Ended** | **Net Sales** | **Cost of Sales** | **Net Sales** | **Cost of Sales** |
| Condensed Consolidated Statements of Earnings (Loss) income (expense) amounts in which the effects of cash flow hedging instruments are recorded | $1424.7 | $(942.0) | $1317.9 | $(881.2) |
| *(Loss) gain on derivatives designated as cash flow hedging instruments:* |  |  |  |  |
| &nbsp;&nbsp;Forward currency contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amount of (loss) gain reclassified from AOCL into earnings | (3.1) | 0.5 | 1.3 | (1.6) |
| &nbsp;&nbsp;Gain on components excluded from effectiveness testing recognized in earnings based on changes in fair value | $1.3 | $0.8 | $0.5 | $0.7 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** | **(Loss) Gain Recognized in Earnings on Cash Flow Hedging Instruments** |
|<br>**(Dollars in millions)** | **May 1, 2026** | **May 1, 2026** | **May 2, 2025** | **May 2, 2025** |
| **Six Months Ended** | **Net Sales** | **Cost of Sales** | **Net Sales** | **Cost of Sales** |
| Condensed Consolidated Statements of Earnings income (expense) amounts in which the effects of cash flow hedging instruments are recorded | $2461.0 | $(1641.8) | $2312.9 | $(1540.6) |
| *(Loss) gain on derivatives designated as cash flow hedging instruments:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amount of (loss) gain reclassified from AOCL into earnings | (5.4) | 0.5 | 1.5 | (3.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on components excluded from effectiveness testing recognized in earnings based on changes in fair value | $2.5 | $1.1 | $0.7 | $1.6 |

---

The following table presents the impact and location of derivative instruments on the Condensed Consolidated Statements of Earnings for the company's derivatives not designated as cash flow hedging instruments:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| *Loss on derivatives not designated as cash flow hedging instruments* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other loss, net | $(1.0) | $(4.7) | $(5.6) | $(3.7) |
| Total loss on derivatives not designated as cash flow hedging instruments | $(1.0) | $(4.7) | $(5.6) | $(3.7) |

---

---

| | |
|:---|:---|
| **17** | **Fair Value Measurements** |

---

The company categorizes its assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements. The framework defines fair value, provides guidance for measuring fair value, and requires certain disclosures. The framework discusses valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are defined as follows:

**Level 1**: Unadjusted quoted prices in active markets for identical assets or liabilities.

**Level 2**: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

**Level 3**: Unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability.

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***Recurring Fair Value Measurements***

The company's derivative instruments consist of forward currency contracts that are measured at fair value on a recurring basis. The fair value of such forward currency contracts is determined based on observable market transactions of forward currency prices and spot currency rates as of the reporting date.

The following tables present, by level within the fair value hierarchy, the company's financial assets and liabilities that are measured at fair value on a recurring basis as of May 1, 2026, May 2, 2025, and October 31, 2025, according to the valuation technique utilized to determine their fair values (dollars in millions):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** |
| **May 1, 2026** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts | $6.8 | $— | $6.8 | $— |
| Total assets | $6.8 | $— | $6.8 | $— |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts | $11.1 | $— | $11.1 | $— |
| Total liabilities | $11.1 | $— | $11.1 | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** |
| **May 2, 2025** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts | $0.3 | $— | $0.3 | $— |
| Total assets | $0.3 | $— | $0.3 | $— |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Forward currency contracts | $8.4 | $— | $8.4 | $— |
| Total liabilities | $8.4 | $— | $8.4 | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** | **Fair Value Measurements Using Inputs Considered as:** |
| **October 31, 2025** | **Fair Value** | **Level 1** | **Level 2** | **Level 3** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts | $4.1 | $— | $4.1 | $— |
| Total assets | $4.1 | $— | $4.1 | $— |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Forward currency contracts | $5.6 | $— | $5.6 | $— |
| Total liabilities | $5.6 | $— | $5.6 | $— |

---

***Nonrecurring Fair Value Measurements***

The company measures certain assets and liabilities at fair value on a non-recurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, goodwill, and indefinite-lived intangible assets, which would generally be recorded at fair value as a result of an impairment charge. Assets acquired and liabilities assumed as part of a business combination are also measured at fair value on a non-recurring basis during the measurement period allowed by the accounting standards codification guidance for business combinations when applicable. Alternatively, under a cost accumulation model, the company measures the fair values of net assets acquired as part of an asset acquisition before allocating the cost of the asset acquisition to the net assets acquired on the basis of their relative fair values.

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***Other Fair Value Disclosures***

The carrying values of the company's short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and short-term debt, including current maturities of long-term debt, when applicable, approximate their fair values due to their short-term nature. As of May 1, 2026, May 2, 2025, and October 31, 2025, the company's long-term debt included $724.3 million, $524.3 million, and $724.3 million, respectively, of gross fixed-rate debt that is not subject to variable interest rate fluctuations. The gross fair value of such long-term debt is determined using Level 2 inputs by discounting the projected cash flows based on quoted market rates at which similar amounts of debt could currently be borrowed. As of May 1, 2026, the estimated gross fair value of long-term debt with fixed interest rates was $721.6 million compared to its gross carrying amount of $724.3 million. As of May 2, 2025, the estimated gross fair value of long-term debt with fixed interest rates was $523.0 million compared to its gross carrying amount of $524.3 million. As of October 31, 2025, the estimated gross fair value of long-term debt with fixed interest rates was $733.1 million compared to its gross carrying amount of $724.3 million. For additional information regarding long-term debt with fixed interest rates, refer to Note 6, *Indebtedness.*

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| | |
|:---|:---|
| **18** | **Subsequent Events** |

---

The company has evaluated all subsequent events and concluded that no subsequent events have occurred that would require recognition in the Condensed Consolidated Financial Statements or disclosure in the Notes to the Condensed Consolidated Financial Statements.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our Condensed Consolidated Financial Statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Unless the context indicates otherwise, the terms "company," "TTC," "we," "our," or "us" refer to The Toro Company and its consolidated subsidiaries. This MD&A should be read in conjunction with the MD&A included in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Unless expressly stated otherwise, the comparisons presented in this MD&A refer to the same period in the prior fiscal year. Our MD&A is presented as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Company Overview

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Results of Operations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Business Segments

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Financial Position

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Non-GAAP Financial Measures

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Critical Accounting Policies and Estimates

This discussion contains various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and we refer readers to the section titled "Cautionary Note Regarding Forward-Looking Statements" located at the beginning of this Quarterly Report on Form 10-Q for more information.

**Non-GAAP Financial Measures**

Throughout this MD&A, we have provided financial and liquidity measures that are not calculated or presented in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") ("non-GAAP financial measures," "adjusted" before specified financial measures, and "non-GAAP liquidity measures"), as information supplemental and in addition to the most directly comparable financial measures presented in this Quarterly Report on Form 10-Q that are calculated and presented in accordance with U.S. GAAP. We believe that these non-GAAP financial measures, when considered in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with U.S. GAAP, provide investors with useful supplemental financial information to better understand our core operational performance and cash flows. These non-GAAP financial measures, however, should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the most directly comparable U.S. GAAP financial measures. Reconciliations of non-GAAP financial measures to the most directly comparable reported U.S. GAAP financial measures are included in the section titled "Non-GAAP Financial Measures" within this MD&A.

