Dive Brief:
- Tractor Supply on Thursday reported that Q2 net sales rose 4.5% year over year to $4.4 billion, with store comps up 1.5% — the retailer’s “largest sales quarter ever,” CEO Hal Lawton told analysts. A year ago, the company saw comps drop 0.5%.
- Gross margin expanded to 36.9% from 36.6% last year, as net income rose 1.1% to $430 million. The company reaffirmed its full-year outlook, saying it expects net sales to rise 4% to 8%, comps to be flat or rise as much as 4% and net income to land between $1.07 billion and $1.17 billion.
- In Q2 the retailer opened 24 new Tractor Supply stores and two under the Petsense by Tractor Supply banner, and closed one Petsense by Tractor Supply location. The plan is to open 100 new stores in 2026, with the help of the recent acquisition of 18 Big Lots locations, executives said Thursday.
Dive Insight:
Chickens delivered for Tractor Supply in the second quarter.
The retailer’s annual “chick days” helped spur “record sales of live birds,” along with coops and related supplies.
“More customers than ever are turning to backyard poultry,” CEO Hal Lawton told analysts, calling this year’s sales event the “most successful to date,” with “strong growth across both new and existing customers.”
The topline strength was broad, however. Comparable store sales growth in the period was driven by year-round categories, especially consumable, usable and edible products, plus strength in seasonal spring goods, apparel, gifts, décor and big ticket items. That was partially offset by softness in some discretionary categories, Lawton said.
The turnabout in comparable sales strength is expected to continue for the rest of the year, executives told analysts.
“‘Life out here’ is doing very well,” Lawton said, referring to the company’s tagline.
Executives acknowledged some challenges, including economic uncertainty and tariffs, though Telsey Advisory Group analysts led by Joseph Feldman noted that most of Tractor Supply’s assortment is sourced domestically, with about 12% direct imports. More broadly, Tractor Supply’s growth will be fueled by new store openings, store remodels, garden centers, its focus on pets, the loyalty program, retail media business, greater private brand penetration, enhanced final mile delivery and the direct sales business, Feldman said.
“Overall, we remain confident in Tractor Supply's long-term strategy for Life Out Here 2030, which should drive long-term annual comp growth of 3%-5% and [earnings per share] growth of 8%-11%,” Feldman said.
