Earnings release
Page 1
TRACTOR SUPPLY COMPANY REPORTS THIRD QUARTER 2026 FINANCIAL RESULTS;REAFFIRMS FISCAL YEAR 2026 OUTLOOK Brentwood, Tenn., October 22, 2026 - Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the UnitedStates (the “Company”), today reported financial results for its third quarter ended September 26, 2026. Net Sales Increased 5.1% to $3.91 Billion Comparable Store Sales Increased 0.4%, on Top of 3.9% Growth in the Prior-Year’s Quarter Diluted Earnings Per Share (“EPS”) of $0.43 “Our third quarter marked a step forward for Tractor Supply, with improved sales momentum and broader strength across our business. Theactions we are taking around value, pet, digital and convenience gained traction in the quarter. I want to thank our more than 54,000 TeamMembers for their dedication to serving our customers every day. We are moving with urgency to sharpen our strategic priorities, driveproductivity and make deliberate choices about where we invest our capital and resources. These efforts are designed to acceleratecomparable store sales growth, restore operating margins and deliver attractive long-term shareholder returns. Our progress in the quarter andthe actions underway give us confidence in our ability to deliver within our full-year guidance, which we are reaffirming today. As we headinto the fourth quarter, our focus remains on being the dependable supplier our customers count on throughout the winter season,” said HalLawton, President and Chief Executive Officer of Tractor Supply. Third Quarter 2026 ResultsNet sales increased 5.1% to $3.91 billion from $3.72 billion in the third quarter of 2025. The increase in net sales was driven by new storeopenings, the acquisition of VIP Petcare and growth in comparable store sales. Comparable store sales increased 0.4%, compared with anincrease of 3.9% in the prior year’s third quarter, reflecting a 0.7% increase in comparable average ticket and a 0.3% decline in comparableaverage transaction count. Comparable store sales improved sequentially through the quarter, moving from negative in July to modestlypositive in August to further strengthening in September. Results benefited from solid performance in seasonal categories including wildlifesupplies, equine & livestock and truck, tool & hardware. The Company’s consumable, usable and edible categories performed above theCompany average. Double-digit growth in digital sales also contributed to results. These gains were partially offset by continued softness inbig-ticket and companion animal categories. While companion animal continued to perform below the Company average, trends haveimproved steadily since the first quarter. Gross profit increased 2.6% to $1.42 billion from $1.39 billion in the prior year’s third quarter. Gross margin rate was 36.4%, compared to37.4% in the prior year’s third quarter. This decline was primarily attributable to higher transportation and fuel costs and incrementalinvestments to strengthen the Company's price-value position. Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.8% to $1.12 billion from $1.05billion in the prior year’s third quarter. As a percent of net sales, SG&A expenses increased to 28.6% from 28.1% in the third quarter of 2025.The increase in SG&A as a percent of net sales was primarily driven by deleverage from lower comparable store sales and startup costsassociated with the opening of the new distribution center, partially offset by disciplined expense control across the business. Operating income decreased 10.2% to $307.7 million from $342.7 million in the third quarter of 2025.
Page 2
The effective income tax rate was 22.1% compared to 21.0% in the third quarter of 2025, primarily reflecting the lapping of certain taxplanning initiatives in the prior year. Net income decreased 13.3% to $224.7 million from $259.3 million in the third quarter of 2025. Diluted EPS decreased 11.6% to $0.43compared to $0.49 in the third quarter of 2025. The Company repurchased approximately 2.7 million shares of its common stock for $88.5 million and paid quarterly cash dividends totaling$124.9 million, returning a total of $213.4 million of capital to shareholders in the third quarter of 2026. The Company opened 23 new Tractor Supply stores and closed 74 Petsense by Tractor Supply stores, as previously announced, in the thirdquarter of 2026.
Page 3
Fiscal Year 2026 Financial Outlook Tractor Supply is reaffirming its financial outlook for fiscal year 2026. Adjusted operating margin, adjusted net income and adjusted diluted EPS are non-GAAP financial measures that exclude the Petsenseimpairment and VIP Petcare acquisition costs recorded in the second quarter of fiscal year 2026. The Company does not provide areconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation orestimation of reconciling items without unreasonable effort. Net Sales +2.5% to +3.5% Comparable Store Sales (1%) to flat Operating Margin Rate 8.0% to 8.3% Adjusted Operating Margin Rate 8.5% to 8.8% Net Income $930 million to $990 million Adjusted Net Income $990 million to $1.05 billion Earnings per Diluted Share $1.78 to $1.88 Adjusted Earnings per Diluted Share $1.90 to $2.00 Conference Call Information Tractor Supply Company will hold a conference call today, Thursday, October 22, 2026 at 10 a.m. ET. The call will be webcast live atIR.TractorSupply.com. Please allow extra time prior to the call to visit the site and download the streaming media software required to access the webcast. A replay of the webcast will also be available at IR.TractorSupply.com shortly after the call concludes.
