Titan Machinery Inc. (NASDAQ: TITN) reported a steeper-than-expected loss for its fiscal fourth quarter as the agricultural and construction equipment dealer accelerated inventory reductions in response to weakening demand.
Despite the disappointing earnings, shares surged 10.8% on Thursday, as investors appeared to welcome the company’s strategic shift following a nearly 50% drop in stock value over the past year.
For the quarter ended January 31, Titan posted an adjusted loss of $1.88 per share, significantly missing analysts’ expectations of a $0.62 loss. Revenue declined 10.8% year-over-year to $759.9 million but exceeded forecasts of $728.18 million.
The company reduced inventory by approximately $304 million during the quarter, bringing the total reduction since its fiscal second-quarter peak to $419 million. However, this came at the cost of equipment margins in the short term.
“While this accelerated reduction came at the expense of our equipment margins in the short run, this was a key lever that we felt was necessary to improve our position as we transition into fiscal 2026 with a more subdued demand environment,” said CEO Bryan Knutson.
The agriculture segment saw a 13.8% revenue drop to $534.7 million, reflecting weaker demand due to declining net farm income and high interest rates. The segment posted a pre-tax loss of $55.3 million, a stark reversal from the $28.8 million in income recorded a year earlier.
Looking ahead, Titan expects agriculture segment revenue to decline 20-25% in fiscal 2026, aligning with industry projections of a 30% year-over-year drop in North American large agriculture equipment demand.
Lake Street Capital Markets maintained a Hold rating with a $15 price target, noting, “Q4’25 results beat on the top line as the company aggressively sold through inventory, but at the expense of margins to deliver a significant earnings miss… The FY26 guide calls for further compression on both the top and bottom line beyond consensus estimates.”