**COMPANY OVERVIEW**

The Toro Company is in the business of designing, manufacturing, marketing, and selling professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation systems; rental, specialty, and underground construction equipment; and residential yard and snow thrower products. Our purpose is to help our customers enrich the beauty, productivity, and sustainability of the land. Sustainability is integrated into our enterprise strategic priorities of accelerating profitable growth, driving productivity and operational excellence, and empowering our people. Our focus on alternative power, smart connected, and autonomous solutions, as well as our continued efforts to address sustainability-focused matters, are disclosed in our most recent Sustainability Report, which is not incorporated by reference into and does not form any part of this report.

We sell our products worldwide through a network of distributors, dealers, mass retailers, hardware retailers, equipment rental centers, and home centers, as well as online and direct to end-users. We strive to provide innovative, well-built, and dependable products supported by an extensive service network. A significant portion of our net sales has historically been, and we expect will continue to be, attributable to new and enhanced products. We define new products as those introduced in the current and previous two fiscal years. We classify our operations into two reportable business segments: Professional and Residential. Our remaining activities are presented as "Other" due to their insignificance, as described in greater detail within the section titled "Business Segments" in this MD&A.

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**Business Combinations**

***Acquisition of Tornado Infrastructure Equipment Ltd. ("Tornado Infrastructure Equipment")***

On December 8, 2025, we completed the acquisition of Tornado Infrastructure Equipment, a publicly held Canadian company and a manufacturer in the hydrovac excavation solutions industry. Tornado Infrastructure Equipment manufactures hydrovac excavation solutions and industrial equipment solutions for the underground construction, power transmission and energy markets and provides innovative product offerings that broaden and strengthen our Professional segment and expands its dealer network.

The cash consideration, net of cash acquired, was $210.3 million ("purchase price"). The purchase price was funded with borrowings under its existing revolving credit facility. We believe that the information available as of the closing date provides a reasonable basis for estimating fair values of the assets acquired and liabilities assumed; however, we are continuing to finalize these amounts. Thus, the preliminary measurements of the fair values of the assets acquired and liabilities assumed are subject to change as additional information becomes available and as additional analysis is performed. We expect to finalize the preliminary measurements of fair values as soon as practicable, but no later than one year from the closing date of the acquisition, as required. For additional information regarding the Tornado Infrastructure Equipment acquisition, refer to Note 2, Acquisitions and Divestitures in the Notes to Condensed Consolidated Financial Statements included in Part I. Item 1 of this Quarterly Report on Form 10-Q.

**Tariffs**

The tariff environment is complex and evolving. Our business has incurred, and expects to continue to incur, additional costs related to tariffs. We have taken and will continue to take actions to mitigate inflationary pressures caused by tariffs through a combination of targeted price increases, strategic sourcing adjustments, manufacturing and product portfolio optimization, as well as our ongoing efforts to drive sustainable efficiency gains in our operations and administrative structures.

On February 20, 2026, the United States Supreme Court issued a decision invalidating certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). This ruling did not address the availability, timing, or mechanics of any potential refunds of tariffs previously collected.

The U.S. Court of International Trade ("CIT") has issued orders directing the U.S. Customs and Border Protection ("CBP") to refund previously collected IEEPA tariffs. CBP has since launched the Consolidated Administration and Processing of Entries ("CAPE") system which is being deployed in phases to facilitate the submission, validation, and payment of IEEPA tariff refund claims.

There can be no guarantee that any refund, if received, will equal the full amount of IEEPA tariffs paid, and any refund may be subject to further legal, regulatory, or administrative developments. Given these uncertainties, the Company has not recognized any benefit or asset related to potential IEEPA tariff refunds as of May 1, 2026. Based on currently available information, the Company estimates it may be eligible to recover approximately $20 million of IEEPA tariffs paid.

Anticipated IEEPA refunds are expected to substantially offset incremental tariff headwinds associated with changes to tariff regulations enacted in the second quarter of fiscal 2026.

**AMP Initiative**

In the first quarter of fiscal 2024, we launched a significant productivity initiative named AMP, which is a multi-year initiative now on track to achieve at least $125 million of run-rate savings by fiscal 2027, up from the initial program estimate of at least $100 million. The program is driven by sustainable supply-base, design-to-value, route-to-market, and operational efficiency transformation. We expect to reinvest a portion of the savings from this initiative to drive further innovation and growth. As of the second quarter of fiscal 2026, the AMP initiative has delivered cumulative cost savings of $106.8 million and anticipated annualized cost savings of $105.4 million. Refer to the section titled "Non-GAAP Financial Measures" for information about the productivity initiative charges incurred to generate these savings.

**Tax**

On July 4, 2025, U.S tax legislation known as the "One Big Beautiful Bill Act" ("OBBB") was signed into law which made permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025 and other changes to certain U.S. corporate tax provisions, with staggered effective dates beginning this year. While we continue to evaluate the impact of the legislation on our financial position, we do not expect it to have a material impact on our results of operations.

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**RESULTS OF OPERATIONS**

**Overview**

Consolidated net sales for the second quarter of fiscal 2026 were $1,424.7 million, up 8.1 percent compared to $1,317.9 million in the second quarter of fiscal 2025. For the first six months of fiscal 2026, consolidated net sales were $2,461.0 million, up 6.4 percent compared to $2,312.9 million in the second quarter of fiscal 2025.

Professional segment net sales for the second quarter of fiscal 2026 were $1,106.6 million, up 9.1 percent compared to $1,014.1 million in the second quarter of fiscal 2025. For the first six months of fiscal 2026, Professional net sales were $1,930.6 million, an increase of 8.3 percent compared to $1,782.9 million in the second quarter of the prior fiscal year.

Residential segment net sales for the second quarter of fiscal 2026 were $310.4 million, up 4.4 percent compared to $297.4 million in the second quarter of fiscal 2025. For the first six months of fiscal 2026, Residential net sales were $516.4 million, a decrease of 0.4 percent compared to $518.4 million in the second quarter of the prior fiscal year.

Net earnings for the second quarter of fiscal 2026 were $145.4 million, or $1.50 per diluted share, compared to $136.8 million, or $1.37 per diluted share, for the second quarter of fiscal 2025. Net earnings for the first six months of fiscal 2026 were $213.3 million, or $2.18 per diluted share, compared to $189.6 million, or $1.88 per diluted share, in the comparable fiscal 2025 period.

Adjusted net earnings for the second quarter of fiscal 2026 were $155.4 million, or $1.60 per diluted share, compared to $141.8 million, or $1.42 per diluted share, for the second quarter of fiscal 2025. Adjusted net earnings for the first six months of fiscal 2026 were $228.0 million, or $2.33 per diluted share, compared to $207.7 million, or $2.06 per diluted share, in the comparable fiscal 2025 period.

We maintained our tradition of paying quarterly cash dividends and increased our cash dividend for the second quarter of fiscal 2026 by 2.6 percent to $0.39 per share compared to $0.38 per share paid in the second quarter of fiscal 2025. We also repurchased shares of our common stock under our Board authorized stock repurchase program ("stock repurchase program"), thereby reducing our total shares of common stock outstanding. As a result of the combination of quarterly cash dividends and common stock repurchases, we returned $360.9 million of cash to our stockholders during the first six months of fiscal 2026.

