Tractor Supply's Q3 Earnings Beat Mark, Sales Rise on Solid Comps

Tractor Supply Company TSCO reported third-quarter 2025 results, wherein the bottom line surpassed the Zacks Consensus Estimate. Also, net sales and earnings increased from the year-ago period. 

Tractor Supply has posted earnings of 49 cents per share, which beat the Zacks Consensus Estimate of 48 cents. Also, the bottom line increased 8.6% from the figure reported in the prior-year quarter.

Net sales grew 7.2% year over year to $3.72 billion and came in line with the Zacks Consensus Estimate. The increase in sales can be attributed to store openings, gains from Allivet and an increase in comparable store sales.

Tractor Supply Company Price, Consensus and EPS Surprise

Tractor Supply Company price-consensus-eps-surprise-chart | Tractor Supply Company Quote

Comparable store sales (comps) grew 3.9% year over year, reversing the 0.2% drop registered in the prior year’s third quarter. The improvement reflects a 2.7% rise in average transaction count and a 1.2% increase in average ticket. Comps growth was fueled by strength in spring and summer seasonal products, as well as momentum in core categories like consumable, usable and edible products.

Tractor Supply’s Costs & Margins

Gross profit rose 7.7% year over year to $1.39 billion. The gross margin improved 15 basis points (bps) year over year to 37.4%, primarily driven by effective product cost management and the continued execution of its everyday low-price strategy. However, the improvement was partially offset by tariff costs and increased transportation expenses. Our model predicted gross profit to increase 8.1% and the gross margin to expand 40 bps to 37.6%.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, rose 8.4% to $1.05 billion from $965.8 million in the third quarter of 2024. As a percentage of net sales, SG&A increased to 28.1% from 27.8% seen in the year-ago quarter. This increase was largely due to planned investments and the timing of the rise in incentive compensation as TSCO lapped lower accruals in the last year and a lower sale-leaseback benefit. Such factors were partly offset by its focus on productivity and leveraged fixed costs. Our model predicted SG&A expenses to increase 8% and as a percentage of sales, this metric was anticipated to expand 20 bps to 24.8%.

Operating income for the quarter grew 5.6% year over year to $342.7 million. Meanwhile, the operating margin fell 20 bps to 9.2%. We estimated operating income to increase 6.6% and the operating margin to contract 10 bps to 9.3%.

TSCO’s Financial Position

Tractor Supply ended the quarter with cash and cash equivalents of $184.6 million, long-term debt of $1.74 billion and total stockholders’ equity of $2.57 billion. In the nine months ended Sept. 27, 2025, net cash provided by operating activities was $1.31 billion. In the same period, the company incurred a capital expenditure of $629.2 million.

In the third quarter, Tractor Supply returned $197.3 million to shareholders. This included the repurchase of 1.3 million shares of its common stock for $75.4 million and the payment of $121.9 million in quarterly cash dividends.

In the third quarter of 2025, the company continued to expand its footprint by opening 29 Tractor Supply stores. One Petsense by Tractor Supply store was closed during the period.

Sneak Peek Into TSCO’s Outlook

Following the year-to-date performance and comps view of up 1-5% for the fourth quarter, management has revised its guidance for 2025.

The company now expects net sales growth of 4.6-5.6% and comps growth of 1.4-2.4%. It had earlier anticipated net sales growth of 4-8% and comps rise of 0-4%.

The operating margin rate is projected between 9.5% and 9.7%. Net income is expected to be between $1.09 billion and $1.14 billion, with earnings per share (EPS) anticipated to be $2.06-$2.13. The operating margin rate was earlier projected between 9.5% and 9.9%. Net income was then expected to be between $1.07 billion and $1.17 billion, with EPS to be $2.00-$2.18.

This Zacks Rank #3 (Hold) company’s shares have gained 11.9% in the past three months compared with the industry’s 22.3% growth.

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This article originally published on Zacks Investment Research (zacks.com).

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