Tractor Supply Comparable Sales Turn Positive After Second-Quarter Drop

The Tip Desk · October 22, 2026 · 4 min read

Net sales rose 5.1% to $3.91 billion as the company reaffirmed fiscal 2026 guidance after a July update.

Tractor Supply Company (TSCO), the largest rural lifestyle retailer in the United States, reported comparable store sales of 0.4% for the third quarter ended September 26, 2026, after a 1.5% decline in the second quarter.

The sequential turn was the quarter’s defining shift. A year earlier, comparable sales had risen 3.9%. The company said comparable average ticket increased 0.7% and comparable average transaction count declined 0.3%. Comparable store sales improved through the quarter, moving from negative in July to modestly positive in August and further strengthening in September.

Net sales increased 5.1% to $3.91 billion from $3.72 billion in the third quarter of 2025, a faster year-over-year pace than the 2.3% increase to $4.54 billion in the second quarter. The company said the increase was driven by new store openings, the acquisition of VIP Petcare and growth in comparable store sales. New-store sales accounted for 4.4% of total sales.

President and Chief Executive Officer Hal Lawton said the quarter marked a step forward, with improved sales momentum and broader strength across the business, and that actions around value, pet, digital and convenience gained traction. He said the company is moving with urgency to sharpen strategic priorities, drive productivity and make deliberate choices about where it invests capital, efforts designed to accelerate comparable store sales growth, restore operating margins and deliver long-term shareholder returns.

Results benefited from solid performance in seasonal categories including wildlife supplies, equine & livestock and truck, tool & hardware. Consumable, usable and edible categories performed above the company average. Double-digit growth in digital sales also contributed. Those gains were partially offset by continued softness in big-ticket and companion animal categories. Companion animal continued to perform below the company average, the company said, though trends have improved steadily since the first quarter.

Gross profit increased 2.6% to $1.42 billion from $1.39 billion a year earlier. Gross margin rate was 36.4%, compared with 37.4% in the prior year’s third quarter. The company said the decline was primarily attributable to higher transportation and fuel costs and incremental investments to strengthen its price-value position.

Selling, general and administrative expenses, including depreciation and amortization, increased 6.8% to $1.12 billion from $1.05 billion a year earlier. As a percent of net sales, SG&A increased to 28.6% from 28.1%. The company said the increase was primarily driven by deleverage from lower comparable store sales and startup costs associated with opening a new distribution center, partially offset by disciplined expense control.

Operating income decreased 10.2% to $307.7 million from $342.7 million a year earlier. Operating margin was 7.87%, versus 9.21% a year earlier. The effective income tax rate was 22.1%, compared with 21.0%, primarily reflecting the lapping of certain tax planning initiatives in the prior year.

Net income decreased 13.3% to $224.7 million from $259.3 million a year earlier. Diluted EPS decreased 11.6% to $0.43 compared with $0.49.

The company opened 23 new Tractor Supply stores and closed 74 Petsense by Tractor Supply stores, as previously announced. As of September 26, it operated 2,486 Tractor Supply stores in 49 states and 135 Petsense locations in 21 states.

It repurchased approximately 2.7 million shares for $88.5 million and paid quarterly cash dividends totaling $124.9 million, returning $213.4 million of capital to shareholders in the third quarter.

Tractor Supply is reaffirming its financial outlook for fiscal year 2026 after updating it in the second quarter. The company now expects net sales of +2.5% to +3.5%, comparable store sales of (1%) to flat, and an operating margin rate of 8.0% to 8.3%. Adjusted operating margin rate is 8.5% to 8.8%. Net income is expected at $930 million to $990 million, with adjusted net income of $990 million to $1.05 billion. Diluted EPS is expected at $1.78 to $1.88, and adjusted diluted EPS at $1.90 to $2.00. Adjusted measures exclude Petsense impairment and VIP Petcare acquisition costs recorded in the second quarter.

Lawton said progress in the quarter and actions underway give the company confidence in its ability to deliver within full-year guidance. As it heads into the fourth quarter, he said the focus remains on being the dependable supplier customers count on throughout the winter season.