Marc McConnell, the Company’s President, CEO, and Chairman, reports, “We are pleased to have started the new year off showing significant improvement in both business units. While the Agricultural Product segment continues to face ongoing challenges, we are experiencing a meaningful improvement in demand for several of our key product categories, as evidenced by growth in our revenue and backlog.”

Consolidated – Q1 fiscal 2026 compared to Q1 fiscal 2025

• Sales increase of $1,499,000 or 29.2%.
• Gross profit as a percentage of sales declined by 0.3%.
• Operating expenses decreased by 5.2% as a percentage of sales.
• Net income of $196,000 for the three months ended February 28, 2026, a $252,000 improvement from the same period in fiscal 2025.

Agricultural Products – Q1 fiscal 2026 compared to Q1 fiscal 2025

• Sales of $3,754,000 for Q1 of fiscal 2026, a 27.3% increase.
• Gross profit as a percentage of sales increased by 7.8%.
• Operating expenses decreased by 7.8%.
• Net income of $7,000, an improvement of $353,000.

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Worldwide net sales and revenues increased 13 percent, to $9,611 million, in the most recent quarter. Net sales were $8,001 million for the quarter, compared with $6,809 million in the same quarter of 2025.

Net income attributable to Deere & Company for fiscal 2026 is forecasted to be in a range of $4.5 billion to $5.0 billion.

Source:

North American net sales decreased 33.9% in the first three months of 2025 compared to the same period in 2024. The most significant sales declines occurred in high-horsepower tractors, sprayers and combines. Income from operations for the first three months of 2025 decreased $48.2 million compared to the same period in 2024 and operating margins were (5.0)%.

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Agricultural segment sales fell 30.4% to $2.9M. The company cited high interest rates, low commodity prices, and dealer inventory saturation. However, steady demand in key product lines and cost cuts supported margins. Tariffs and steel supply pressures may impact short-term costs, but the company remains optimistic for growth as conditions improve.

President, CEO and Chairman Marc McConnell reports, “We are pleased to finish the first quarter with meaningful operational and profitability improvements despite challenging conditions that persist. While headwinds continue to affect overall demand in the ag equipment space, we see strength in product categories that are benefitting from favorable beef and dairy prices.

“In our modular buildings segment, the momentum continues, and we are very pleased with both our operational performance and the strong demand we are seeing. In both segments we are keeping a close eye on the impact of tariffs on both our costs and demand profile. Amid quite a lot of uncertainty we do remain optimistic for how we will perform the balance of the year.”

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Deere & Company reported net income of $869 million for the first quarter ended January 26, 2025, or $3.19 per share, compared with net income of $1,751 million, or $6.23 per share, for the quarter ended January 28, 2024.

Worldwide net sales and revenues decreased 30 percent, to $8.508 billion, in the most recent quarter. Net sales were $6.809 billion for the quarter, compared with $10.486 billion in 2024.

“Deere’s performance in the first quarter highlights our continued focus on optimizing inventory levels of both new and used equipment amidst the uncertain market conditions our customers are facing,” said John C. May, chairman and chief executive officer. ”We’re seeing compelling evidence that our efforts are positioning the company to successfully navigate the current environment.”

Company Outlook & Summary

Net income attributable to Deere & Company for fiscal 2025 is forecasted to remain in a range of $5.0 billion to $5.5 billion.

“The stability of our net income guidance not only reflects our resilience in a challenging market but also enables our sustained strategic investments to provide better outcomes for our customers,” May added.

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In a note to investors, J.P. Morgan’s Tami Zakaria said CNHI’s resturcturing program is on track to be completed during Q2. “Previously, CNHI announced an immediate restructuring program to reduce its salaried workforce by 5%,” she said. “It also unveiled its plan to right-size its cost structure. These two initiatives are expected to reduce total SG&A by a 10-15% run-rate. CNHI reduced its SG&A expenses by ~12% YoY in 1Q as management imposed strict discipline on discretionary spending, expanded support operations to lower-cost countries, and rationalized back-office operations.”

Source:

The Company achieved income from operations of C$4 million in the first quarter compared with a loss of C$0.1 million in the prior year first quarter by increasing margins and reducing selling and administrative expenses. Offsetting the increase in income was an increase in foreign exchange loss of C$1.2 million, additional interest expense of C$0.7 million and a decrease in the gain on disposal of assets by C$8.1 million from the prior year first quarter which resulted in a $2.2-million-dollar loss in the quarter.

Sales are projected to be higher in 2024 as the Company continues to improve problems associated with supply chain issues. The Company has a large backlog of sales and continues to have strong demand for its agricultural machinery and equipment. The Company’s majority shares were acquired by Basak Tractor a wholly-owned subsidiary of ASKO Holding on Dec. 28, 2023.

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Source:

• First quarter consolidated revenue declined 10% on lower industry demand
• First quarter diluted EPS at $0.31; adjusted diluted EPS at $0.33 ($0.35 in the first quarter of 2023)
• First quarter Agriculture segment adjusted EBIT margin down 200 bps year-over-year to 12.5%; Construction up 150 bps to 6.7%
• Cost reduction programs on track, helping to mitigate impact of slowing markets
• Full-year guidance updated to reflect lower agriculture industry projections

Agriculture: Agriculture net sales decreased for the quarter by 14% to $3.37 billion primarily due to lower industry volume across all regions and dealer inventory management, partially offset by favorable price realization.

Source:

Sales: Consolidated corporate sales from continuing operations for the 3-month periods ended February 29, 2024 were $ 5,723,000 compared to $7,087,000 during the same respective period in fiscal 2023, a $1,364,000, or 19.2%, decrease for the three months.

First quarter sales in our Agricultural Products segment were $4,236,000 compared to $5,445,000 during the same period of fiscal 2023, a decrease of $1,209,000, or 22.2%. They experienced a decrease in demand on their fall 2023 early order program for the first time in 3 years.

With the softening of the agriculture economy, they are expecting decreases in farm income levels from the past two fiscal years and expect that and will continue to affect sales in our Agricultural Products segment. They are also seeing increased inventory on dealer lots compared to a year ago and in turn have seen a slowdown in orders. They have put cost-cutting measures in place to partially mitigate the effect on cash flow from decreased sales. From a sales standpoint, they are working with dealers to help move field inventory to generate more sales opportunities for their products. They are also focused on new dealer acquisitions to penetrate geographic markets that their competitors have a stronghold on.

Net Income (Loss): Consolidated net loss from continuing operations was $424,000 for the 3-month period ended February 29, 2024, compared to net income of $350,000 for the same period in fiscal 2023.

Income (Loss) per Share: Loss per basic and diluted share for continuing operations in the first quarter of fiscal 2024 was $0.09, compared to income per basic and diluted share of $0.07 for the same period in fiscal 2023.

Backlog: The consolidated order backlog net of discounts for continuing operations as of April 3, 2024 was $11,416,000 compared to $12,007,000 as of April 3, 2023, a 4.9% decrease.

David King, Chief Executive Officer King remarked, “While the challenges posed by reduced commodity prices and diminished farm income projections impacted first-quarter revenue within our Agriculture Products segment, we remain steadfast in our pursuit of strategic initiatives fostering growth and operational efficiency. Our emphasis remains on cost reduction through our realignment program, while concurrently positioning ourselves for progressive enhancement via new product launches, integration of technology, and continual expansion of our dealer network.”

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