This is an old version of TSCO from 13 days ago (Oct 31, 2026).See the latest version
TSCO
- Price
- $33.94
- Discount category
- Below intrinsic value
- Next earnings
- Jan 22, 2027
- Next earnings is estimate
- Yes
- Company name
- Tractor Supply
- Sector
- Specialty retail
- About
- Tractor Supply is the largest rural lifestyle retailer in the US. At September 26, 2026, it ran 2,486 Tractor Supply stores in 49 states and 135 Petsense pet stores. It sells to hobby farmers, ranchers, homeowners, gardeners and pet owners. In the first half of 2026, livestock, equine and farm products such as feed, poultry and fencing gave 31% of net sales, seasonal and recreation products such as lawn and garden and power equipment 23%, companion animal products 23%, truck, tool and hardware 15%, and clothing and gifts 8%. Many of these products, such as feed and pet food, are needs-based goods that customers buy again and again. It also owns Allivet, an online pet pharmacy, and since May 2026 VIP Petcare, the largest provider of mobile veterinary clinics in the US. Tractor Supply makes money from the margin on the goods it sells, and it opens new stores each year.
- Thesis
- The market prices Tractor Supply lower because its growth stalled and management cut its plans. Comparable store sales fell 1.5% in Q2 2026 because fewer customers came to the stores. On July 23, 2026, the company cut its 2026 outlook for comparable store sales to minus 1% to flat, from growth of 1% to 3%, and it cut adjusted EPS to $1.90 to $2.00. It also withdrew the long-term financial targets from its December 2024 Investor Day and closed 74 Petsense stores. In Q3 2026, comparable store sales grew only 0.4%, transactions fell 0.3%, and gross margin fell to 36.4% from 37.4% because of higher freight and fuel costs and price investments. Investors now doubt that the store growth and the pet business can lift profit as planned. For the gap to close, three things must be true. Comparable store sales must keep growing, with more transactions, in Q4 2026 and in 2027. The companion animal business, with the new VIP Petcare clinics, must grow at least at the company average; in Q3 2026 it still grew less. The new long-term framework with the Q4 2026 report must show a credible path back to profit growth and stable margins. The next test is the Q4 2026 report with the new framework, expected in late January 2027. If these checks pass, the gap can close over the next four to six quarters. The main risk is that weak spending on discretionary and big-ticket items and higher costs last into 2027.
- Risks
- Fewer customers come to the stores. Comparable transactions fell 1.7% in Q2 2026 and 0.3% in Q3 2026, and big-ticket and discretionary items sold poorly. If rural consumers keep cutting this spend, sales and margins can fall more. Companion animal products give about 23% of net sales, and their sales grew less than the company average in the first nine months of 2026. The Petsense restructuring and the VIP Petcare purchase must work to win back pet owners. Management withdrew its long-term targets in July 2026 and will give new ones only with the Q4 2026 report. Some leaders changed roles after the Chief Technology Officer left in August 2026. Investors have no clear plan until early 2027. Tariffs, freight and fuel costs can raise costs. In Q3 2026, gross margin fell to 36.4% from 37.4% because of higher transportation and fuel costs and price investments. Long-term debt was $2.23 billion at September 26, 2026, against $1.78 billion at December 27, 2025, because the company borrowed more while it bought back shares. The amount is small compared with its operating income.
- Balance sheet
- Cash: $199M Debt: $2.2B Net debt: $2.0B Interest cover: 18× Debt due within 12 months: $0.0M Tractor Supply funds itself with unsecured senior notes and a revolving credit facility. At September 26, 2026, long-term debt on the balance sheet was $2,230.3 million. It includes $750 million of 5.25% notes due 2033, $650 million of 1.75% notes due 2030, $500 million of 5.200% notes due 2032, issued on August 25, 2026, and $150 million of 3.70% notes due 2029. The rest is mostly borrowings under the revolving credit facility, which allows up to $1.30 billion since its amendment on May 19, 2026. The Q3 release does not give the drawn amount, and the 10-Q for Q3 2026 was not filed on October 27, 2026. Debt does not include operating lease liabilities of $4,431.8 million for the leased stores. Interest cover is operating income of $1,008.3 million divided by net interest expense of $55.6 million for the first nine months of 2026. Operating cash flow was $882.6 million in the first nine months of 2026, against $1,310.4 million a year earlier, mostly because inventories and income tax payments rose. In Q3 2026, the company bought back 2.7 million shares for $88.5 million and paid $124.9 million of dividends, and it pays $0.24 per share each quarter. As of Sep 26, 2026.
- Checkpoints
- Oct 22, 2026: Q3 2026 results: comparable store sales. Failed. Watch: Positive comparable store sales with more transactions and a kept 2026 outlook pass; a further cut to the outlook fails. Outcome: Comparable store sales grew 0.4% and the 2026 outlook stayed the same, but transactions fell 0.3%, and the test asked for more transactions. Jan 22, 2027 (estimate): Q4 2026 results and new long-term framework. Pending. Watch: A framework with comparable sales growth and margin targets near the old ones passes; much lower growth targets fail.
- Recent events
- Oct 22, 2026: Tractor Supply reported Q3 2026 results. Net sales grew 5.1% to $3.91 billion, and comparable store sales grew 0.4%, with 0.3% fewer transactions. Comparable sales improved in each month of the quarter. Gross margin fell to 36.4% from 37.4%, and operating income fell 10.2% to $307.7 million. Diluted EPS was $0.43. The company closed 74 Petsense stores and kept its 2026 outlook, with adjusted EPS of $1.90 to $2.00. Oct 9, 2026: Tractor Supply said that it will report Q3 2026 results before the market opens on October 22, 2026, with a call at 10 a.m. ET. Aug 25, 2026: Tractor Supply issued $500 million of 5.200% senior notes due 2032. It uses the money to repay borrowings under its revolving credit facility. Aug 3, 2026: Robert Mills, the Chief Technology Officer who also led digital and pet services, resigned from August 7, 2026. Seth Estep, the Chief Merchandising Officer, took over Allivet and VIP Petcare, and John Ordus, the Chief Stores Officer, took over Petsense. Jul 23, 2026: Tractor Supply reported Q2 2026 results. Net sales grew 2.3% to $4.54 billion, but comparable store sales fell 1.5%, with 1.7% fewer transactions. Adjusted EPS was $0.81. It recorded $65.8 million of charges to restructure Petsense, with about 75 store closures. It cut its 2026 outlook to adjusted EPS of $1.90 to $2.00 and withdrew its long-term financial framework. It will give a new framework with its Q4 2026 report. May 28, 2026: Tractor Supply bought VIP Petcare from PetIQ for $133.8 million. VIP Petcare runs community veterinary clinics in about 2,700 retail locations, including 1,700 Tractor Supply stores, and serves more than one million pets each year. May 19, 2026: Tractor Supply amended its senior credit facility, with a $1.30 billion revolving credit line. Apr 21, 2026: Tractor Supply reported Q1 2026 results. Net sales grew 3.6% to $3.59 billion, and comparable store sales grew 0.5%. Diluted EPS was $0.31. It kept its 2026 outlook of 1% to 3% comparable store sales growth and diluted EPS of $2.13 to $2.23.