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April 1, 2005

VIA EDGAR, FACSIMILE AND OVERNIGHT COURIER

United States Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street N.W.

Washington, D.C. 20549

Attn:     Daniel Gordon, Branch Chief

              Mail Stop 0306

RE:     The Toro Company

            Form 10-K for the Fiscal Year Ended October 31, 2004

Dear Mr. Gordon:

The following information is supplied in response to the information requests made by the
staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) in its
letter dated March 11, 2005 (the “Comment Letter”) regarding The Toro Company’s annual
report on Form 10-K for the fiscal year ended October 31, 2004.

The following responses to your comments are numbered to correspond to the numbered
paragraphs contained in your letter dated March 11, 2005. For the convenience of the
Staff’s review, we have set forth the comments contained in the Staff’s Comment Letter
above each of the Company’s corresponding responses.

Note 1 — Summary of Significant Accounting Policies — Page 33

Inventory — Page 33

    1.
    Comment: Please revise future filings to disclose your accounting
policies for valuing
inventory, including a discussion of how you determine your reserves.

    Response: We currently disclose the following in Footnote 1 to the consolidated
financial statements related to our accounting policy for valuing inventory:
“Inventories are valued at the lower of cost or net realizable value with cost
determined by the last-in, first-out (LIFO) method for most inventories.” In future
filings, we will, as requested, expand the disclosures related to our accounting
policies for valuing inventory, and include a discussion of how we determine valuation
reserves.

Revenue Recognition — Page 34

    2.
    Comment: We note that you record a provision when revenue is
recognized for returns and promotion expenses. In future filings include a rollforward
of this account on Schedule II — Valuation and Qualifying Accounts as required by
Rule 5-04 of Regulation S-X. Supplementally provide us with a rollforward of this
allowance account on a gross basis showing increases, decreases, and adjustments
separately, for all periods presented.

    Response: The Company does not typically offer a right of return on products
sold in the normal course of business. However, we do have a limited number of programs
related to certain products under which we do allow the customer the right to return the
products under certain conditions. Product returns and the related accrual for estimated
returns under these programs are not material to the Company’s operating results and
financial condition, and therefore we have not included a rollforward of this account in
Schedule II — Valuation and Qualifying Accounts in accordance with the guidance in Rule
4-02 of Regulation S-X in our annual report on Form 10-K. Accordingly, we do not believe
it is necessary to add the accrual for estimated product returns to Schedule II —
Valuation and Qualifying Accounts in future filings as the amounts involved are not
material.

    Supplementally, as requested, the following is a schedule of activity in our product
returns reserve for all periods presented in our annual report on Form 10-K for the
fiscal year ended October 31, 2004:

    Balance as of

    Charged to

    Balance as of

    Description

    the beginning

    costs and

    the end of

    (dollars in thousands)

    of the fiscal year

    expenses

    Returns

    the fiscal year

    Fiscal year ended

October 31, 2004

    Product returns reserve

    $
    1,790

    $
    6,619

    $
    6,804

    $
    1,605

    Fiscal year ended

October 31, 2003

    Product returns reserve

    $
    1,002

    $
    7,894

    $
    7,106

    $
    1,790

    Fiscal year ended

October 31, 2002

    Product returns reserve

    $
    1,054

    $
    6,348

    $
    6,400

    $
    1,002

    As requested, in future filings, we will include a rollforward of advertising and
marketing program accruals on Schedule II — Valuation and Qualifying Accounts in our
annual report on Form 10-K. As requested, the following is a schedule of activity in our
advertising and marketing program accruals for all periods presented in our annual
report on Form 10-K for fiscal year ended October 31, 2004:

    Balance as of

    Charged to

    Balance as of

    Description

    the beginning

    costs and

    the end of

    (dollars in thousands)

    of the fiscal year

    expenses(a)

    Deductions(b)

    the fiscal year

    Fiscal year ended

October 31, 2004

    Advertising and
marketing program
reserves

    $
    38,107

    $
    171,412

    $
    167,546

    $
    41,973

    Fiscal year ended

October 31, 2003

    Advertising and
marketing program
reserves

    $
    34,373

    $
    158,872

    $
    155,138

    $
    38,107

    Fiscal year ended

October 31, 2002

    Advertising and
marketing program
reserves

    $
    34,919

    $
    159,123

    $
    159,669

    $
    34,373

      (a) Provision consists of price protection, rebates, cooperative
advertising, floor planning costs, commissions, and other promotional program
expenses. The expense of each program is either classified as a reduction of net sales
or as a component of selling, general, and administrative expense in accordance to the
provisions of Emerging Issues Task Force Issue No. 01-09, Accounting for Consideration
Given by a Vendor to a Customer.

