Tractor Supply Company (NASDAQ: TSCO) saw its shares decline following the release of its fourth-quarter financial results, which revealed earnings and revenue figures that did not meet market forecasts. The retailer highlighted a noticeable pullback in consumer discretionary spending and ongoing cost pressures as key factors impacting performance during the period.
For the quarter, Tractor Supply reported earnings per share (EPS) of 43 cents, undershooting the analyst consensus estimate of 47 cents. Quarterly revenues totaled $3.898 billion, falling short of the $4 billion anticipated by market analysts. Despite these misses, the company’s net sales increased by 3.3%, reaching $3.90 billion. Comparable store sales experienced a slight rise of 0.3%, supported by new store additions and contributions from the acquisition of Allivet.
“Our fourth quarter results came in below our expectations and reflected a shift in consumer spending, with essential categories remaining resilient while discretionary demand moderated,” commented Hal Lawton, President and Chief Executive Officer of Tractor Supply.
The company’s gross profit for the quarter grew by 3.0%, from $1.33 billion in the prior year period to $1.37 billion. However, this gain was accompanied by a small decline in gross margin, decreasing to 35.1% from 35.2% year-over-year. While cost control measures contributed positively, these were counterbalanced by the impacts of tariffs, increased promotional activities, and elevated transportation expenses related to delivery.
Operating income declined by 6.5%, from $318.3 million in the fourth quarter of 2024 to $297.7 million in the recent quarter. Net income followed a similar trend, decreasing 3.8% to $227.4 million from $236.4 million in the prior year period. These decreases underscore the margin pressures faced despite higher sales volumes.
In terms of expansion, Tractor Supply opened 31 new Tractor Supply stores and one new Petsense by Tractor Supply store during the quarter, continuing its strategic footprint growth. The company ended the quarter holding $194.1 million in cash and cash equivalents, while inventories stood at $3.08 billion, reflecting ongoing investment in merchandise availability.
Fiscal 2026 Outlook
Looking ahead, Tractor Supply has projected GAAP earnings per share in the range of $2.13 to $2.23 for fiscal 2026, which sits below the analyst consensus estimate of $2.32. The company expects net sales growth between 4% and 6%, with comparable store sales growing between 1% and 3%. Operating margin rates are forecasted between 9.3% and 9.6%.
Capital expenditures planned for the year are estimated to be between $675 million and $725 million. Additionally, Tractor Supply intends to repurchase stock within a range of $375 million to $450 million, reflecting ongoing confidence in long-term shareholder value despite near-term headwinds.
Expansion efforts will include the opening of approximately 100 new Tractor Supply stores and the continuation of Project Fusion remodels and garden center transformations. The company also aims to complete its 11th distribution center and increase investments in store and digital technologies to enhance operational capabilities and customer engagement.
Market Reaction and Current Positioning
Following the earnings report, the company’s share price dropped by 4.83% to $52.47 at the time of publication, according to market data. The stock’s decline reflects investor concerns over the earnings miss and the outlook indicating tighter margins amid cost pressures.
The challenges currently faced by Tractor Supply highlight the broader environment affecting retail companies, where discretionary spending has contracted and tariff-related costs have increased operational expenses. The company’s ability to manage promotional activities and delivery logistics will be critical in sustaining profitability as it pursues growth initiatives in the upcoming fiscal year.