Page 4
About Tractor Supply CompanyFor more than 85 years, Tractor Supply Company (NASDAQ: TSCO) has been passionate about serving the needs of recreational farmers,ranchers, homeowners, gardeners, pet enthusiasts and all those who enjoy living Life Out Here. Tractor Supply is the largest rural lifestyleretailer in the U.S., ranking 290 on the Fortune 500. The Company’s more than 54,000 Team Members are known for delivering legendaryservice and helping customers pursue their passions, whether that means being closer to the land, taking care of animals or living a hands-on,DIY lifestyle. In store and online, Tractor Supply provides what customers need – anytime, anywhere, any way they choose at the low pricesthey deserve. As part of the Company’s commitment to caring for animals of all kinds, Tractor Supply is proud to include Petsense by Tractor Supply, a petspecialty retailer, Allivet, a leading online pet and animal pharmacy, and VIP Petcare, the largest provider of mobile veterinary care in theUnited States, in its family of brands. Together, Tractor Supply is able to provide comprehensive solutions for pet care, livestock wellnessand rural living, ensuring customers and their animals thrive. From its stores to the customer’s doorstep, Tractor Supply is here to serve andsupport Life Out Here. As of September 26, 2026, the Company operated 2,486 Tractor Supply stores in 49 states and 135 Petsense by Tractor Supply stores in 21states. For more information, visit www.tractorsupply.com and www.Petsense.com. ###
Page 5
Forward-Looking Statements This press release contains certain forward-looking statements, including statements regarding value creation, customer trends, new storesand distribution centers, store closures, return of capital, productivity and cost reduction initiatives and their expected benefits, operatingmargin improvement, and financial guidance for fiscal 2026, including net sales, comparable store sales, operating margin rates, adjustedoperating margin rates, net income, adjusted net income, earnings per diluted share and adjusted earnings per diluted share. All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, are subject to thefinalization of the Company’s quarterly financial and accounting procedures, and may be affected by certain risks and uncertainties, any one,or a combination, of which could materially affect the results of the Company’s operations. Forward-looking statements are usually identifiedby or are associated with such words as “will,” “intend,” “would,” “expect,” “continue,” “believe,” “anticipate,” “optimistic,” “forecasted”and similar terminology. Actual results could vary materially from the expectations reflected in these statements. As with any business, allphases of our operations are subject to factors outside of our control. These factors include, without limitation, the impact of the recent andpotential future tariff announcements and the corresponding macroeconomic pressures and those factors discussed in the “Risk Factors”section of the Company’s Annual Reports on Form 10-K and other filings with the Securities and Exchange Commission. Forward-lookingstatements made by or on behalf of the Company are based on knowledge of its business and the environment in which it operates, butbecause of the factors listed above, actual results could differ materially from those reflected by any forward-looking statements.Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’smost recent Annual Report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission.There can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, thatthey will have the expected consequences to or effects on the Company or its business and operations. Readers are cautioned not to placeundue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligationto release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect theoccurrence of unanticipated events, except as required by law.
Page 6
(Financial tables to follow)
Page 7
Consolidated Statements of Income (Unaudited) (in thousands, except per share and percentage data) For the Fiscal Three For the Fiscal Nine Months Ended Months Ended September 26, 2026 September 27, 2025 September 26, 2026 September 27, 2025 % of % of % of % of Net Net Net Net Sales Sales Sales Sales Net sales $ 3,910,455 100.00% $ 3,719,044 100.00% $12,043,815 100.00% $11,625,726 100.00% Cost of merchandise sold 2,485,510 63.56 2,329,812 62.65 7,635,076 63.39 7,341,097 63.15 Gross profit 1,424,945 36.44 1,389,232 37.35 4,408,739 36.61 4,284,629 36.85 Selling, general and administrative expenses 984,288 25.17 922,454 24.80 2,947,340 24.47 2,748,723 23.64 Depreciation and amortization 132,928 3.40 124,069 3.34 390,377 3.24 366,248 3.15 Impairment expense — — — — 62,747 0.52 — — Operating income 307,729 7.87 342,709 9.21 1,008,275 8.37 1,169,658 10.06 Interest expense, net 19,387 0.50 14,667 0.39 55,598 0.46 52,291 0.45 Income before income taxes 288,342 7.37 328,042 8.82 952,677 7.91 1,117,367 9.61 Income tax expense 63,671 1.63 68,774 1.85 202,767 1.68 248,687 2.14 Net income $ 224,671 5.75% $ 259,268 6.97% $ 749,910 6.23% $ 868,680 7.47% Net income per share - basic $ 0.43 $ 0.49 $ 1.43 $ 1.64 Net income per share - diluted $ 0.43 $ 0.49 $ 1.43 $ 1.63 Weighted average shares outstanding: Basic 520,623 529,742 523,667 530,601 Diluted 521,502 532,143 524,858 532,816 Dividends declared per common share outstanding $ 0.24 $ 0.23 $ 0.72 $ 0.69 Note: Percent of net sales amounts may not sum to totals due to rounding.
