Deere reports sales drop, expects $600M tariff impact on the year
In “challenging times” as described by Chief Executive John May, Deere lowered its full-year outlook as its profit and sales fell in its fiscal third quarter.
Deere & Company reported net income of $1.289 billion for the third quarter ended July 27, 2025, compared with net income of $1.734 billion, for the quarter ended July 28, 2024, a decrease of 26%. For the first nine months of the year, net income attributable to Deere & Company was $3.962 billion, compared with $5.855 billion, for the same period last year, a 32% drop.
UPDATE: Layoffs confirmed
On Aug. 18, KSJB Radio in North Dakota reported that John Deere has confirmed rumored layoffs at three of its U.S. manufacturing sites. The cuts affect 115 employees at Harvester Works in East Moline, Ill. (effective Aug. 29), 52 workers at the Seeding and Cylinder plant in Moline, Ill. (Sept. 26), and 71 employees at the Foundry in Waterloo, Iowa (Sept. 19). Deere said affected workers are eligible for recall based on seniority and qualifications and will receive supplemental pay and health coverage for up to six months.
Tariff Impact
“Tariff costs in the quarter were approximately $200 million, which brings us to roughly $300 million in tariff expense year-to-date based on tariff rates in effect as of today,” said Deere’s Director of Investor Relations John Beal during an earnings call with analysts on Aug. 14. “Our forecast for the pre-tax impact of tariffs in fiscal 2025 is now adjusted to nearly $600 million.”
Worldwide net sales and revenues decreased 9 percent, to $12.018 billion, for the third quarter of 2025 and decreased 18 percent, to $33.290 billion, for nine months. Net sales were $10.357 billion for the quarter and $28.338 billion for nine months, compared with $11.387 billion and $35.484 billion last year, respectively.
Small Ag and Turf
Net sales for Q3 2025 came in at $3,025 million, a 1% decline compared to Q3 2024 sales of $3,053 million.
Deere said the decrease is a result of lower shipment volumes, partially offset by favorable currency translation and price realization. Operating profit decreased due to higher tariffs, partially offset by reductions in warranty expenses and lower production costs. The decreased production costs were primarily the result of lower material costs.
Production and Precision Ag
Net sales for Q3 2025 of $4,273 million compared to Q3 2024 sales of $5,099 million, a 16% decline.
Construction and Forestry
Net sales for Q3 2025 of $3,059 million compared to Q3 2024 sales of $3,235 million, a 5% drop.
Financial Services
Net sales for Q3 2025 of $1,418 million compared to Q3 2024 sales of $1,489 million, a 5% drop.
“By proactively managing inventory, we’ve matched production to retail demand, enabling our company and dealers to respond swiftly to market shifts and customer needs,” said John May, chairman and CEO of John Deere. “By continuing to address the high levels of used equipment in the industry, we’re building a healthier market for everyone—our customers, our dealers, and our business—even in these challenging times.”
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2025 is forecasted to be in a range of $4.75 billion to $5.25 billion. “We remain committed to delivering solutions that address our customers’ current needs while also laying the groundwork for future growth. For example, the increasing utilization and proven in-field effectiveness of advanced technologies—such as See & Spray and Harvest Settings Automation—are empowering customers to improve their productivity and better navigate industry challenges,” May noted. “The positive outcomes we’re enabling reinforce our confidence in Deere’s future despite near-term uncertainty.”
Deere expects the large ag market to be down about 30%, and the small ag and turf market to be down about 10%. Deere said it expects the most expensive tractors – 100+ HP and 4WD tractors – to take the biggest hit, with industry sales dropping by a third or more.
Deere Segment Outlook for Fiscal 2025
Net Sales
- Small Ag & Turf, Down ~ 10%
- Production & Precision Ag, Down 15% to 20%
- Construction & Forestry, Down 10% to 15%
