Tractor Supply's Q4 Earnings Miss, Comparable Store Sales Rise 0.3%

Core Insights - Tractor Supply Company (TSCO) reported fourth-quarter 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, indicating a challenging quarter for the company [1][10] Financial Performance - Net sales increased by 3.3% year over year to $3.90 billion, but fell short of the Zacks Consensus Estimate of $4.01 billion [2] - Earnings per share (EPS) were reported at 43 cents, below the expected 46 cents, and represented a 2.3% decline from the prior year's quarter [1][10] - Comparable store sales (comps) rose by 0.3% year over year, a decrease from the 0.6% increase in the same quarter last year [2] Cost and Margin Analysis - Gross profit increased by 3% year over year to $1.37 billion, while gross margin decreased by 10 basis points to 35.1% due to elevated tariffs and higher transportation costs [5] - Selling, general and administrative (SG&A) expenses rose by 6% to $1.07 billion, with SG&A as a percentage of net sales increasing to 27.5% from 26.8% [6] - Operating income fell by 6.5% year over year to $297.7 million, with the operating margin decreasing by 80 basis points to 7.6% [7] Financial Position - At the end of the quarter, the company had cash and cash equivalents of $194.1 million and long-term debt of $1.76 billion [8] - In 2025, net cash provided by operating activities was $1.64 billion, with capital expenditures amounting to $894.8 million [8] Shareholder Returns - In 2025, Tractor Supply returned $848.5 million to shareholders, which included share repurchases of 6.6 million shares for $360.8 million and cash dividends of $487.7 million [9] Future Outlook - For 2026, the company expects net sales growth of 4-6% and comps growth of 1-3%, with an operating margin projected between 9.3% and 9.6% [10][12] - Net income is anticipated to be between $1.11 billion and $1.17 billion, with EPS expected to range from $2.13 to $2.23 [12]