Field inventory levels were lower as of the end of the second quarter of fiscal 2026 compared to the end of the second quarter of fiscal 2025 as balances approximate appropriate levels across all product categories.

Our order backlog represents unfulfilled customer orders at a point in time. Our order backlog as of the end of the second quarter of fiscal 2026 was similar to the end of the fourth quarter of fiscal 2025 as backlog has largely normalized.

**Net Sales**

Consolidated net sales for the second quarter of fiscal 2026 were $1,424.7 million, up 8.1 percent compared to $1,317.9 million in the second quarter of fiscal 2025. The increase was primary driven by net price realization, the Tornado acquisition, and higher shipments of both Professional and Residential segment products. For the year-to-date period of 2026, consolidated net sales were $2,461.0 million, up 6.4 percent compared to $2,312.9 million in the second quarter of fiscal 2025. The increase was primarily driven by net price realization, higher shipments of Professional segment products, and the Tornado acquisition, partially offset by lower shipments of Residential segment products.

Net sales in international markets increased by $23.2 million and decreased by $0.7 million for the second quarter and year-to-date periods of fiscal 2026, respectively. The increase for the second quarter comparison was primarily due to higher shipments of Residential and Professional segment products. For the year-to-date period of 2026, net sales outside the US were flat as lower volumes were largely offset by net price realization.

Changes in foreign currency exchange rates resulted in an increase in our net sales of approximately $8.0 million and $12.0 million for the second quarter and year-to-date periods of fiscal 2026, respectively.

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The following table summarizes our results of operations as a percentage of consolidated net sales:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of sales | (66.1) | (66.9) | (66.7) | (66.6) |
| &nbsp;&nbsp;&nbsp;Gross profit | 33.9 | 33.1 | 33.3 | 33.4 |
| Selling, general and administrative expense | (20.2) | (19.8) | (21.8) | (22.5) |
| &nbsp;&nbsp;&nbsp;Operating earnings | 13.7 | 13.3 | 11.5 | 10.9 |
| Interest expense | (1.0) | (1.2) | (1.2) | (1.3) |
| Other income, net | 0.2 | 0.7 | 0.7 | 0.6 |
| &nbsp;&nbsp;&nbsp;Earnings before income taxes | 12.9 | 12.8 | 11.0 | 10.2 |
| Income tax provision | (2.7) | (2.4) | (2.3) | (2.0) |
| &nbsp;&nbsp;&nbsp;Net earnings | 10.2% | 10.4% | 8.7% | 8.2% |

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**Gross Profit and Gross Margin**

Gross profit for the second quarter of fiscal 2026 was $482.7 million, up 10.5 percent compared to $436.7 million for the second quarter of fiscal 2025. Gross margin was 33.9 percent for the second quarter of fiscal 2026 compared to 33.1 percent for the second quarter of fiscal 2025, an increase of 80 basis points. The increase in gross margin for the second quarter comparison was primarily due to net price realization and productivity improvements, partially offset by higher material, manufacturing, and freight costs, as well as product mix. Gross profit for the year-to-date period of fiscal 2026 was $819.2 million, up 6.1 percent compared to $772.3 million for the same period of fiscal 2025. Gross margin was 33.3 percent for the year-to-date period of fiscal 2026 compared to 33.4 percent for the prior year comparable period, a decrease of (10) basis points. The decrease in gross margin for the year-to-date comparison was primarily due to higher material, manufacturing, and freight costs and product mix, mostly offset by net price realization and productivity improvements.

**Selling, General, and Administrative ("SG&A") Expense**

SG&A expense increased $25.8 million, or 9.9 percent, for the second quarter of fiscal 2026 and increased $17.4 million, or 3.3 percent, for the year-to-date period of fiscal 2026 compared to the same respective periods of fiscal 2025. As a percentage of net sales, SG&A expense increased 40 basis points for the second quarter of fiscal 2026 and decreased 70 basis points for the year-to-date period of fiscal 2026 compared to the same respective periods of fiscal 2025. The increase in SG&A expense as a percentage of net sales for the second quarter was primarily due to higher warranty and incentive expenses, partially offset by net sales leverage and lower warehousing costs. The decrease in the year-to-date comparison was primarily due to net sales leverage, lower warehousing costs, and cost savings measures, partially offset by higher warranty and incentive expenses.

**Interest Expense**

Interest expense decreased $1.0 million and $1.8 million for the second quarter and year-to-date periods of fiscal 2026, respectively, compared to the same respective periods of fiscal 2025. The decreases in interest expense for the second quarter and year-to-date comparisons were primarily due to lower average interest rates and lower average outstanding borrowings.

**Other Income, Net**

Other income, net decreased $6.5 million and increased $4.2 million for the second quarter and year-to-date periods of fiscal 2026, respectively, compared to the same respective periods of fiscal 2025. The decrease in other income, net for the second quarter comparison was primarily due to facility exit charges, a less favorable net impact from foreign currency and derivative instruments, and lower income from our Red Iron joint venture. The increase in other income, net for the year-to-date comparison was primarily due to net gains on facility exits, partially offset by lower income from our Red Iron joint venture.

**Income Tax Provision**

The effective tax rate for the second quarter and year-to date periods of fiscal 2026 was 20.7 percent and 21.1 percent, respectively, compared to 18.9 percent and 19.3 percent, respectively, in the second quarter of fiscal 2025, primarily due to a less favorable geographic mix of earnings. The adjusted effective tax rate for the second quarter and year to date periods of fiscal 2026 was 21.7 percent and 21.6 percent, respectively, compared to an adjusted effective tax rate of 18.7 percent and 19.2 percent, respectively, in the second quarter of fiscal 2025, primarily driven by a less favorable geographic mix of earnings.

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**Net Earnings**

Net earnings for the second quarter of fiscal 2026 were $145.4 million, or $1.50 per diluted share, compared to $136.8 million, or $1.37 per diluted share, for the second quarter of fiscal 2025. Adjusted net earnings for the second quarter of fiscal 2026 were $155.4 million, or $1.60 per diluted share, compared to $141.8 million, or $1.42 per diluted share, for the second quarter of fiscal 2025, an increase of 12.7 percent per diluted share. The increase in net earnings per diluted share for the second quarter comparison was primarily due to higher Professional and Residential segment earnings, partially offset by higher corporate expenses and higher productivity initiative charges. Net earnings for the first six months of fiscal 2026 were $213.3 million, or $2.18 per diluted share, compared to $189.6 million, or $1.88 per diluted share, for the same period of fiscal 2025. Adjusted net earnings for the first six months of fiscal 2026 were $228.0 million, or $2.33 per diluted share, compared to $207.7 million, or $2.06 per diluted share, for the same year-to-date period of fiscal 2025, an increase of 13.1% per diluted share. The increase in net earnings per diluted share for the second quarter comparison was primarily due to higher Professional and Residential segment earnings.

