TRACTOR SUPPLY CO /DE/

Previous wording

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Form 10-K”) and subsequent Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements and information. The forward-looking statements included herein are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including sales and earnings growth, new store growth, estimated results of operations in future periods (including, but not limited to, sales, comparable store sales, operating margins, net income, and earnings per diluted share), the declaration and payment of dividends, the timing and amount of share repurchases, future capital expenditures (including their timing, amount and nature), sale-leasebacks, acquisitions, business strategy, strategic initiatives, expansion and growth of our business operations, and other such matters are forward-looking statements. Forward-looking statements are usually identified by or are associated with such words as “will,” “plans,” “intend,” “expect,” “believe,” “anticipate,” “optimistic,” “forecasted” and similar terminology. These forward-looking statements may be affected by certain risks and uncertainties, any one, or a combination of which, could materially affect the results of our operations. To take advantage of the safe harbor provided by the PSLRA, we have identified certain factors in Part I, Item 1A. “Risk Factors” in our 2024 Form 10-K and herein, including the impact of the recent tariff announcements and the corresponding macroeconomic pressures, which may cause actual results to differ materially from those expressed in any forward-looking statements. These “Risk Factors” may be updated from time to time in our quarterly reports on Form 10-Q or other subsequent filings with the SEC.

Current wording

The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Form 10-K”) and subsequent Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements and information. The forward-looking statements included herein are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including sales and earnings growth, new store growth, estimated results of operations in future periods (including, but not limited to, sales, comparable store sales, operating margins, net income, and earnings per diluted share), the declaration and payment of dividends, the timing and amount of share repurchases, future capital expenditures (including their timing, amount and nature), sale-leasebacks, acquisitions, business strategy, strategic initiatives, expansion and growth of our business operations, and other such matters are forward-looking statements. Forward-looking statements are usually identified by or are associated with such words as “will,” “plans,” “intend,” “expect,” “believe,” “anticipate,” “optimistic,” “forecasted” and similar terminology. These forward-looking statements may be affected by certain risks and uncertainties, any one, or a combination of which, could materially affect the results of our operations. To take advantage of the safe harbor provided by the PSLRA, we have identified certain factors in Part I, Item 1A. “Risk Factors” in our 2024 Form 10-K and herein, including the impact of changes in tariffs and the corresponding macroeconomic pressures, which may cause actual results to differ materially from those expressed in any forward-looking statements. These “Risk Factors” may be updated from time to time in our quarterly reports on Form 10-Q or other subsequent filings with the SEC.

Previous wording

Net sales for the second quarter of fiscal 2025 increased 4.5% to $4.44 billion from $4.25 billion in the second quarter of fiscal 2024. The increase in net sales was driven primarily by new store openings and the 1.5% increase in comparable store sales. In the second quarter of fiscal 2024, net sales increased 1.5% and comparable store sales decreased 0.5%.

Current wording

Net sales for the third quarter of fiscal 2025 increased 7.2% to $3.72 billion from $3.47 billion in the third quarter of fiscal 2024. The increase in net sales was driven primarily by the 3.9% increase in comparable store sales, as well as new store openings and the contribution from Allivet. In the third quarter of fiscal 2024, net sales increased 1.6% and comparable store sales decreased 0.2%.

Previous wording

The comparable store sales results for the second quarter of fiscal 2025 included a comparable average transaction count increase of 1.0% and a comparable average ticket increase of 0.5%. Comparable store sales growth was driven by continued momentum in year-round categories, especially consumable, usable and edible (C.U.E.) products, along with solid demand for spring seasonal items. Performance was also positive in apparel, gift and décor, as well as big ticket items. These gains were partially offset by softness in select discretionary categories.

Current wording

The comparable store sales results for the third quarter of fiscal 2025 included a comparable average transaction count increase of 2.7% and a comparable average ticket increase of 1.2%. Comparable store sales growth was driven by strength in spring and summer seasonal products and continued momentum in core categories, especially consumable, usable and edible (C.U.E.) products.

Previous wording

Sales from new stores, including Allivet sales, were $126.7 million for the second quarter of fiscal 2025, which represented 3.0 percentage points of the 4.5% net sales increase over second quarter fiscal 2024 net sales. For the second quarter of fiscal 2024, sales from stores open less than one year were $83.7 million, which represented 2.0 percentage points of the 1.5% increase over second quarter fiscal 2023 net sales.

Current wording

Sales from new stores, including Allivet sales, were $113.8 million for the third quarter of fiscal 2025, which represented 3.3 percentage points of the 7.2% net sales increase over third quarter fiscal 2024 net sales. For the third quarter of fiscal 2024, sales from stores open less than one year were $70.1 million, which represented 2.0 percentage points of the 1.6% increase over third quarter fiscal 2023 net sales.

Previous wording

Gross profit increased 5.4% to $1.64 billion for the second quarter of fiscal 2025 from $1.56 billion for the second quarter of fiscal 2024. As a percent of net sales, gross margin in the second quarter of fiscal 2025 increased 31 basis points to 36.9% from 36.6% in the second quarter of fiscal 2024. The gross margin rate increase was primarily attributable to disciplined product cost management and the continued execution of an everyday low price strategy.

Current wording

Gross profit increased 7.7% to $1.39 billion for the third quarter of fiscal 2025 from $1.29 billion for the third quarter of fiscal 2024. As a percent of net sales, gross margin in the third quarter of fiscal 2025 increased 15 basis points to 37.4% from 37.2% in the third quarter of fiscal 2024. Gross margin improvement from the Company’s ongoing focus on product cost management and the continued execution of an everyday low price strategy was primarily offset by tariff costs and higher transportation costs.