       (b) Claims paid.

    3.
    Comment: In a supplemental response and in future filings tell us
the accounting for any special arrangements with distributors such as price
protection, rights of return and other discounts, credits or special terms. Please
cite the relevant accounting guidance in your response.

    Response: As requested, in future filings we will expand our disclosures
related to arrangements with distributors that include special terms, such as rights of
return, price protection, and other special sales discounts, credits and promotional
programs. As outlined in our response to the Staff’s comment #2 above, we typically do
not offer our customers the right of return on products sold in the normal course of
business. However, we do have a limited number of programs related to certain products
where we do give the customer the right to return the products under certain conditions,
such as our annual stock rotation program to qualifying customers. To date, we have not
experienced a material amount of returns under these programs as illustrated in the
table above in response to comment 2. The Company applies Statement of Financial
Accounting Standards (SFAS) No. 48, Revenue Recognition When Right of Return Exists, in
accounting for sales transactions in which the customer has the right to return the
product. Accordingly, the Company recognizes revenue at the time of shipment of the
product to the customer when all of the following conditions are met:

    •
    The price to the customer is fixed and determinable;

    •
    The customer is obligated to pay the Company for the product and the obligation is not contingent;

    •
    The customer’s obligation to the Company would not change in the event of theft
or damage to the product;

    •
    The customer has economic substance apart from that the Company provides;

    •
    The Company does not have significant obligations for future performance to
bring about the resale of the product by the customer; and

    •
    The amount of future returns can be reasonably estimated.

    We provide for estimated returns related to these limited programs at the time of sale.
We base our provisions for returns under these programs primarily on our historical
experience with returns under similar programs, as well as our expectations for changes
in return patterns in the future. In assessing our ability to make a reasonable estimate
of future returns, we consider factors such as the following:

    •
    The susceptibility of the product to significant external factors;

    •
    The length of time during which the product can be returned;

    •
    The Company’s historical returns experience with the product; and

    •
    The volume of substantially similar transactions involving the product.

    We believe that our accounting policies and practices with respect to sales transaction
involving a right of return are consistent with the requirements of SFAS No. 48.

    We also provide limited price protection on certain professional products sold to our
distributors based on the ultimate resale price of the products to the designated
end-user customer. We estimate the amount of price protection payments we will
ultimately be required to make to our distributors and record them at the time of sale
of eligible products. Our estimates of our obligations under price protection programs
are based on the terms of the arrangements with our distributors, our past experience
with price protection payments related to the specific product and distributors, field
inventory levels, and our expectations for changes in future price protection payment
trends. The Company recognizes the amount accrued for price protection as a reduction of
net sales.

    The majority of the remainder of our sales promotion expenses consists of volume
discounts and rebates that are paid to our customers based on their volume purchases
from the Company. These volume discounts and rebate costs are accrued at the time of
product sale based on the terms of the program applicable to the products sold. The
Company recognizes these costs as a reduction of net sales.

    The costs of other special sales discounts, credits, cooperative advertising, floor
planning, commissions, and other promotional programs not specifically mentioned above
are accrued at the point of sale based on our historical experience, as well as our
expectations for changes in relevant trends in the future. The expense of each program
is either classified as a reduction of net sales or as a component of selling, general,
and administrative expense in accordance to the provisions of Emerging Issues Task Force
Issue No. 01-09, Accounting for Consideration Given by a Vendor to a Customer.

    Our accounting policies and practices for the above mentioned marketing and sales
promotion programs is consistent with the applicable accounting guidance set forth in
Emerging Issues Task Force Issue No. 01-09, Accounting for Consideration Given by a
Vendor to a Customer, and SFAS No. 5, Accounting for Contingencies.

