Less than a week ago in this space you read about some troubling third-quarter 2009 earnings reports from both The Toro Co. and John Deere.
As GCM Editor Scott Hollister noted in his post here last Friday, "Both companies unveiled sales and income figures that are significantly down from the same period in 2008, offering further proof that while the general economy may be on the cusp of recovery, the golf industry is still lagging behind."
Hollister reported that Toro's third-quarter profits had dropped 48 percent compared with third-quarter 2008, thanks largely to sagging sales in its professional division, which includes golf and landscape equipment. For the quarter that ended July 31, Toro earned $19.8 million, compared with $38.2 million a year ago. Year-to-date profits are trailing at about the same pace, off 47 percent.
Meanwhile, at John Deere Golf, sales were down 21 percent for the quarter but just 9 percent year-to-date. Operating profit in the third quarter was $480 million, compared with $725 million in 2008. Projections on sales of turf equipment and compact utility tractors in the U.S. and Canada is expected to be down about 20 percent, the company said.
We have yet to hear from Jacobsen on its third-quarter, but the release of results for the other two of this industry's Big Three makes us wonder what GCSAA members think is going to happen next year.
So we'd like to hear from you. With some economic signs looking up, are you ready to start putting equipment replacement money in your 2010 budgets? And will management be OK with that? If not, how much longer before you get the green light to invest in new machines? We'll be watching for your comments, and we're betting we won't be the only ones.