**BUSINESS SEGMENTS**

As more fully described in Note 3, *Segment Data*, of the Notes to the Condensed Consolidated Financial Statements, we operate in two reportable business segments: Professional and Residential. Segment earnings (loss) before interest and taxes ("EBIT") for our Professional and Residential reportable segments are defined as earnings from operations plus other income, net. Our remaining activities consisting of a wholly-owned domestic distribution company, Red Iron joint venture, certain corporate activities, impairment charges, and the elimination of intersegment revenues and expenses, are presented as "Other" due to their insignificance. Corporate activities include general corporate expenditures, such as finance, human resources, legal, information technology, public relations, business development, and similar activities, productivity initiative charges, and other unallocated corporate assets and liabilities, such as corporate facilities and deferred tax assets and liabilities. The following tables summarize net sales for our reportable business segments and Other activities:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **Dollar Value Change** | **Percentage Change** |
| Professional | $1106.6 | $1014.1 | $92.5 | 9.1% |
| Residential | 310.4 | 297.4 | $13.0 | 4.4 |
| Other | 7.7 | 6.4 | 1.3 | 20.3 |
| &nbsp;&nbsp;Total net sales\* | $1424.7 | $1317.9 | $106.8 | 8.1% |
| \*Includes international net sales of: | $278.8 | $255.6 | $23.2 | 9.1% |

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **Dollar Value Change** | **Percentage Change** |
| Professional | $1930.6 | $1782.9 | $147.7 | 8.3% |
| Residential | 516.4 | 518.4 | (2.0) | (0.4) |
| Other | 14.0 | 11.6 | 2.4 | 20.7 |
| &nbsp;&nbsp;&nbsp;Total net sales\* | $2461.0 | $2312.9 | $148.1 | 6.4% |
| \*Includes international net sales of: | $466.3 | $467.0 | $(0.7) | (0.1)% |

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The following tables summarize EBIT (Loss) for our reportable business segments and Other activities:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **Dollar Value Change** | **Percentage Change** |
| Professional | $224.4 | $202.1 | $22.3 | 11.0% |
| Residential | 30.3 | 16.1 | $14.2 | 88.2 |
| Other | (56.5) | (33.7) | (22.8) | (67.7) |
| &nbsp;&nbsp;Total segment EBIT<sup>1</sup> | $198.2 | $184.5 | $13.7 | 7.4% |

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **Dollar Value Change** | **Percentage Change** |
| Professional | $362.0 | $329.3 | $32.7 | 9.9% |
| Residential | 43.5 | 33.3 | 10.2 | 30.6 |
| Other | (106.2) | (97.0) | (9.2) | (9.5) |
| &nbsp;&nbsp;Total segment EBIT<sup>1</sup> | $299.3 | $265.6 | $33.7 | 12.7% |

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<sup>1</sup> Presentation of EBIT (Loss) for the second quarter of fiscal 2025 has been conformed to the current year presentation.

**Professional Segment**

***Segment Net Sales***

Worldwide net sales for our Professional segment for the second quarter of fiscal 2026 increased 9.1 percent compared to the second quarter of fiscal 2025. This increase was driven primarily by net price realization, the Tornado acquisition, and higher shipments of underground construction equipment and zero-turn mowers. Worldwide net sales for our Professional segment for the year-to-date period of fiscal 2026 increased 8.3 percent compared to the same period of fiscal 2025. This increase was driven primarily by net price realization, the Tornado acquisition and higher shipments of underground construction equipment, zero-turn mowers, and snow and ice management products.

***Segment EBIT***

Professional segment EBIT for the second quarter of fiscal 2026 increased 11.0 percent compared to the second quarter of fiscal 2025, and Professional segment earnings margin increased to 20.3 percent from 19.9 percent in the second quarter of fiscal 2025. The increase in Professional segment earnings margin was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by product mix and higher material, manufacturing, and freight costs. Professional segment EBIT for the year-to-date period of fiscal 2026 increased 9.9 percent compared to the same period of fiscal 2025, and Professional segment margin increased to 18.8 percent from 18.5 percent for the year-to-date period of fiscal 2025. The increase in Professional segment earnings margin was primarily due to net price realization, productivity improvements, and net sales leverage, partially offset by product mix and higher material, manufacturing, and freight costs.

**Residential Segment**

***Segment Net Sales***

Worldwide net sales for our Residential segment for the second quarter of fiscal 2026 increased 4.4 percent compared to the second quarter of fiscal 2025. The increase in Residential segment net sales was primarily driven by net price realization and higher shipments of zero-turn mowers, partially offset by lower shipments of snow products. Worldwide net sales for our Residential segment for the year-to-date period of fiscal 2026 decreased (0.4) percent compared to the same period of fiscal 2025. The decrease in Residential segment net sales was primarily driven by lower shipments of turf products, partially offset by higher shipments of snow products and net price realization.

***Segment EBIT***

Residential segment EBIT for the second quarter of fiscal 2026 increased 88.2 percent compared to the second quarter of fiscal 2025, and Residential segment earnings margin increased to 9.8 percent from 5.4 percent in the second quarter of fiscal 2025. The increase in Residential segment earnings margin for the second quarter of fiscal 2026 was largely driven by net price realization, productivity improvements, prior year inventory valuation adjustments that did not recur, cost savings measures, and net sales leverage, partially offset by higher material, manufacturing, and freight costs. Residential segment EBIT for the year-to-date period of fiscal 2026 increased 30.6 percent compared to the same period of fiscal 2025, and Residential segment earnings margin increased to 8.4 percent from 6.4 percent in the year-to-date period of fiscal 2025. The increase in Residential segment earnings margin for the year-to-date period of fiscal 2026 was largely driven by net price realization, productivity improvements, cost savings measures, and product mix, partially offset by higher material, manufacturing, and freight costs.

**Other Activities**

***Other Net Sales***

Net sales for our Other activities includes sales from our wholly-owned domestic distribution company net of intersegment sales from the Professional and Residential segments to the distribution company. Net sales for our Other activities in the second quarter of fiscal 2026 increased by $1.3 million compared to the second quarter of fiscal 2025. Net sales for our Other activities in the year-to-date period of fiscal 2026 increased by $2.4 million compared to the same period in fiscal 2025.

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***Other EBIT (loss)***

The operating loss for our Other activities for the second quarter of fiscal 2026 increased $22.8 million compared to the second quarter of fiscal 2025, primarily due to higher corporate expenses, higher productivity initiative charges, and lower other income, partially offset by lower interest expense. The operating loss of our Other Activities for the year-to-date period of fiscal 2026 increased $9.2 million compared to same period in fiscal 2025, primarily due to higher corporate expenses and lower other income, partially offset by lower interest expense and lower productivity initiative charges.

**FINANCIAL POSITION**

**Working Capital**

Our ongoing goal is to maintain requisite inventory levels to meet our anticipated production requirements, avoid manufacturing delays, and meet the demand for our products, as well as working to ensure service parts availability for our customers. Accounts receivable as of the end of the second quarter of fiscal 2026 decreased $27.4 million, or 4.5 percent, compared to the end of the second quarter of fiscal 2025, primarily driven by timing of shipments. Inventory levels were down $196.4 million, or 17.5 percent, as of the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, primarily driven by lower finished goods balances, primarily related to strong early spring season demand for landscape equipment by both homeowners and contractors. Accounts payable increased $35.8 million, or 6.9 percent, as of the end of the second quarter of fiscal 2026 compared to the end of the second quarter of fiscal 2025, primarily due to higher purchases.

