Tractor Supply (TSCO) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 rose 2.1% year-over-year to $3.47 billion, driven by new store openings and the Allivet acquisition, but offset by a 0.9% decrease in comparable store sales.

• Net income declined 9.5% to $179.4 million, with diluted EPS at $0.34, reflecting margin pressures and planned growth investments.

• Gross margin improved by 25 basis points to 36.2% due to disciplined cost management and low price strategy.

• Customer engagement remained high, with record retention, positive new customer counts, and over 40 million enrolled in Neighbor's Club.

• Over 600 garden centers operational, supporting growth in consumable, usable, and edible categories.

Financial highlights

• Comparable store sales declined 0.9%, with a 2.1% increase in transaction count but a 2.9% decrease in average ticket.

• SG&A expense rate rose to 29.0% of net sales, mainly due to planned growth investments and fixed cost deleverage.

• Operating income fell 5.3% to $249.1 million; operating margin decreased to 7.2% year-over-year.

• Cash flow from operations was $216.8 million, down from $257.4 million in Q1 2024.

• Merchandise inventories ended at $3.2 billion, up 1.5% per store; average inventory per store increased to $1.20 million.

Outlook and guidance

• Fiscal 2025 net sales growth guidance updated to 4%-8%, with comparable store sales expected between 0% and 4%, and operating margin rate forecasted at 9.5%-9.9%.

• Net income expected between $1.07 billion and $1.17 billion; diluted EPS guidance set at $2.00-$2.18.

• Q2 2025 guidance: net sales growth of 3%-4%, flat to +1% comparable store sales, and EPS of $0.79-$0.81.

• Projected 2025 capital expenditures (net of sale-leaseback proceeds) are $650–$725 million, including plans for 90 new Tractor Supply stores and 10 new Petsense stores.

• Guidance reflects ongoing tariff uncertainties, persistent big ticket pressure, and macroeconomic risks.