Deere & Co Improves High-Horsepower Tractor Inventory, Maintains 2026 Outlook
Deere & Co reports improved inventory levels in high-horsepower tractors and combines through enhanced management of new and used equipment. The company maintained its fiscal 2026 net income outlook and received a $272 million tariff refund allocated across its segments.
1. Inventory Management Improvements
Deere has significantly reduced both new and used equipment backlogs, with the most notable gains in high-horsepower tractors and combines. Improved inventory turns reflect closer alignment of production with retail demand, supporting sales momentum in key product lines.
2. Fiscal 2026 Outlook Maintained
Leadership reaffirmed its full-year net income guidance for fiscal 2026, signaling confidence in sustained profitability. This guidance incorporates current market dynamics and planned cost actions without reliance on additional price increases.
3. Tariff Refund Allocation and Mitigation
A $272 million tariff refund was distributed 50% to Construction & Forestry, 30% to Small Ag and Turf, and 20% to Large Ag. Deere is executing mitigation measures—reshoring, exemption submissions and USMCA compliance—to offset its $1.2 billion annual tariff run rate.
4. Market Trends and Future Outlook
Construction equipment demand is strong, driven by Earthmoving underproduction recovery, while Deere has gained share through pricing adjustments. The agricultural cycle is expected to bottom in 2026, with precision technologies like See & Spray expanding acreage and renewal rates above 70% boosting long-term recurring revenue.