Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, has released its financial results for the fourth quarter and full fiscal year ended December 27, 2025. Despite facing shifting consumer spending patterns and softer demand in discretionary categories, the Company delivered steady revenue growth, expanded its store footprint, and strengthened its long-term strategic foundation. Tractor Supply also provided forward-looking guidance for fiscal 2026, forecasting continued sales growth and improved earnings performance.
Fourth Quarter 2025 Performance Highlights
During the fourth quarter of fiscal 2025, Tractor Supply reported net sales of $3.90 billion, representing a 3.3% increase from $3.77 billion in the same quarter of the prior year. The sales growth was primarily fueled by new store openings, modest gains in comparable store sales, and contributions from Allivet, the Company’s pet pharmacy acquisition.
Comparable store sales increased 0.3%, slightly below the 0.6% increase recorded in the prior year’s fourth quarter. This growth was driven mainly by a 0.3% rise in average ticket size, reflecting continued customer spending in essential product categories. Demand for consumable, usable, and edible products remained resilient, although this was partially offset by weaker discretionary spending and a decline in emergency-response-related purchases that had bolstered results in previous periods.
Gross profit for the quarter rose 3.0% to $1.37 billion, up from $1.33 billion in the prior year. However, the gross margin rate edged down slightly to 35.1%, compared to 35.2% a year earlier. This marginal decline was largely due to higher tariffs, increased promotional activity, and elevated transportation and delivery costs. These pressures were partially mitigated by ongoing cost management efforts and operational efficiencies.
Selling, general, and administrative (SG&A) expenses—including depreciation and amortization—increased 6.0% to $1.07 billion, up from $1.01 billion in the prior year’s quarter. As a percentage of net sales, SG&A expenses climbed to 27.5%, compared to 26.8% previously. The increase reflects continued investments in strategic initiatives, including store enhancements, digital capabilities, and infrastructure improvements, alongside fixed cost deleverage caused by modest comparable store sales growth. The Company noted that disciplined productivity efforts and cost control measures helped partially offset these expense increases.
Operating income for the quarter declined 6.5% to $297.7 million, compared to $318.3 million in the fourth quarter of 2024. The effective income tax rate improved to 19.0%, down from 21.5% in the prior year, largely due to the timing of tax planning initiatives.
Net income totaled $227.4 million, reflecting a 3.8% decrease from $236.4 million in the prior year’s quarter. Diluted earnings per share (EPS) fell 2.7% to $0.43, compared to $0.44 in the same period of 2024.
Capital Allocation and Store Expansion in Q4
Tractor Supply continued its shareholder return strategy in the fourth quarter by repurchasing approximately 2.2 million shares of common stock for $117.5 million. Additionally, the Company paid quarterly cash dividends totaling $121.4 million, bringing total capital returned to shareholders during the quarter to $238.9 million.
From an expansion standpoint, Tractor Supply opened 31 new Tractor Supply stores and one new Petsense by Tractor Supply store during the quarter, reinforcing its commitment to growing its retail footprint and serving rural and suburban communities.
Fiscal Year 2025 Performance Overview
For the full fiscal year 2025, Tractor Supply reported net sales of $15.52 billion, marking a 4.3% increase from $14.88 billion in fiscal 2024. Growth was primarily driven by continued new store openings and a 1.2% increase in comparable store sales, demonstrating stable consumer engagement despite economic uncertainty.
Gross profit for the year climbed 4.8% to $5.65 billion, up from $5.40 billion in fiscal 2024. The gross margin rate improved slightly to 36.4%, compared to 36.3% in the prior year, reflecting effective pricing strategies and operational efficiencies.
SG&A expenses rose 6.6% to $4.19 billion, compared to $3.93 billion in fiscal 2024. As a percentage of net sales, SG&A expenses increased to 27.0%, up from 26.4% the prior year. The rise was attributed to investments supporting store expansion, digital initiatives, supply chain enhancements, and new service offerings such as Direct Sales and Final Mile delivery.
Operating income for fiscal 2025 remained steady at $1.47 billion, essentially flat compared to fiscal 2024, indicating the Company’s ability to balance rising costs with sustained revenue growth.
The effective income tax rate declined slightly to 21.6%, down from 22.1% in fiscal 2024. Net income totaled $1.10 billion, remaining largely unchanged year-over-year. Diluted EPS increased modestly by 0.9% to $2.06, compared to $2.04 in fiscal 2024, reflecting disciplined capital management and share repurchases.
Shareholder Returns and Retail Footprint Growth in 2025
Throughout fiscal 2025, Tractor Supply repurchased approximately 6.6 million shares of its common stock for $360.8 million. The Company also paid $487.7 million in cash dividends, returning a total of $848.5 million of capital to shareholders for the year.
In terms of retail expansion, Tractor Supply opened 99 new Tractor Supply stores and five new Petsense by Tractor Supply stores, while closing four Petsense locations as part of its portfolio optimization strategy. These moves align with the Company’s broader objective to refine its store network while expanding in high-potential markets.
Leadership Commentary and Strategic Outlook
Hal Lawton, President and Chief Executive Officer of Tractor Supply Company, acknowledged that fourth quarter results fell below internal expectations due to shifting consumer behavior. Customers prioritized essential purchases while discretionary spending softened, creating pressure on certain product categories. Despite these challenges, Lawton praised the Company’s more than 52,000 team members for maintaining strong operational execution across stores, distribution centers, and corporate support functions.
Lawton emphasized that fiscal 2025 represented a year of meaningful progress. The Company continued to gain market share within the farm and ranch segment, expanded its store base, and advanced key strategic initiatives such as Project Fusion and localization efforts. Tractor Supply also strengthened capabilities supporting Direct Sales, Final Mile delivery, and pet and animal prescription services, positioning the Company for long-term omnichannel growth.
Looking ahead to fiscal 2026, Tractor Supply plans to operate with discipline across a range of potential economic conditions. With much of its strategic groundwork now in place, the Company remains focused on executing its “Life Out Here 2030” strategy—aimed at enhancing customer engagement, improving operational consistency, and driving sustainable growth.
Fiscal 2026 Guidance
Tractor Supply provided guidance for fiscal year 2026, projecting net sales growth of 4% to 6%. The Company expects diluted earnings per share to range between $2.13 and $2.23, reflecting continued revenue expansion, disciplined cost management, and ongoing shareholder value creation.
Source Link:https://www.businesswire.com/
