Titan Machinery Margins Drop in Q2
Titan Machinery(NASDAQ:TITN) reported fiscal second quarter ended July 31, 2025, earnings on August 28, 2025, showing a 14% decline in total revenue, a consolidated net loss of $6 million, and narrowed full-year fiscal 2026 guidance to an adjusted diluted loss per share range of $1.50-$2.00. The company reaffirmed progress on strategic inventory reduction, lifted its Europe segment outlook, and highlighted near-term margin compression tied to aggressive inventory actions and challenging domestic agriculture market conditions.
Equipment inventory stood at $954 million as of quarter-end, flat compared to fiscal 2025 year-end, but $365 million below the fiscal second quarter ended July 31, 2024, peak, following an aggressive destocking program by management. This proactive inventory approach has necessitated deeper pricing concessions and placed sustained downward pressure on equipment margins, particularly in the domestic Agriculture segment, which posted a margin of 3.1% for the first half of fiscal 2026, compared to a historical range of 8%-12%.
While short-term profitability suffers, successful inventory right-sizing should accelerate margin normalization and reduce interest expense in fiscal 2027, positioning Titan Machinery to regain historical return levels as industry demand stabilizes.
Source Fool.com
