Tractor Supply (TSCO) investor relations material

Executive summary

• Q3 net sales rose 5.1% to $3.91B and comparable sales increased 0.4%; sales momentum strengthened through the quarter.

• Operating income fell 10.2% to $307.7M, net income declined 13.3% to $224.7M, and diluted EPS fell to $0.43 from $0.49.

• FY2026 guidance was reaffirmed; margin recovery, productivity improvements, and more than $75M in incremental SG&A reductions over 2027–2028 remain priorities.

Financial highlights

• Net sales increased 5.1% to $3.91B; comparable sales rose 0.4%, with average ticket up 0.7% and transactions down 0.3%.

• Gross profit rose 2.6% to $1.42B, while gross margin fell 92 bps to 36.4%, pressured by transportation and fuel costs and price-value investments.

• SG&A including depreciation and amortization rose 6.8% to $1.12B; the rate increased 43 bps to 28.6%, reflecting fixed-cost deleverage and distribution-center startup costs.

• Operating income decreased 10.2% to $307.7M; operating margin was 7.9% versus 9.2% a year earlier.

• Net income was $224.7M versus $259.3M, and diluted EPS was $0.43 versus $0.49; the effective tax rate rose to 22.1% from 21.0%.

Outlook and guidance

• FY2026 net sales growth guidance was reaffirmed at 2.5%–3.5%, with comparable sales down 1.0% to flat.

• FY2026 operating margin guidance is 8.0%–8.3%; adjusted operating margin guidance is 8.5%–8.8%.

• FY2026 net income guidance is $930M–$990M; adjusted net income guidance is $990M–$1.05B. Diluted EPS guidance is $1.78–$1.88; adjusted diluted EPS is $1.90–$2.00.

• Q4 comparable sales are expected to improve sequentially, subject to weather and consumer uncertainty; Q4 gross margin is expected to decline 10–30 bps YoY in the base case.

• More than $75M in incremental annualized SG&A reductions is targeted across 2027–2028; management aims to restore operating margin above 9% over time.