TORO CO

We operate in two reportable business segments: Professional and Residential. Segment earnings for our Professional and Residential segments are defined as earnings from operations plus other income, net. Our remaining activities are presented as "Other" due to their insignificance. Operating loss for our Other activities included earnings (loss) from our wholly-owned domestic distribution company, Red Iron joint venture, corporate activities, other income, and interest expense. Corporate activities include general corporate expenditures, such as finance, human resources, legal, information services, public relations, and similar activities, as well as 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:

The following tables summarize segment earnings (loss) for our reportable business segments and operating (loss) for our Other activities:

Professional Segment

Segment Net Sales

Worldwide net sales for our Professional segment for the third quarter of fiscal 2024 decreased 1.7 percent compared to the third quarter of fiscal 2023. This decrease was driven primarily by lower shipments of snow and ice management products, lawn care equipment, and compact utility loaders, partially offset by higher shipments of golf and grounds products and underground construction equipment, along with net price realization. Worldwide net sales for our Professional segment for the year-to-date period of fiscal 2024 decreased 7.1 percent compared to the same period of fiscal 2023. This decrease was driven primarily by lower shipments of zero-turn mowers and snow and ice management products, partially offset by higher shipments of underground construction equipment and golf and grounds products.

Segment Earnings

Professional segment earnings for the third quarter of fiscal 2024 increased 1,174.6 percent compared to the third quarter of fiscal 2023, and Professional segment earnings margin increased to 18.8 percent from 1.5 percent for the third quarter of fiscal 2023. The increase in Professional segment earnings margin for the third quarter comparison was primarily due to the prior year non-cash impairment charges, productivity improvements, product mix, and net price realization, partially offset by higher material and manufacturing costs and lower net sales volume. Professional segment earnings for the year-to-date period of fiscal 2024 increased 22.0 percent compared to the same period of fiscal 2023, and Professional segment earnings margin increased to 17.8 percent from 13.5 percent for the year-to-date period of fiscal 2023. The increase in Professional segment earnings margin for the year-to-date comparison was primarily due to the prior year non-cash impairment charges, productivity improvements, and product mix, partially offset by higher material and manufacturing costs and lower net sales volume.

Residential Segment

Segment Net Sales

Worldwide net sales for our Residential segment for the third quarter of fiscal 2024 increased 52.6 percent compared to the third quarter of fiscal 2023. The increase in Residential segment net sales was primarily driven by higher shipments to our mass channel. Worldwide net sales for our Residential segment for the year-to-date period of fiscal 2024 increased 19.5 percent compared to the same period of fiscal 2023. The increase in Residential segment net sales was primarily driven by higher shipments to our mass channel, partially offset by lower shipments of snow products.

Segment Earnings

Residential segment earnings for the third quarter of fiscal 2024 increased 757.9 percent compared to the third quarter of fiscal 2023, and Residential segment earnings margin increased to 12.2 percent from 2.2 percent in the third quarter of fiscal 2023. The increase in Residential segment earnings margin for the third quarter of fiscal 2024 was largely due to net sales leverage, productivity improvements, and net price realization primarily driven by lower floor plan costs, partially offset by product mix and higher material and manufacturing costs. Residential segment earnings for the year-to-date period of fiscal 2024 increased 43.2 percent compared to the same period of fiscal 2023, and Residential segment earnings margin increased to 10.9 percent from 9.1 percent in the year-to-date period of fiscal 2023. The increase in Residential segment earnings margin for the year-to-date period of fiscal 2024 was largely driven by net sales leverage and productivity improvements, partially offset by product mix and higher material and manufacturing 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 third quarter of fiscal 2024 decreased by $1.7 million compared to the same period in fiscal 2023. Net sales for our Other activities in the year-to-date period of fiscal 2024 increased by $3.1 million compared to the same period in fiscal 2023.

Other Operating Loss

The operating loss for our Other activities for the third quarter of fiscal 2024 increased $8.7 million compared to the third quarter of fiscal 2023. The operating loss for our Other activities for the year-to-date period of fiscal 2024 increased $22.5 million compared to the same period in fiscal 2023. The increased operating loss for the third quarter of fiscal 2024 was primarily due to higher corporate expenses. The increased operating loss for the year-to-date period of fiscal 2024 was primarily due to higher corporate expenses and higher interest expense.