Page 8
Consolidated Statements of Comprehensive Income (Unaudited) (in thousands) For the Fiscal Three For the Fiscal Nine Months Ended Months Ended September 26, 2026 September 27, 2025 September 26, 2026 September 27, 2025 Net income $ 224,671 $ 259,268 $ 749,910 $ 868,680 Other comprehensive loss: Change in fair value of interest rate swaps, net of taxes — — — (1,217) Total other comprehensive loss — — — (1,217) Total comprehensive income $ 224,671 $ 259,268 $ 749,910 $ 867,463
Page 9
Consolidated Balance Sheets (Unaudited)(in thousands) September 26, 2026 September 27, 2025 ASSETS Current assets: Cash and cash equivalents $ 198,876 $ 184,639 Inventories 3,618,755 3,252,825 Prepaid expenses and other current assets 218,284 209,652 Income taxes receivable 195,592 — Total current assets 4,231,507 3,647,116 Property and equipment, net 3,227,503 3,018,254 Operating lease right-of-use assets 4,220,106 3,743,029 Goodwill and other intangible assets 501,399 399,297 Other assets 71,128 68,906 Total assets $ 12,251,643 $ 10,876,602 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,659,871 $ 1,549,176 Accrued employee compensation 55,948 56,431 Other accrued expenses 874,794 734,405 Current portion of finance lease liabilities 10,643 4,512 Current portion of operating lease liabilities 468,427 416,922 Income taxes payable — 40,856 Total current liabilities 3,069,683 2,802,302 Long-term debt 2,230,324 1,744,223 Finance lease liabilities, less current portion 47,350 28,950 Operating lease liabilities, less current portion 3,963,390 3,527,699 Deferred income taxes 110,479 53,288 Other long-term liabilities 169,886 146,955 Total liabilities 9,591,112 8,303,417 Stockholders’ equity: Common stock 7,138 7,127 Additional paid-in capital 1,492,423 1,420,706 Treasury stock (6,731,108) (6,267,791) Retained earnings 7,892,078 7,413,143 Total stockholders’ equity 2,660,531 2,573,185 Total liabilities and stockholders’ equity $ 12,251,643 $ 10,876,602
Page 10
Consolidated Statements of Cash Flows (Unaudited)(in thousands) For the Fiscal Nine Months Ended September 26, 2026 September 27, 2025 Cash flows from operating activities: Net income $ 749,910 $ 868,680 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 390,377 366,248 Impairment expense 62,747 — Gain on disposition of property and equipment (81,839) (66,046) Share-based compensation expense 48,782 41,290 Deferred income taxes 7,223 16,756 Change in assets and liabilities: Inventories (529,780) (394,426) Prepaid expenses and other current assets (10,540) (8,357) Accounts payable 262,079 301,773 Accrued employee compensation (58,893) (44,722) Other accrued expenses 215,068 109,973 Income taxes (168,548) 57,818 Other (3,968) 61,438 Net cash provided by operating activities 882,618 1,310,425 Cash flows from investing activities: Capital expenditures (651,637) (629,213) Proceeds from sale of property and equipment 160,098 92,238 Acquisition of VIP Petcare, net of cash acquired (129,838) — Acquisition of Allivet, net of cash acquired — (139,895) Net cash used in investing activities (621,377) (676,870) Cash flows from financing activities: Borrowings under debt facilities 4,860,000 2,190,000 Repayments under debt facilities (4,390,000) (2,280,000) Debt issuance costs (7,010) — Principal payments under finance lease liabilities (2,185) (3,048) Repurchase of shares to satisfy tax obligations (14,980) (15,696) Repurchase of common stock (342,704) (244,010) Net proceeds from issuance of common stock 17,362 18,591 Cash dividends paid to stockholders (376,957) (366,244) Net cash used in financing activities (256,474) (700,407) Net increase (decrease) in cash and cash equivalents 4,767 (66,852) Cash and cash equivalents at beginning of period 194,109 251,491 Cash and cash equivalents at end of period $ 198,876 $ 184,639
Page 11