**Cash Flows**

***Cash Flows from Operating Activities***

Net cash provided by operating activities for the first six months of fiscal 2026 was $293.5 million compared to $123.1 million for the first six months of fiscal 2025. This change was primarily due to net favorable fluctuations in working capital and higher net earnings.

***Cash Flows from Investing Activities***

Net cash used in investing activities for the first six months of fiscal 2026 was $226.7 million compared to $42.4 million for the first six months of fiscal 2025. This change was primarily due to the Tornado Infrastructure Equipment acquisition in the current year period.

***Cash Flows from Financing Activities***

Net cash used in financing activities for the first six months of fiscal 2026 was $232.4 million compared to $104.9 million for the first six months of fiscal 2025, primarily due to higher common stock repurchases and net lower debt borrowings, partially offset by higher proceeds from the exercise of stock options.

**Liquidity and Capital Resources**

As of May 1, 2026, we had available liquidity of $983.3 million, consisting of cash and cash equivalents of $180.4 million, of which $144.7 million was held by our foreign subsidiaries, and availability under our revolving credit facility of $802.9 million. We believe our current liquidity position, including the funds available through existing, and potential future, financing arrangements and forecasted cash flows from operations will be sufficient to provide the necessary capital resources for our anticipated working capital needs, payroll, and other administrative costs, capital expenditures, lease payments, purchase commitments, contractual obligations, acquisitions, investments, establishment of new facilities, expansion and renovation of existing facilities, financing receivables from customers that are not financed with Red Iron or other third-party financial institutions, contingent consideration payments, debt repayments, interest payments, quarterly cash dividend payments, and common stock repurchases, all as applicable, for at least the next twelve months.

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***Indebtedness***

Our debt arrangements are described in further detail in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. The following is a summary of our indebtedness:

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| | | | |
|:---|:---|:---|:---|
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** | **October 31, 2025** |
| Revolving credit facility, due October 2029 | $95.0 | $175.0 | $— |
| Term loan, due October 2029 | 200.0 | 200.0 | 200.0 |
| Term loan, due April 2027 |  | 200.0 |  |
| 3.81% series A senior notes, due June 2029 | 100.0 | 100.0 | 100.0 |
| 3.91% series B senior notes, due June 2031 | 100.0 | 100.0 | 100.0 |
| 3.97% senior notes, due June 2032 | 100.0 | 100.0 | 100.0 |
| 5.27% senior notes, due September 2032 | 200.0 |  | 200.0 |
| 7.8% debentures, due June 2027 | 100.0 | 100.0 | 100.0 |
| 6.625% senior notes, due May 2037 | 124.3 | 124.3 | 124.3 |
| Less: unamortized debt issuance costs | 2.5 | 2.2 | 2.8 |
| &nbsp;&nbsp;Total debt | 1016.8 | 1097.1 | 921.5 |
| Less: current maturities and short-term borrowings |  | 20.0 |  |
| Long-term debt, less current portion | $1016.8 | $1077.1 | $921.5 |

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From time to time, we may seek to refinance existing debt and incur additional indebtedness depending on our capital requirements and the availability and cost of financing.

As of May 1, 2026, we had $95.0 million outstanding borrowings under our revolving credit facility and $2.1 million outstanding under the sublimit for standby letters of credit, which resulted in $802.9 million of unutilized availability under our revolving credit facility's $900 million borrowing capacity.

We are in compliance with our debt covenants and other requirements of our revolving credit facility and term loan credit agreements, indentures, and private placement note purchase agreements.

**Cash Dividends**

Our Board of Directors approved a cash dividend of $0.39 per share for the second quarter of fiscal 2026 that was paid on April 13, 2026. This was an increase of 2.6 percent over our cash dividend of $0.38 per share for the second quarter of fiscal 2025. We expect to continue paying our quarterly cash dividend to stockholders for the remainder of fiscal 2026.

**Common Stock Repurchases**

During the first six months of fiscal 2026, we repurchased 3,125,254 shares of our common stock under our stock repurchase program, thereby reducing our total shares of common stock outstanding. As of May 1, 2026, 7,266,536 shares of common stock remained available for repurchase under our stock repurchase program. We expect to continue to repurchase shares of our common stock throughout the remainder of fiscal 2026, depending on our cash balance, debt repayments, market conditions, our anticipated working capital needs, the price of our common stock, investment priorities, and/or other factors.

**Customer Financing Arrangements**

Our customer financing arrangements are described in further detail in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. There have been no material changes to our customer financing arrangements during the first six months of fiscal 2026.

*Inventory Financing*

We are party to inventory financing arrangements with Red Iron, HCFC, and other third-party financial institutions which provide inventory financing to certain dealers and distributors of certain of our products in the U.S. and internationally.

The net amount of receivables financed for dealers and distributors under the arrangement with Red Iron for the six month periods ended May 1, 2026 and May 2, 2025 were $1,387.7 million and $1,346.5 million, respectively. The total amount of net receivables outstanding under the arrangement with Red Iron as of May 1, 2026, May 2, 2025 and October 31, 2025 were $902.5 million, $1,021.2 million and $807.6 million, respectively. The total amount of receivables due from Red Iron to us as of May 1, 2026, May 2, 2025 and October 31, 2025 were $32.3 million, $19.3 million and $21.6 million, respectively.

The net amount of receivables financed for dealers and distributors under the arrangements with HCFC and the other third-party financial institutions for the six month periods ended May 1, 2026 and May 2, 2025 were $348.3 million and $319.2 million, respectively. The total amount of net receivables outstanding under the arrangements with HCFC and the other third-party financial institutions as of May 1, 2026, May 2, 2025, and October 31, 2025 were $292.1 million, $253.5 million, and $308.3 million, respectively.

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*Inventory Repurchase Agreements*

We have entered into a limited inventory repurchase agreement with Red Iron and HCFC under which we have agreed to repurchase certain repossessed products, up to a maximum aggregate amount of $7.5 million in a calendar year.

Additionally, as a result of our financing agreements with the other third-party financial institutions, we have also entered into inventory repurchase agreements with the other third-party financial institutions. Under such inventory repurchase agreements, we have agreed to repurchase products repossessed by the other third-party financial institutions. As of May 1, 2026, May 2, 2025, and October 31, 2025, we were contingently liable to repurchase up to a maximum amount of $29.8 million, $28.9 million, and $29.0 million, respectively, of inventory related to receivables under these inventory repurchase agreements.

Our financial exposure under these inventory repurchase agreements is limited to the difference between the amount paid to Red Iron, HCFC or other third-party financing institutions for repurchases of inventory and the amount received upon subsequent resale of the repossessed product. We have repurchased immaterial amounts of inventory pursuant to such arrangements for the six months ended May 1, 2026 and May 2, 2025. However, a decline in retail sales or financial difficulties of our distributors or dealers could cause this situation to change and thereby require us to repurchase financed product, which could have an adverse effect on our results of operations, financial position, or cash flows.

