Can Tractor Supply's Rural Lifestyle Demand Offset Cost Pressures?

Tractor Supply Company, Inc. TSCO has demonstrated resilience in managing rising supply costs by leveraging strong demand for rural lifestyles. In third-quarter 2025, the company achieved a 7.2% year-over-year increase in revenues, reaching $3.72 billion. Demand across core consumable, usable, and edible categories remained resilient, delivering steady transaction growth and reinforcing the stability of Tractor Supply’s customer base. As a result, comparable sales improved 3.9%, with transaction growth of 2.7%.

The company highlighted record levels of customer engagement, including growing loyalty program participation and consistently improving satisfaction scores, indicating a healthy and committed shopper cohort.

This steady demand helped counterbalance the effects of higher product, transportation, and tariff-related costs flowing through the P&L. Management noted that modest pricing actions and a stable commodity cost environment supported a slight gross margin expansion of 15 basis points to 37.4%, reflecting disciplined cost management and strong execution across merchandising and supply chain operations.

The company experienced record-high customer metrics for the third quarter, with the Neighbour's Club accounting for more than 80% of sales and showing gains in member retention and spending per member. Its HomeCount Heroes program continues to attract new customers. The company’s growing presence in outdoor recreation and wildlife supplies, including the Field & Stream brand launch, is further expanding its relevance with core customers.

Strategic initiatives, including digital growth, same-day delivery, Final Mile expansion, and the scaling of its direct sales program, are gaining traction and are expected to begin self-funding in the coming year. With healthy customer demand, disciplined cost controls, and strengthening strategic capabilities, Tractor Supply appears well-positioned to manage near-term cost pressures while sustaining its long-term growth trajectory. The company’s value proposition in rural markets continues to gain momentum with its partners. For fiscal 2026, Tractor Supply plans to expand self-service tools and advertising options. With this expansion and momentum, Tractor Supply is well-positioned to sustain profitability and achieve steady growth despite ongoing cost pressures.

The Zacks Rundown for TSCO

TSCO’s shares have gained 3% year to date compared with the industry’s rise of 1.4%. TSCO carries a Zacks Rank #3 (Hold).

From a valuation standpoint, TSCO trades at a forward price-to-earnings ratio of 23.7X, higher than the industry’s average of 17.9X.

The Zacks Consensus Estimate for TSCO’s 2025 and 2026 earnings implies a year-over-year rise of 3.4% and 10.5%, respectively. TSCO delivered a trailing four-quarter negative earnings surprise of 1.8%, on average.

Stocks to Consider

Some better-ranked stocks have been discussed below:

Ulta Beauty, Inc. ULTA operates as a specialty beauty retailer in the United States, Mexico, and Kuwait. At present, Ulta Beauty holds a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for ULTA’s current fiscal-year sales implies growth of 6.8% and earnings indicate a decline of 3.8% from the year-ago figures. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. At present, Boot Barn holds a Zacks Rank of 2.

The Zacks Consensus Estimate for Boot Barn’s current fiscal-year sales and earnings indicates growth of 16.2% and 20.5%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 5.4%, on average.

Five Below, Inc. FIVE operates as a specialty value retailer in the United States. At present, Five Below holds a Zacks Rank of 2.

The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings indicates growth of 16.2% and 1.2%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 50.5%, on average.

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

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