    4.
    Comment: We note you have deferred revenue and other long term
liabilities of approximately $13 million at October 31, 2004. In a supplemental
response and in future filings tell us the significant terms and conditions of
transactions for which you deferred revenue and how you accounted for such
transactions.

    Response: In future filings, we will, as requested, include additional
disclosure related to the types of transactions that result in deferred revenue, the
significant terms and conditions surrounding them and our accounting for these
transactions. We supplementally advise the Staff that the majority of the deferred
revenue reported in our balance sheet as of October 31, 2004 relates to fees under
service and maintenance contracts, revenue from extended warranty programs, and amounts
related to credit guarantees provided to financing companies in connection with certain
lease transactions. Additional information regarding these items and our accounting
policies related to them is as follows:

    •
    We sell service and maintenance contracts to end-user customers in certain
markets. We apply the provisions of FASB Technical Bulletin 90-1, Accounting for
Separately Priced Extended Warranty and Product Maintenance Contracts (FTB 90-1),
in accounting for the fees associated with these service and maintenance contracts.
Accordingly, the total revenue to be earned under these contracts is recognized as
deferred revenue at the time the contract is sold, and amortized into earnings
using the straight-line method over the term of the service contract. As of October
31, 2004, the amount of deferred revenue related to unrecognized fees under service
and maintenance contracts was $8.6 million.

    •
    We also offer extended warranty programs to end-user customers on certain
products. We account for revenue associated with these extended warranty programs
under FTB 90-1. Therefore, the total warranty contract revenue is recognized as
deferred revenue at the time of sale and amortized into earnings using the
straight-line method over the extended warranty period. As of October 31, 2004, the
amount of deferred revenue related to extended warranty programs was $1.7 million.

    •
    We apply the provisions of SFAS No. 13, Accounting for Leases, in accounting for
leases, including both sales-type and operating lease transactions with customers.
We have an agreement with a third-party finance company to provide lease-financing
options to certain of our end-user customers. A majority of these leases are
classified as sales-type leases. However, for a limited number of customers, we
have provided significant credit guarantees to the third-party financing company
due to the credit risk associated with these customers. We account for these
transactions as operating leases, and the related revenue is deferred and
recognized ratably over the lease term. As of October 31, 2004, the amount of
deferred revenue for these operating leases was $0.9 million.

Note 13 — Commitments and Contingent Liabilities — Page 43

Customer Financing — Page 43

Wholesale Financing — Page 43

    5.
    Comment: Supplementally tell us how you account for:

    •
    sales of inventory that are subject to inventory repurchase agreements, and

    •
    sales of your receivables to third party financing companies

    Additionally, tell us the aggregate amount of gains and losses you recorded on the sales
of receivables to third parties and where they are presented in your financial
statements.

    Response: For certain product lines, the Company sells product to distributors
and the distributors resell the product to dealers, who sell the product to end-users.
Financing support is provided to some of our dealers and distributors, which assists
them to fund the purchase of our product (floor planning). This is done through two
different options: Toro Credit Company, our wholly owned consolidated finance
subsidiary, and a third party finance company. This is a common practice in our industry
as well as in others that rely on distributors and/or dealers to sell product to the
ultimate end-users. Floor planning is a business practice designed to help our
distributors and dealers maintain inventory of our products sufficient to support the
anticipated level of retail sales.

    We recognize the revenue from sales to distributors and dealers under floor plan
arrangements at the time of shipment and transfer of title based on the facts and
circumstances of the transactions, the rights and obligations of the parties, and our
customary business practices in such arrangements. We have considered the guidance in
SFAS No. 49, Accounting for Product Financing Arrangements, and Staff Accounting
Bulletin (SAB) Topic 13.2.2 in establishing our accounting policies related to these
transactions. Specifically: (i) the buyer is obligated to pay us the purchase price of
the product at the earlier of the time of sale, or the end of the pre-determined program
period; therefore, payment is not contingent on resale of the product, (ii) the buyer’s
obligation to us would not be changed in the event of theft or physical destruction or
damage of the product, (iii) the buyer acquiring the product for resale has economic
substance apart from that provided by us, and (iv) we have no sig