Weak May Was the Culprit: Tractor Supply Says Long-Term Demand Is Intact

Tractor Supply Co. (NASDAQ:TSCO) stock rose in premarket trading Thursday despite the rural lifestyle retailer reporting second-quarter results that missed Wall Street estimates and lowering its full-year sales and earnings outlook, as investors looked past a modest earnings miss.

The company reported adjusted earnings of 81 cents per share, missing the analyst consensus estimate of 82 cents, according to Benzinga Pro. Revenue rose 2.3% year over year to $4.541 billion but fell short of the $4.580 billion consensus estimate.

Second-Quarter Sales Miss Expectations

Comparable store sales declined 1.5%, reversing a 1.5% increase a year earlier. Tractor Supply said positive comparable sales in April and June were more than offset by unusually weak demand in May, as seasonal and discretionary categories softened.

Consumable categories remained resilient, while companion animal sales continued to lag despite improving trends through the quarter.

Margins, Expenses And Profitability

Gross profit increased 2.6% to $1.68 billion, while gross margin expanded to 37.1% from 36.9% a year earlier. The quarter included a $5.9 million inventory write-down tied to the planned closure of about 75 Petsense stores.

Selling, general and administrative expenses rose 14.4% to $1.22 billion, reflecting $65.8 million of Petsense impairment and restructuring charges and $9.5 million of acquisition costs related to VIP Petcare.

Net income fell 16.1% to $360.7 million, while GAAP diluted earnings per share declined to 69 cents from 81 cents a year earlier. Adjusted net income totaled $423.5 million, or 81 cents per diluted share.

Cash and cash equivalents stood at $231.6 million at the end of the quarter, up from $225.8 million a year earlier.

Store Expansion And Capital Returns

During the quarter, Tractor Supply opened 28 new Tractor Supply stores and three Petsense by Tractor Supply locations and returned $260.9 million to shareholders through dividends and share repurchases.

CEO Highlights Customer Demand Trends

President and CEO Hal Lawton said adverse conditions in May weighed on quarterly performance but maintained that the company’s core customer remains engaged and that long-term demand drivers remain intact.

He said Tractor Supply is strengthening its companion animal business, reinforcing its value proposition and improving productivity to support future growth.

2026 Outlook Cut

For fiscal 2026, Tractor Supply forecast adjusted earnings of $1.90 to $2.00 per share, below the analyst consensus estimate of $2.05.

The company also reduced its GAAP earnings outlook to $1.78 to $1.88 per share from $2.13 to $2.23 and cut expected net sales to a range of $15.912 billion to $16.067 billion from its previous forecast of $16.145 billion to $16.455 billion.

TSCO Price Action: Tractor Supply shares were up 4.56% at $30.70 during premarket trading on Thursday, according to Benzinga Pro data.

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