**NON-GAAP FINANCIAL MEASURES**

We have provided in this Quarterly Report on Form 10-Q certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures that are calculated and presented in accordance with U.S. GAAP. We use these non-GAAP financial measures in making operating decisions and assessing liquidity because we believe they provide meaningful supplemental information regarding our core operational performance and cash flows, as a measure of our liquidity, and provide us with a better understanding of how to allocate resources to both ongoing and prospective business initiatives. Additionally, these non-GAAP financial measures facilitate our internal comparisons to both our historical operating results and to our competitors' operating results by factoring out potential differences caused by charges and benefits not related to our regular, ongoing business, including, without limitation, certain non-cash, large, and/or unpredictable charges and benefits; acquisitions and dispositions; legal judgments, settlements, or other matters; and tax positions. We believe that these non-GAAP financial measures, when considered in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with U.S. GAAP, provide investors with useful supplemental financial information to better understand our core operational performance and cash flows. These non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the most directly comparable U.S. GAAP financial measures. The non-GAAP financial measures may differ from similar measures used by other companies.

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**Reconciliation of Non-GAAP Financial Measures**

The following table provides a reconciliation of the non-GAAP financial performance measures used in this report to the most directly comparable measures calculated and reported in accordance with U.S. GAAP for the three and six month periods ended May 1, 2026 and May 2, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions, except per share data)** | **May 1, 2026** | **May 2, 2025** | **May 1, 2026** | **May 2, 2025** |
| Gross profit | $482.7 | $436.7 | $819.2 | $772.3 |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 2.4 |  | 4.1 |  |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 7.0 | 3.7 | 15.4 | 7.5 |
| Adjusted gross profit | $492.1 | $440.4 | $838.7 | $779.8 |
| Gross margin | 33.9% | 33.1% | 33.3% | 33.4% |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 0.1% | —% | 0.2% | —% |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 0.5% | 0.3% | 0.6% | 0.3% |
| Adjusted gross margin | 34.5% | 33.4% | 34.1% | 33.7% |
| Operating earnings | $195 | $174.8 | $282.1 | $252.6 |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 3.5 |  | 5.7 |  |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 7.3 | 5.6 | 19.7 | 21.8 |
| Adjusted operating earnings | $205.8 | $180.4 | $307.5 | $274.4 |
| Operating earnings margin | 13.7% | 13.3% | 11.5% | 10.9% |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 0.2% | —% | 0.2% | —% |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 0.5% | 0.4% | 0.8% | 1.0% |
| Adjusted operating earnings margin | 14.4% | 13.7% | 12.5% | 11.9% |
| Earnings before income taxes | $183.4 | $168.7 | $270.3 | $234.8 |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 3.5 |  | 5.7 |  |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 11.5 | 5.7 | 14.9 | 22.2 |
| Adjusted earnings before income taxes | $198.4 | $174.4 | $290.9 | $257.0 |
| Income tax provision | $38 | $31.9 | $57 | $45.2 |
| &nbsp;&nbsp;Acquisition-related costs<sup>1</sup> | 0.7 |  | 1.2 |  |
| &nbsp;&nbsp;Productivity initiative<sup>2</sup> | 2.5 | 0.9 | 3.2 | 4.2 |
| &nbsp;&nbsp;Tax impact of share-based compensation<sup>3</sup> | 1.8 | (0.2) | 1.5 | (0.1) |
| Adjusted income tax provision | $43.0 | $32.6 | $62.9 | $49.3 |
| Net earnings | $145.4 | $136.8 | $213.3 | $189.6 |
| &nbsp;&nbsp;Acquisition-related costs, net of tax<sup>1</sup> | 2.8 |  | 4.5 |  |
| &nbsp;&nbsp;Productivity initiative, net of tax<sup>2</sup> | 9.0 | 4.8 | 11.7 | 18.0 |
| &nbsp;&nbsp;Tax impact of stock-based compensation<sup>3</sup> | (1.8) | 0.2 | (1.5) | 0.1 |
| Adjusted net earnings | $155.4 | $141.8 | $228.0 | $207.7 |
| Net earnings per diluted share | $1.50 | $1.37 | $2.18 | $1.88 |
| &nbsp;&nbsp;Acquisition-related costs, net of tax<sup>1</sup> | 0.03 |  | 0.05 |  |
| &nbsp;&nbsp;Productivity initiative, net of tax<sup>2</sup> | 0.09 | 0.05 | 0.12 | 0.18 |
| &nbsp;&nbsp;Tax impact of stock-based compensation<sup>3</sup> | (0.02) |  | (0.02) |  |
| Adjusted net earnings per diluted share | $1.60 | $1.42 | $2.33 | $2.06 |
| Effective tax rate | 20.7% | 18.9% | 21.1% | 19.3% |
| &nbsp;&nbsp;Productivity initiative<sup>1</sup> | —% | (0.1)% | —% | —% |
| &nbsp;&nbsp;Tax impact of stock-based compensation<sup>3</sup> | 1.0% | (0.1)% | 0.5% | (0.1)% |
| Adjusted effective tax rate | 21.7% | 18.7% | 21.6% | 19.2% |

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<sup>1&nbsp;&nbsp;&nbsp;&nbsp;</sup>On December 8, 2025, we completed the acquisition of Tornado Infrastructure Equipment. For additional information regarding this acquisition, refer to Note 2, *Acquisitions and Divestitures*, within the Notes to Condensed Consolidated Financial Statements included within Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q. Acquisition-related costs for the three and six month periods ended May 1, 2026 represent integration costs and amortization of the backlog intangible asset resulting from purchase accounting adjustments.

<sup>2&nbsp;&nbsp;&nbsp;&nbsp;</sup>In the first quarter of fiscal 2024, we launched a significant productivity initiative named AMP, as discussed in more detail under the heading "Company Overview-AMP Initiative" in this section. We considered the nature, frequency, and scale of this initiative compared to our prior productivity initiatives when determining that the expenses associated with AMP, unlike our prior productivity initiatives, are not common, normal, recurring operating expenses and are not representative of our ongoing business operations. Productivity initiative charges for the three and six month periods ended May 1, 2026 and May 2, 2025 primarily represent facility exit-related costs and gains, severance and termination benefits, compensation for fully-dedicated AMP personnel, third-party consulting costs, and product-line exit costs.

<sup>3&nbsp;&nbsp;&nbsp;&nbsp;</sup>The accounting standards codification guidance governing employee stock-based compensation requires that any excess or deficient tax deduction for stock-based compensation be immediately recorded within income tax expense. Employee stock-based compensation activity, including the exercise of stock options, can be unpredictable and can significantly impact our net earnings, net earnings per diluted share, and effective tax rate. These amounts represent the discrete tax benefits recorded as excess tax deductions for stock-based compensation during the three and six month periods ended May 1, 2026 and May 2, 2025.