Selected Financial and Operating Information (Unaudited) For the Fiscal Three For the Fiscal Nine Months Ended Months Ended September 26, 2026 September 27, 2025 September 26, 2026 September 27, 2025 Sales Information: Comparable store sales increase/(decrease) 0.4 % 3.9 % (0.3)% 1.5 % New store sales (% of total sales) 4.4 % 3.1 % 3.7 % 2.9 % Average transaction value $59.77 $59.48 $60.54 $60.18 Comparable store average transaction value increase/(decrease) 0.7 % 1.2 % 0.8 % (0.3)% Comparable store average transaction count increase/(decrease) (0.3)% 2.7 % (1.0)% 1.9 % Total selling square footage (000’s) 41,849 40,253 41,849 40,253 Owned Brands and Exclusive Product Categories (% of total sales) 30.4 % 29.5 % 30.3 % 29.6 % Imports (% of total sales) 10.4 % 9.8 % 10.6 % 10.7 % Store Count Information: Tractor Supply Beginning of period 2,463 2,335 2,395 2,296 New stores opened 23 29 91 68 Stores closed — — — — End of period 2,486 2,364 2,486 2,364 Petsense by Tractor Supply Beginning of period 209 207 207 206 New stores opened — — 3 4 Stores closed (74) (1) (75) (4) End of period 135 206 135 206 Consolidated end of period 2,621 2,570 2,621 2,570 Pre-opening costs (000’s) $2,561 $5,510 $10,335 $12,786 Balance Sheet Information: Average inventory per store (000’s) $1,290.8 $1,231.9 $1,290.8 $1,231.9 Inventory turns (annualized) 2.92 3.06 3.08 3.24 Share repurchase program: Cost (000’s) $89,236 $75,904 $344,879 $242,553 Average purchase price per share $32.66 $59.32 $38.37 $54.73 (a) Comparable store average transaction value changes include the impact of transaction value changes achieved on the current period change in transaction count.(b) Beginning in the fourth quarter of the fiscal year ended December 27, 2025, the metric of exclusive brands as a percentage of total sales, which historically included only Tractor SupplyOwned Brands, was revised to include both Tractor Supply Owned Brands and Exclusive Product Categories as a percentage of total sales. Prior period amounts have been recast to conform tothe current year presentation.(c) Assumes average inventory cost, excluding inventory in transit. Prior year average inventory per store amounts have been recast to exclude the impact of both inventory and store count for the74 Petsense stores closed during the fiscal period ending September 26, 2026.(d) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchasesrepresent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock. (a) (b) (c) (d) Note: Comparable store metrics percentages may not sum to total due to rounding.
Page 12
For the Fiscal Three For the Fiscal Nine Months Ended Months Ended September 26,2026 September 27,2025 September 26,2026 September 27,2025 Capital Expenditures (in millions): New stores, relocated stores and stores not yet opened $ 74.0 $ 126.7 $ 259.2 $ 271.5 Existing stores 76.0 64.3 199.7 165.7 Information technology 43.9 44.9 117.3 113.7 Distribution center capacity and improvements 21.1 40.0 73.8 71.6 Corporate and other 0.9 1.7 1.6 6.7 Total $ 215.9 $ 277.6 $ 651.6 $ 629.2
Page 13
Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S.GAAP). The Company also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by U.S. GAAP. Therefore, theCompany’s non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented inaccordance with U.S. GAAP. The Company believes this information is useful in providing period-to-period comparisons of the results of our continuing operations. Reconciliation of Non-GAAP Financial Measures (Unaudited) (in thousands, except per share and percentage data) For the Fiscal Nine Months Ended September 26, 2026 Impairment andAcquisition Costs September 26, 2026 (As Reported) (Adjustment) (As Adjusted) % of % of % of Net Net Net Sales Sales Sales Cost of merchandise sold $ 7,635,076 63.39% $ (5,926) (0.05)% $ 7,629,150 63.34% Gross profit $ 4,408,739 36.61% $ 5,926 0.05% $ 4,414,665 36.66% Selling, general and administrative expenses (includingdepreciation, amortization, and impairment expense) $ 3,400,464 28.23% $ (75,291) (0.63)% $ 3,325,173 27.61% Operating income $ 1,008,275 8.37% $ 81,217 0.67% $ 1,089,492 9.05% Income before income taxes $ 952,677 7.91% $ 81,217 0.67% $ 1,033,894 8.58% Income tax expense $ 202,767 1.68% $ 18,433 0.15% $ 221,200 1.84% Net income $ 749,910 6.23% $ 62,784 0.52% $ 812,694 6.75% Diluted net income per share $ 1.43 $ 0.12 $ 1.55 (a) Impairment and Acquisition Costs are comprised of $5.9 million in inventory impairment charges, $33.2 million in goodwill and intangible asset impairment charges, $32.6 million in otherimpairment and restructuring charges, and $9.5 million in acquisition costs. (a)