Titan Machinery Inc. Q4 FY2026 earnings call

Inventory optimization: Reduced total inventory by over $200M in FY2026, surpassing targets; quality improved but work remains. Domestic ag: Challenging for growers, commodity prices below break-even. Construction: Infrastructure and data center work stable, residential demand softer. Australia: Market similar to domestic, but recent rainfall helps; modest growth expected. Europe: Majority of German divestiture behind, cautious on industry volumes.

Domestic ag segment: Q4 sales $406.7M, same-store sales down 22.8%; FY2026 total revenue $2.4B vs $2.7B in FY2025. Construction segment: Q4 sales $90.2M, same-store sales down 4.6%. Europe segment: Q4 sales $68.8M, up 5.2% with foreign currency benefit; FY2026 revenue down. Australia segment: Q4 sales $76.1M, up 16.7%; FY2026 revenue up.

Fiscal 2027 guidance: Domestic ag revenue down 15%-20%; construction flat to up 5%; Europe down 20%-25%; Australia up 10%-15%. Consolidated equipment margin expected 8.4% vs 7.3% in FY2026. CapEx guided to ~$15M. Tax rate near zero in US due to valuation allowance.

Factors like commodity price volatility, input cost increases (fertilizer, diesel), geopolitical issues (Iran conflict) impacting input costs and grower confidence.

Q: On corn pricing and farmer equipment purchase interest; A: Some price uptick, but still below break-even, monitoring E15 and commodity trends.

Q: On guidance and China/ E15; A: China commitments baked in, E15 would boost; Iran conflict impacts input costs.

Q: On CapEx, tax rate, depreciation; A: CapEx ~$15M, US tax rate near zero, depreciation mid-30s, impairment charges low.