**Reconciliation of Non-GAAP Liquidity Measures**

We define free cash flow as net cash provided by operating activities less purchases of property, plant, and equipment. Free cash flow conversion percentage represents free cash flow as a percentage of net earnings. We consider free cash flow and free cash flow conversion percentage to be non-GAAP liquidity measures that provide useful information to management and investors about our ability to convert net earnings into cash resources that can be used to pursue opportunities to enhance stockholder value, fund ongoing and prospective business initiatives, and strengthen our Condensed Consolidated Balance Sheets, after reinvesting in necessary capital expenditures required to maintain and grow our business. The following table provides a reconciliation of non-GAAP free cash flow and free cash flow conversion percentage to net cash provided by operating activities, which is the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, for the six month periods ended May 1, 2026 and May 2, 2025:

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| | | |
|:---|:---|:---|
| | **Six Months Ended** | **Six Months Ended** |
| **(Dollars in millions)** | **May 1, 2026** | **May 2, 2025** |
| Net cash provided by operating activities | $293.5 | $123.1 |
| &nbsp;&nbsp;&nbsp;Less: Purchases of property, plant, and equipment | 28.0 | 38.4 |
| Free cash flow | 265.5 | 84.7 |
| &nbsp;&nbsp;&nbsp;Net earnings | $213.3 | $189.6 |
| Free cash flow conversion percentage | 124.5% | 44.7% |

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**CRITICAL ACCOUNTING POLICIES AND ESTIMATES**

There have been no material changes to our critical accounting policies and estimates since our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", and Part II, Item 8, Note 1, *Summary of Significant Accounting Policies and Related Data*, within our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 for a discussion of our critical accounting policies and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk stemming from changes in foreign currency exchange rates, interest rates, and commodity costs. We are also exposed to equity market risk pertaining to the trading price of our common stock. Changes in these factors could cause fluctuations in our earnings and cash flows. There have been no material changes to the market risk information regarding equity market risk included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk", within our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 for a complete discussion of our market risk. Refer below for further discussion on foreign currency exchange rate risk, interest rate risk, and commodity cost risk.

**Foreign Currency Exchange Rate Risk**

We are exposed to foreign currency exchange rate risk arising from transactions in the normal course of business, such as sales to third-party customers, sales and loans to wholly-owned foreign subsidiaries, costs associated with foreign plant operations, and purchases from suppliers. Our primary foreign currency exchange rate exposures are with the Euro, the Australian dollar, the Canadian dollar, the British pound, the Mexican peso, the Japanese yen, the Chinese renminbi, and the Romanian new leu against the U.S. dollar, as well as the Romanian new leu against the Euro. Because our products are manufactured or sourced primarily from the U.S. and Mexico, a stronger U.S. dollar and Mexican peso generally have a negative impact on our results from operations, while a weaker U.S. dollar and Mexican peso generally have a positive effect.

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To reduce our exposure to foreign currency exchange rate risk, we enter into various derivative instruments to hedge against such risk, authorized under a company policy that places controls on these hedging activities, with counterparties that are highly rated financial institutions. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency. Our worldwide foreign currency exchange rate exposures are reviewed monthly. The gains and losses on our derivative instruments offset the changes in values of the related underlying exposures. Therefore, changes in the values of our derivative instruments are highly correlated with changes in the market values of underlying hedged items both at inception and over the life of the derivative instrument. For additional information regarding our derivative instruments, refer to Note 16, *Derivative Instruments and Hedging Activities*, in our Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The foreign currency exchange contracts in the table below have maturity dates in fiscal 2026 through fiscal 2028. All items are non-trading and stated in U.S. dollars. As of May 1, 2026, the average contracted rate, notional amount, fair value, and the gain (loss) at fair value of outstanding derivative instruments were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| **(Dollars in millions, except average contracted rate)** | **Average Contracted Rate** | **Notional Amount** | **Fair Value** | **Gain (Loss) at Fair Value** |
| Buy U.S. dollar/Sell Australian dollar | 0.6625 | $94.7 | $88.6 | $(6.1) |
| Buy U.S. dollar/Sell Canadian dollar | 1.3599 | 50.4 | 50.2 | (0.2) |
| Buy U.S. dollar/Sell Euro | 1.1630 | 225.8 | 222.3 | (3.5) |
| Buy U.S. dollar/Sell British pound | 1.3164 | 68.7 | 67.4 | (1.3) |
| Buy Mexican peso/Sell U.S. dollar | 20.0063 | $63.3 | $70.1 | $6.8 |

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Our net investment in foreign subsidiaries translated into U.S. dollars is not hedged. Any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment, a component of accumulated other comprehensive loss in stockholders' equity on the Condensed Consolidated Balance Sheets, and would not impact net earnings.

**Interest Rate Risk**

Our interest rate risk relates primarily to fluctuations in variable interest rates on our revolving credit facility and term loan credit agreements, as well as the potential increase in the fair value of our fixed-rate long-term debt resulting from a potential decrease in interest rates. We generally do not use interest rate swaps to mitigate the impact of fluctuations in interest rates. We have no earnings or cash flow exposure due to interest rate risks on our fixed-rate long-term debt obligations. Our indebtedness as of May 1, 2026 includes $724.3 million of gross fixed-rate long-term debt that is not subject to variable interest rate fluctuations, $200.0 million of gross variable rate debt under our term loan credit agreements, and $95.0 million outstanding under our variable rate revolving credit facility.

**Commodity Cost Risk**

Most of the commodities, components, parts, and accessories used in our manufacturing process and end-products, or to be sold as standalone end-products, are exposed to commodity cost changes. These changes may be affected by several factors, including, for example, supply; demand; inflation; deflation; changing prices; foreign currency fluctuations; tariffs; duties; trade regulatory actions; industry actions; the current conflict in the Middle East region; and changes to international trade policies, agreements, and/or regulation and competitor activity, including antidumping and countervailing duties on certain products imported from foreign countries, such as certain engines imported into the U.S. from China.

Our primary cost exposures for commodities, components, parts, and accessories used in our products are with steel, aluminum, petroleum, and natural gas-based resins, linerboard, copper, lead, rubber, engines, transmissions, transaxles, hydraulics, electrification components, and others. Our largest spend categories for commodities, components, parts, and accessories are generally steel, engines, hydraulic components, transmissions, resin, aluminum, and electrification components, all of which we purchase from several suppliers around the world. We generally purchase commodities, components, parts, and accessories based upon market prices that are established with suppliers as part of the purchase process and generally attempt to obtain firm pricing from most of our suppliers for volumes consistent with planned production and estimates of wholesale and retail demand for our products.

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In any given period, we strategically attempt to mitigate potential unfavorable impact as a result of changes to the cost of commodities, components, parts, and accessories that affect our product lines through our productivity initiatives; however, our productivity initiatives may not be as effective as anticipated depending on macroeconomic cost trends for commodities, components, parts, and accessories costs and/or other factors. Our productivity initiatives include, but are not limited to, collaborating with suppliers, reviewing alternative sourcing options, substituting materials, SKU rationalization, utilizing Lean methods, engaging in internal cost reduction efforts, and utilizing tariff exclusions and duty drawback mechanisms, all as appropriate. When appropriate, we may also increase prices on some of our products to offset changes in the cost of commodities, components, parts, and accessories. To the extent that commodity and component costs increase and we do not have firm pricing from our suppliers, or our suppliers are not able to honor such prices, and/or our productivity initiatives and/or product price increases are less effective than anticipated and/or do not fully offset cost increases, we may experience a decline in our gross margins.

ITEM 4. CONTROLS AND PROCEDURES

**Evaluation of Disclosure Controls and Procedures**

We maintain disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we are required to apply our judgment in evaluating the cost-benefit relationship of possible internal controls.

