TORO CO

As more fully described in Note 3, Segment Data, of the Notes to Consolidated Financial Statements, we operate in two reportable business segments: Professional and Residential. Segment earnings 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, 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, as well as other unallocated corporate assets and liabilities, such as corporate facilities and deferred tax assets and liabilities. The following information provides perspective on the net sales and operating results of our reportable business segments and Other activities.

Professional Segment

Professional segment net sales represented 77.6 percent and 80.7 percent of consolidated net sales for fiscal 2024 and 2023, respectively. The following table presents our Professional segment's net sales, earnings, and earnings margin (dollars in millions):

Professional Segment Net Sales

Net sales for our Professional segment in fiscal 2024 decreased 3.2 percent compared to fiscal 2023. This decrease was primarily driven by lower shipments of lawn care equipment, snow and ice management products, and compact utility loaders, partially offset by higher shipments of golf and grounds and underground construction products.

Professional Segment Earnings

Professional segment earnings increased 25.5 percent in fiscal 2024 compared to fiscal 2023, and Professional segment earnings margin increased to 18.0 percent from 13.9 percent. The increase in Professional segment earnings margin for fiscal 2024 was primarily driven by the non-cash impairment charges in the prior year, productivity improvements, and product mix, partially offset by higher material and manufacturing costs and lower net sales volume.

Residential Segment

Residential segment net sales represented 21.8 percent and 18.8 percent of consolidated net sales for fiscal 2024 and 2023, respectively. The following table presents our Residential segment's net sales, earnings, and earnings margin (dollars in millions):

Residential Segment Net Sales

Net sales for our Residential segment in fiscal 2024 increased by 16.9 percent compared to fiscal 2023. This increase was primarily driven by higher shipments of lawn care products to our mass channel, partially offset by lower shipments of snow products.

Residential Segment Earnings

Residential segment earnings increased 13.8 percent in fiscal 2024 compared to fiscal 2023, and Residential segment earnings margin decreased to 7.9 percent from 8.1 percent. This Residential segment earnings margin decrease was primarily driven by product mix and higher material and manufacturing costs, partially offset by productivity improvements and net sales leverage.

Other Activities

Net sales for our Other activities consist of sales from a wholly-owned domestic distribution company less intercompany sales from our Professional and Residential business segments to the wholly-owned domestic distribution company. Net sales for our Other activities represented 0.6 percent and 0.5 percent of consolidated net sales for fiscal 2024 and 2023, respectively.

The following table presents net sales and operating loss for our Other activities (dollars in millions):

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 fiscal 2024 increased $4.2 million compared to fiscal 2023.

Other Operating Loss

Operating loss for our Other activities increased $27.0 million in fiscal 2024 compared to fiscal 2023. This year-over-year operating loss increase was primarily driven by higher corporate expenses and higher interest expense.