Tractor Supply (TSCO) investor relations material

Market environment and business outlook

• Operating in a $225 billion market with 7-8% share, facing stress in core farm/ranch, pet, and home improvement segments over the past 6-12 months.

• Farm/ranch (40% of TAM) and home improvement have been flat to negative; pet segment is stabilizing but challenged by declining dog population.

• Expecting pressures to ease starting in Q4, with strategic actions underway for 2027 and beyond.

• Long-term comp growth historically 3-4%, with a focus on returning to positive transaction growth.

• No 2027 guidance yet, but confidence in business model and ability to adapt to market changes.

Tariff refunds and cost management

• Received $100M-$150M in tariff refunds for 2026, reinvesting two-thirds to offset high fuel and transportation costs.

• Remaining funds used for price investments on key consumables to drive traffic and value perception.

• Gross margin for 2026 expected to be flat or slightly down, with 2026 as the baseline for future planning.

• Vendor negotiations and productivity improvements are key levers to offset future cost pressures.

• Inflation, especially in commodities like corn, could modestly impact pricing if elevated levels persist.

Pricing strategy and investments

• Price investments focused on 50 high-visibility SKUs, especially consumables like feed and shavings.

• Everyday low price positioning maintained, with 1-3% price advantage over competitors on key items.

• Unbeatable Price campaign has improved customer price perception by nearly 200 basis points.

• Sustainability of price investments supported by vendor funds and ongoing cost management.