Dive Brief:
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Tractor Supply missed its own Q4 expectations, as net sales rose 3.3% year on year to $3.9 billion, with comps nearly flat, up just 0.3%.
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Gross margin contracted 10 basis points to 35.1%, as cost cuts were offset by tariffs, promotions and delivery expenses. Net income dropped nearly 4% to $227.4 million.
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For this year, Tractor Supply’s outlook is weaker than analyst forecasts. The retailer expects net sales to rise 4% to 6%, comps to rise 1% to 3%, and net income to reach as high as $1.17 billion.
Dive Insight:
Tractor Supply has won over many new customers in recent years as it has expanded its assortment and its geography. But that may have made it more vulnerable to the pullback on discretionary spending last year.
In Q4 the retailer saw softer-than-expected spending on holiday decor, toys, pet snacks and power tools, which CEO Hal Lawton said “reflected a highly promotional holiday environment combined with softer demand.” Some of those items aren’t a focus of the retailer’s assortment beyond the holidays.
“We believe customers were more selective, and that some discretionary spending shifted towards categories outside of our addressable market in the fourth quarter,” he told analysts during a conference call Thursday morning.
Tractor Supply is holding on to its market share in pets, but is no longer seeing outsize growth in the category, Chief Merchandising Officer Seth Estep told analysts.
Weather greatly impacted results for the whole year, as the retailer benefits from emergency purchases driven by severe weather, and there were fewer powerful hurricanes and weather events in 2025, executives said.
This added up to what Telsey Advisory analysts led by Joseph Feldman called a “lousy” Q4, noting that store traffic and consumer demand both dropped compared to the prior quarter, when comps rose nearly 4% and traffic rose 2.7%.
Tractor Supply is bracing for “a wide range of demand outcomes” this year, Lawton said.
“In our view, the broader environment remains uncertain. With a wide range of potential consumer spending outcomes, we continue to see mixed signals, including an all-time high stock market and a strong projected tax refund season,” he said. “However, that's alongside declining consumer sentiment and a robust national debate around affordability. These dynamics are not unique to Tractor Supply. We believe our needs-based model, strong customer relevance, scale and disciplined execution position us favorably.”
That includes continued expansion of its brick-and-mortar footprint to drive sales growth. Last year the company opened 99 new Tractor Supply stores and one net new Petsense by Tractor Supply store, and is on track to open 100 new locations this year.
