Tractor Supply (TSCO) Q3 2026 earnings summary

Executive summary

• Q3 net sales rose 5.1% to $3.91B; comparable sales increased 0.4%, improving from negative in July to stronger positive trends in September.

• Net income fell 13.3% to $224.7M and diluted EPS declined to $0.43 from $0.49 as margin pressure weighed on earnings.

• FY2026 guidance was reaffirmed; priorities include restoring margins, improving productivity, and targeting >$75M in incremental SG&A reductions across 2027–2028.

Financial highlights

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

• Gross profit rose 2.6% to $1.42B; gross margin fell to 36.4% from 37.4%, pressured by transportation costs and price-value investments.

• Operating income decreased 10.2% to $307.7M; operating margin was 7.9% versus 9.2%. SG&A was $1.12B, or 28.6% of sales versus 28.1%.

• Net income was $224.7M versus $259.3M, and diluted EPS was $0.43 versus $0.49.

• Tariff refunds included ~$70M recognized in Q2, $15M in Q3, and $15M expected in Q4, from an approximately $100M full-year benefit.

Outlook and guidance

• FY2026 guidance reaffirmed: net sales growth 2.5%–3.5%, comparable sales down 1.0% to flat, and operating margin 8.0%–8.3% (adjusted: 8.5%–8.8%).

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

• Q4 comps 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.

• Nampa DC benefits are expected to contribute 15–20 bps in Q4. Management aims to restore operating margin above 9% over time, with 2027 guidance expected on the next call.

• Depreciation growth is expected to moderate to mid-single digits or lower in 2027, versus 7% in 2026; vendor agreements are expected to provide >$50M in annualized benefits next year.