Deere Is Facing Challenges As It Sees Low Sales And High Inventory In 2025

This year, John Deere is facing increasing pressure as performance is still being impacted by declining demand, high inventories of used equipment, and economic uncertainty. Revenue is still declining, and the company’s stock is reflecting those concerns with the biggest decline in over three years, despite hitting earnings estimates for the most recent quarter.

What could be the main reasons behind this drop in sales

Particularly hard hit has been large turf equipment, with industry sales in the United States and Canada predicted to drop by roughly 30% this fiscal year compared to last. This year, sales of Deere’s biggest division, Production and Precision Agriculture, which includes big tractors, soil preparation tools, and cotton and sugarcane harvesters, are also predicted to drop by 15% to 20%.

The company’s construction and forestry divisions are predicted to shrink by 10% to 15%, while its smaller agriculture and turf division is expected to see a 10% drop in sales. In the third quarter alone, sales of production and precision agriculture fell more than sixteen percent to $4.27 billion, falling short of analyst forecasts. Small agriculture and turf saw a less than 1% decline in sales to $3.03 billion, while construction and forestry saw a 5.4% decline to $3.06 billion.

Is the used equipment inventory piling up?

A major issue facing Deere at the moment is the abundance of late-model used heavy equipment on the market. Purchases of new equipment have already been slowed by high interest rates and cautious consumers, and Deere will find it even more difficult to push through sales at higher prices now that there is more used equipment available.

The company is still working on controlling the amount of used inventory, CEO John May acknowledged. Deere still had $7.71 billion in inventory as of the end of July, which is nearly 9% more than it had at the end of the previous fiscal year. Even though Deere has made strides in matching production to retail demand, executives agreed that more needs to be done before used inventory levels return to normal.

Profits are low due to the reduced demand and low revenue

In spite of these difficulties, Deere’s third-quarter earnings were marginally better than what Wall Street had anticipated. The company’s revenue dropped 8.6% year over year to $12.02 billion, its eighth consecutive quarter of declining revenue. 

That amount nevertheless exceeded the $11.86 billion analyst consensus. Earnings per share decreased to $4.75 from $6.29 a year earlier, and net income fell by almost 26% to $1.29 billion. Nevertheless, the EPS exceeded the $4.58 analyst forecast.

But the larger trends were of greater interest to investors. In a single trading session, Deere’s stock fell 8.1%, erasing gains made throughout the year. The stock had previously risen 21% in 2025, surpassing the S&P 500, but since mid-May, it has lost more than 11% of its value after reaching a record high of $531.48.

Deere is balancing well between tough market and company’s progress

The management of Deere maintains that there is progress in bringing supply and demand into alignment, but the obstacles are still evident. High borrowing costs, a surplus of late-model used equipment, and trade uncertainty are all having a significant negative impact on sales volumes across key business segments.

Deere is currently faced with the challenging task of controlling diminishing sales while attempting to preserve profitability through stricter cost controls and cautious inventory management. Although the company’s long-term position in construction and agricultural equipment is still solid, 2025 has shown how susceptible even the biggest players are to changes in the market and the economy.

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