DA Davidson's review of dealer dollar sales data in North America shows a clear split across equipment categories in February. Same-store dollar sales at agricultural equipment dealers fell 11% year-over-year, representing the fifth month in a row of declines for that category.
The February dataset tracked by DA Davidson measures dollar sales at dealers that sell agricultural equipment and outdoor power equipment. That methodology differs from industry metrics that focus on unit counts for tractors and combines, since the dealer-dollar approach captures total dollars exchanged at dealer locations rather than strictly unit volumes.
Within the broader dealer universe, outdoor power equipment - commonly referred to as turf - performed more strongly. Turf dealer same-store dollar sales rose 6% year-over-year in February, according to DA Davidson, marking the third consecutive month of positive growth for the turf segment. The Toro Company is identified as a beneficiary of that upward trend in the outdoor power market.
DA Davidson highlighted that the extended weakness in agricultural equipment sales is coinciding with a period of policy and subsidy uncertainty for farmers. The broker noted that some of the outstanding subsidy and policy decisions are expected to be resolved in the coming days, a development that could influence dealer activity if and when those outcomes materialize.
Despite the divergent trajectories between farm equipment and turf dealers, DA Davidson said it continues to favor several names inside the agricultural and turf equipment space. Deere & Company, The Toro Company, and Titan Machinery remain the broker's preferred stocks within the sector.
Key points
- Agricultural equipment dealer same-store dollar sales in North America fell 11% year-over-year in February - the fifth straight monthly decline.
- Turf or outdoor power equipment dealer same-store dollar sales rose 6% year-over-year in February, the third consecutive month of growth for the segment.
- DA Davidson continues to maintain Deere, Toro, and Titan Machinery as preferred names in the agricultural and turf equipment sector.
Risks and uncertainties
- Policy and subsidy decisions affecting farmers remain unresolved; DA Davidson indicated some of these items are expected to be resolved in the coming days, creating uncertainty for agricultural equipment demand.
- The persistent decline in agricultural dealer same-store dollar sales - now in its fifth month - represents ongoing downside risk for companies tied to farm-equipment retail activity.