Our management evaluated, with the participation of our Chairman of the Board and Chief Executive Officer and our Vice President and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chairman of the Board and Chief Executive Officer and our Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of such period to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including the Chairman of the Board and Chief Executive Officer and Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

**Changes in Internal Control Over Financial Reporting**

There was no change in our internal control over financial reporting that occurred during the three month period ended May 1, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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**PART II. OTHER INFORMATION**

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to litigation in the ordinary course of business, including claims for punitive, as well as compensatory, damages arising out of the use of our products; litigation and administrative and judicial proceedings with respect to claims involving asbestos and the discharge of hazardous substances into the environment; and commercial disputes, employment and employment-related disputes, and patent litigation cases. For a description of our material legal proceedings, refer to Note 14, *Commitments and Contingencies*, in our Notes to Condensed Consolidated Financial Statements under the heading "Litigation" included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated into this Part II, Item 1 by reference.

ITEM 1A. RISK FACTORS

We are affected by risks specific to us, as well as factors that affect all businesses operating in a global market. The material risk factors known to us that could materially adversely affect our business, reputation, industry, operating results, or financial position or could cause our actual results to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made in this report, are described in our most recently filed Annual Report on Form 10-K, Part I, Item 1A. "Risk Factors." There has been no material change in those risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Periodically, the company's Board of Directors authorizes the repurchase of shares of the company's common stock in open-market or privately negotiated transactions under the company's stock repurchase program. The stock repurchase program has no expiration date but may be terminated by the company's Board of Directors at any time. Shares of the company's common stock surrendered by employees to satisfy minimum tax withholding obligations upon vesting of certain stock-based compensation awards are not a part of the stock repurchase program. The following table sets forth information with respect to shares of the company's common stock repurchased by the company during each of the three fiscal months in the company's second quarter ended May 1, 2026:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares (or Units) Repurchased**<sup>1,2,3</sup> | **Average Price Paid per Share (or Unit)** | **Total Number of Shares (or Units)** <br>**Repurchased As Part of Publicly Announced Plans or Programs**<sup>1,2</sup> | **Maximum Number of Shares (or Units) that May Yet Be Repurchased Under the Plans or Programs**<sup>1,2</sup> |
| January 31, 2026 through February 27, 2026 | 185969 | $96.53 | 185969 | 9074169 |
| February 28, 2026 through April 3, 2026 | 1478856 | 95.46 | 1478856 | 7595313 |
| April 4, 2026 through May 1, 2026 | 329987 | 94.61 | 328777 | 7266536 |
| Total | 1994812 | $95.42 | 1993602 |  |

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<sup>1&nbsp;&nbsp;&nbsp;&nbsp;</sup>On December 10, 2024, the company's Board of Directors authorized the repurchase of up to an additional 4,000,000 shares of common stock under the stock repurchase program. The company repurchased 1,993,602 shares under this tranche of the stock repurchase program during the period indicated above and as a result, 1,266,536 shares remained available to repurchase as of May 1, 2026.

<sup>2&nbsp;&nbsp;&nbsp;&nbsp;</sup>On December 9, 2025, the company's Board of Directors authorized the repurchase of up to an additional 6,000,000 shares of common stock under the stock repurchase program. No shares of common stock were repurchased under this tranche of the stock repurchase program during the time period indicated above.

<sup>3&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes 1,210 shares of the company's common stock repurchased in open-market transactions at an average price of $96.99 per share on behalf of a rabbi trust formed to pay benefit obligations of the company to participants in the company's deferred compensation plans. These 1,210 shares were not repurchased under the stock repurchase program.

ITEM 5. OTHER INFORMATION

**Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications**

During the company's second quarter ended May 1, 2026, none of its directors or "officers" (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of SEC Regulation S-K.

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ITEM 6. EXHIBITS

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| | | |
|:---|:---|:---|
| **(a)** | **Exhibit No.** | **Description** |
|  | **2.1** | <u>[Arrangement Agreement, dated as of October 6, 2025, among The Toro Company, Tornado Acquisition Company ULC, and Tornado Infrastructure Equipment Ltd. (incorporated by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 8, 2025, Commission File No. 1-8649).](https://www.sec.gov/Archives/edgar/data/737758/000162828025044620/cyclonearrangementagreement.htm)</u> |
|  | **3.1 and 4.1** | <u>[Restated Certificate of Incorporation of The Toro Company (incorporated by reference to Exhibit 3.](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex32ttcrestatedcharter2025.htm)[2](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex32ttcrestatedcharter2025.htm)[to Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex32ttcrestatedcharter2025.htm)[March 20, 2026](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex32ttcrestatedcharter2025.htm)[, Commission File No. 1-8649).](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex32ttcrestatedcharter2025.htm)</u> |
|  | **3.2 and 4.2** | <u>[Amended and Restated Bylaws of The Toro Company (incorporated by reference to Exhibit 3.3 to Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on March 20, 2026, Commission File No. 1-8649).](https://www.sec.gov/Archives/edgar/data/737758/000162828026019979/ex33ttcbylawamendmentsasap.htm)</u> |
|  | **31.1** | <u>[Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith).](ttc05012026exhibit311.htm)</u> |
|  | **31.2** | <u>[Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002) (filed herewith).](ttc05012026exhibit312.htm)</u> |
|  | **32** | <u>[Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).](ttc05012026exhibit32.htm)</u> |
|  | **101** | The following financial information from The Toro Company's Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2026, filed with the SEC on June 4, 2026, formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) Condensed Consolidated Statements of Earnings for the three and six month periods ended May 1, 2026 and May 2, 2025, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six month periods ended May 1, 2026 and May 2, 2025, (iii) Condensed Consolidated Balance Sheets as of May 1, 2026, May 2, 2025, and October 31, 2025, (iv) Condensed Consolidated Statement of Cash Flows for the six month periods ended May 1, 2026 and May 2, 2025, (v) Condensed Consolidated Statements of Stockholders' Equity for the three and six month periods ended May 1, 2026 and May 2, 2025, and (vi) Notes to Condensed Consolidated Financial Statements (filed herewith). |
|  | **104** | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

THE TORO COMPANY

(Registrant)

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| | | |
|:---|:---|:---|
| Date: June 4, 2026 | By: | /s/ Angela C. Drake |
|  |  | Angela C. Drake |
|  |  | Vice President and Chief Financial Officer |
|  |  | (duly authorized officer, principal financial officer, and principal accounting officer) |

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## Exhibit 31.1

**Exhibit 31.1**

**Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)**

**(Section 302 of the Sarbanes-Oxley Act of 2002)**

I, Richard M. Olson, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this quarterly report on Form 10-Q of The Toro Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 4, 2026

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| |
|:---|
| /s/ Richard M. Olson |
| Richard M. Olson |
| Chairman of the Board and Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)**

**(Section 302 of the Sarbanes-Oxley Act of 2002)**

I, Angela C. Drake, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this quarterly report on Form 10-Q of The Toro Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 4, 2026

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| |
|:---|
| /s/ Angela C. Drake |
| Angela C. Drake |
| Vice President and Chief Financial Officer |
| (Principal Financial and Accounting Officer) |

---

## Ex-32

**Exhibit 32**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarterly period ended May 1, 2026 of The Toro Company (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Richard M. Olson, Chairman of the Board and Chief Executive Officer of the Company, and Angela C. Drake, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| |
|:---|
| /s/ Richard M. Olson |
| Richard M. Olson |
| Chairman of the Board and Chief Executive Officer |
| Date: June 4, 2026 |
| /s/ Angela C. Drake |
| Angela C. Drake |
| Vice President and Chief Financial Officer |
| Date: June 4, 2026 |

---

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

<br>