TSCO Q3 net sales rise 5.1% as company reaffirms fiscal 2026 outlook

Tractor Supply Company (NASDAQ: TSCO) reported third-quarter net sales of $3.91 billion, a 5.1% increase from $3.72 billion in the prior-year period, while reaffirming its fiscal year 2026 financial outlook. The company, which operated 2,486 Tractor Supply stores and 135 Petsense by Tractor Supply stores as of September 26, 2026, attributed the sales growth to new store openings, the VIP Petcare acquisition, and comparable store sales growth.

Comparable store sales rose 0.4% in the quarter, a significant slowdown from the 3.9% increase recorded in the third quarter of 2025. This modest gain reflected a 0.7% increase in comparable average ticket partially offset by a 0.3% decline in transaction count. Company executives noted that comparable store sales improved sequentially through the quarter, moving from negative territory in July to modestly positive in August and further strengthening in September.

Product mix drove the top-line performance, with solid results in seasonal categories including wildlife supplies, equine and livestock, and truck, tool and hardware. Consumable, usable, and edible categories outperformed the company average, and digital sales posted double-digit growth. These gains were partially offset by continued softness in big-ticket and companion animal categories, though companion animal trends have improved steadily since the first quarter.

Margins contracted under the weight of higher costs and strategic investments. Gross profit increased 2.6% to $1.42 billion, but the gross margin rate fell to 36.4% from 37.4% in the prior-year quarter. The company cited higher transportation and fuel costs, along with incremental investments to strengthen its price-value position, as primary drivers for the decline. Selling, general and administrative expenses rose 6.8% to $1.12 billion, increasing to 28.6% of net sales from 28.1%. This deleverage was driven by lower comparable store sales and startup costs associated with a new distribution center opening.

Operating income decreased 10.2% to $307.7 million from $342.7 million in the third quarter of 2025. Net income fell 13.3% to $224.7 million from $259.3 million, resulting in diluted earnings per share of $0.43, down 11.6% from $0.49 a year earlier. The effective income tax rate increased to 22.1% from 21.0%, primarily reflecting the lapping of tax planning initiatives from the prior year.

In store operations during the quarter, Tractor Supply opened 23 new stores and closed 74 Petsense by Tractor Supply locations, as previously announced. The company returned $213.4 million to shareholders by repurchasing approximately 2.7 million shares of common stock for $88.5 million and paying quarterly cash dividends totaling $124.9 million.

For fiscal year 2026, Tractor Supply reaffirmed its guidance, projecting net sales growth of 2.5% to 3.5% and comparable store sales between negative 1% and flat. The company expects an operating margin rate of 8.0% to 8.3% and an adjusted operating margin rate of 8.5% to 8.8%. Net income is guided to range between $930 million and $990 million, while adjusted net income is projected at $990 million to $1.05 billion.