Tractor Supply's Q4 Earnings Miss, Comparable Store Sales Rise 0.3%

Tractor Supply Company TSCO reported fourth-quarter 2025 results, wherein the bottom and top lines missed the Zacks Consensus Estimate. While net sales increased from the year-ago period, earnings fell. 

Tractor Supply has posted earnings of 43 cents per share, which lagged the Zacks Consensus Estimate of 46 cents. Also, the bottom line dipped 2.3% from the figure reported in the prior-year quarter.

Net sales grew 3.3% year over year to $3.90 billion but came below the Zacks Consensus Estimate of $4.01 billion. The rise in sales can be attributed to store openings, gains from Allivet and an increase in comparable store sales (comps). Comps edged up 0.3% year over year compared with the 0.6% rise registered in the prior year’s fourth quarter. The improvement reflects a 0.3% rise in comparable average ticket. Continued strength in consumable, usable and edible products was somewhat offset by the lack of emergency-response-related demand and pressures in discretionary categories like big-ticket items.

The fourth-quarter results lagged management’s expectations, reflecting a shift in consumer spending as essential categories were resilient while discretionary demand was moderate. Nevertheless, the company was focused on executing its business fundamentals and gaining share in the farm and ranch channel. It also opened productive new stores and made continued progress on Project Fusion and localization initiatives.

Tractor Supply Company Price, Consensus and EPS Surprise

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

Consequently, shares fell around 5% following soft quarterly results. This Zacks Rank #3 (Hold) company’s shares have lost 4.6% in the past six months against the industry’s 10.4% growth.

Tractor Supply’s Costs & Margins

Gross profit rose 3% year over year to $1.37 billion. The gross margin fell 10 basis points (bps) year over year to 35.1%, as cost-management efforts were offset by elevated tariffs, incremental promotional activity and higher delivery-related transportation costs. Our model predicted gross profit to increase 8.5% and the gross margin to expand 70 bps to 35.9%.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, rose 6% to $1.07 billion from $1.01 billion in the fourth quarter of 2024. As a percentage of net sales, SG&A increased to 27.5% from 26.8% seen in the year-ago quarter. This increase was largely due to planned investments and fixed cost deleverage based on the level of comps growth. Such factors were partly offset by its focus on productivity and cost control. Our model predicted SG&A expenses to increase 8.2% and as a percentage of sales, this metric was anticipated to expand 40 bps to 24%.

Operating income for the quarter fell 6.5% year over year to $297.7 million. Meanwhile, the operating margin fell 80 bps to 7.6%. We estimated operating income to increase 6.1% and the operating margin to remain flat at 8.4%.

TSCO’s Financial Position

Tractor Supply ended the quarter with cash and cash equivalents of $194.1 million, long-term debt of $1.76 billion and total stockholders’ equity of $2.58 billion. In 2025, net cash provided by operating activities was $1.64 billion. In the same period, the company incurred a capital expenditure of $894.8 million.

During 2025, Tractor Supply returned $848.5 million to shareholders. This included the repurchase of 6.6 million shares of its common stock for $360.8 million and the payment of $487.7 million in quarterly cash dividends.

In 2025, the company continued to expand its footprint by opening 99 Tractor Supply and five Petsense by Tractor Supply stores, while closing four Petsense by Tractor Supply stores.

Sneak Peek Into TSCO’s Outlook

Management has issued guidance for 2026. The company expects net sales growth of 4-6% and comps growth of 1-3%.

For the year, the operating margin rate is projected between 9.3% and 9.6%. Net income is expected to be between $1.11 billion and $1.17 billion, with earnings per share (EPS) anticipated to be $2.13-$2.23. Capital expenditures, net of sale leaseback proceeds, are forecast to be $675-$725 million and share repurchases of $375-$450 million for 2026.

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

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