Titan Machinery Stock Plunges After Missing Q1 Targets, Inventory Issues Persist

Titan Machinery Inc TITN shares slipped after reporting worse-than-expected first-quarter fiscal 2025 earnings. 

The company recorded revenue growth of 10.4% year-over-year to $628.703 million, missing the consensus of $661.73 million.

The gross profit was $121.755 million (+2.7% Y/Y), and the margin contracted 145 bps to 19.4%, reflecting lower equipment margins, which are being driven by higher levels of inventory and softening demand.

The equipment stores company registered an EPS of $0.41, missing the consensus of $0.61. Operating margin for the quarter was 3.6% compared to 6.5% a year ago

Segment Revenues: Agriculture $447.687 million (+5.8% Y/Y), Construction $71.49 million (-0.7% Y/Y), Europe totaled $65.105 million (-12.5% Y/Y), and Australia $44.419 million.

Equipment sales increased to $468.1 million (from $429.4 million a year ago), and Parts sales rose to $108.2 million (from $96.6 million a year ago).

Cash at the end of the first quarter of fiscal 2025 was $35.7 million. Inventories increased to $1.4 billion as of April 30, compared to $1.3 billion as of January 2024-end. 

Net cash used in operating activities for the quarter totaled $32.35 million, compared to $77.7 million a year ago.

“Our first quarter results reflected an industry-wide transition to a more challenging market environment, characterized by softening demand and excess supply of inventory in many product categories as OEM delivery timelines returned to normal and as new sales converted to used trade-ins,” commented Bryan Knutson, Titan Machinery’s President and Chief Executive Officer.

“Lower net farm income and the extended duration of higher interest rates are impacting farmer sentiment and influencing farmers’ equipment purchasing decisions across our geographic footprint.”

“In consideration of the incrementally softer demand than we initially anticipated, we are updating our full year modeling assumptions for revenue, and also modifying our underlying assumptions for equipment margins and floorplan interest expense,” added Knutson.

2025 Outlook: Titan Machinery lowered its EPS Outlook. It now expects $2.25-$2.75 (prior $3.00 – $3.50) versus the consensus $3.18.

TITN lowered its Australia revenue outlook to $240 million-$260 million from the prior view of $250 million-$270 million.

Price Action: TITN shares are trading lower by 10.8% at $20.65 at the last check Thursday.

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