Deere & Company: Tariff refunds trajectory and updated net tariff exposure assumptions

Deere & Company 2026 Q3: Tariff refunds trajectory and updated net tariff exposure assumptions

• Management said Q3 included $110 million of incremental tariff-related refunds due to Phase II AIPA refund approvals timing.
• Total refunds recognized in fiscal 2026 were updated to $382 million, while the outlook assumes no further refund activity during the rest of fiscal 2026.
• Following policy changes, Deere now expects direct tariff expense of approximately $1.1 billion for fiscal 2026 excluding IEPA refunds.
• In Q&A, management clarified the direct tariff run rate moved from $1.2 billion to $1.1 billion mainly due to changes to Section 32 tariffs (roughly 25% to 15%) effective June 1.
• Management quantified net tariff exposure as direct tariffs less refunds: approximately $57 billion of net exposure in 2026 (stated as “57 ish”) versus a closer to $1 billion annual direct tariff run rate in 2027, implying a step up into next year.