Previous wording

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.8% to $1.06 billion for the second quarter of fiscal 2025 from $994.2 million for the second quarter of fiscal 2024. As a percent of net sales, SG&A expenses increased 51 basis points to 23.9% from 23.4% in the second quarter of fiscal 2024. The increase in SG&A as a percent of net sales was primarily attributable to planned growth investments and modest deleverage of fixed costs given the level of comparable store sales. These factors were partially offset by an ongoing focus on productivity and cost control, and to a lesser extent, a modest benefit from the Company’s ongoing sale-leaseback strategy.

Current wording

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 8.4% to $1.05 billion for the third quarter of fiscal 2025 from $965.8 million for the third quarter of fiscal 2024. As a percent of net sales, SG&A expenses increased 29 basis points to 28.1% in the third quarter of fiscal 2025 from 27.8% in the third quarter of fiscal 2024. The increase in SG&A as a percent of net sales was primarily attributable to planned investments, as well as the timing of higher incentive compensation as the Company lapped lower accruals in the prior year and a lower sale-leaseback benefit. These factors were partially offset by an ongoing focus on productivity and fixed cost leverage.

Previous wording

The effective income tax rate was 23.2% in the second quarter of fiscal 2025 compared to 22.7% in the second quarter of fiscal 2024. The increase in the effective income tax rate in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 was driven primarily by a decrease in stock compensation activity.

Current wording

The effective income tax rate was 21.0% in the third quarter of fiscal 2025 compared to 22.3% in the third quarter of fiscal 2024. The decrease in the effective income tax rate in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 was driven primarily by the benefit associated with the purchase of a transferable federal tax credit.

Previous wording

Net income for the second quarter of fiscal 2025 increased 1.1% to $430.0 million, or $0.81 per diluted share, as compared to net income of $425.2 million, or $0.79 per diluted share, for the second quarter of fiscal 2024.

Current wording

Net income for the third quarter of fiscal 2025 increased 7.4% to $259.3 million, or $0.49 per diluted share, as compared to net income of $241.5 million, or $0.45 per diluted share, for the third quarter of fiscal 2024.

Previous wording

During the second quarter of fiscal 2025, we repurchased approximately 1.4 million shares of the Company’s common stock at a total cost of $73.9 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $122.0 million, returning $195.9 million of capital to our stockholders.

Current wording

During the third quarter of fiscal 2025, we repurchased approximately 1.3 million shares of the Company’s common stock at a total cost of $75.4 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $121.9 million, returning $197.3 million of capital to our stockholders.

Previous wording

Net sales for the first six months of fiscal 2025 increased 3.5% to $7.91 billion from $7.64 billion in the first six months of fiscal 2024. The increase in net sales was driven primarily by new store openings and the 0.5% increase in comparable store sales. In the first six months of fiscal 2024, net sales increased 2.1% and comparable store sales increased 0.2%.

Current wording

Net sales for the first nine months of fiscal 2025 increased 4.6% to $11.63 billion from $11.11 billion in the first nine months of fiscal 2024. The increase in net sales was driven partially by the 1.5% increase in comparable store sales, as well as new store openings and the contribution from Allivet. In the first nine months of fiscal 2024, net sales increased 2.0% and comparable store sales were flat.

Previous wording

The comparable store sales results for the first six months of fiscal 2025 included an increase in comparable average transaction count of 1.5%, partially offset by a decrease in comparable average transaction value of 1.0%. Comparable store sales growth was driven primarily by performance in year-round categories including consumable, usable and edible (C.U.E.) products along with a strong demand in the first quarter for winter seasonal products. These gains were partially offset by softness in big ticket and select discretionary categories.

Current wording

The comparable store sales results for the first nine months of fiscal 2025 included a comparable average transaction count increase of 1.9%, partially offset by a decrease in comparable average transaction value of 0.3%. Comparable store sales growth was driven primarily by performance in year-round categories, including C.U.E. products, along with strong demand in the first quarter for winter seasonal products and strength in spring and summer seasonal products across the second and third quarters. This growth was partially offset by softness in big ticket and select discretionary categories.

Previous wording

Sales from new stores, including Allivet sales, were $224.6 million for the first six months of fiscal 2025, which represented 2.9 percentage points of the 3.5% net sales increase over the first six months of fiscal 2024 net sales. For the first six months of fiscal 2024, sales from stores open less than one year were $149.0 million, which represented 2.0 percentage points of the 2.1% increase over the first six months of fiscal 2023 net sales.

Current wording

Sales from new stores, including Allivet sales, were $338.3 million for the first nine months of fiscal 2025, which represented 3.0 percentage points of the 4.6% net sales increase over the first nine months of fiscal 2024 net sales. For the first nine months of fiscal 2024, sales from stores open less than one year were $219.1 million, which represented 2.0 percentage points of the 2.0% increase over the first nine months of fiscal 2023 net sales.

Previous wording

The following table summarizes store growth for the fiscal six months ended June 28, 2025 and June 29, 2024:

Current wording

The following table summarizes store growth for the fiscal nine months ended September 27, 2025 and September 28, 2024:

Previous wording

The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal six months ended June 28, 2025 and June 29, 2024 :

Current wording

The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal nine months ended September 27, 2025 and September 28, 2024 :

Previous wording

Gross profit increased 4.3% to $2.90 billion for the first six months of fiscal 2025 from $2.78 billion for the first six months of fiscal 2024. As a percent of net sales, gross margin in the first six months of fiscal 2025 increased 29 basis points to 36.6% from 36.3% in the first six months of fiscal 2024. The gross margin rate increase was primarily attributable to disciplined product cost management and the continued execution of an everyday low price strategy.

Current wording

Gross profit increased 5.4% to $4.28 billion for the first nine months of fiscal 2025 from $4.07 billion for the first nine months of fiscal 2024. As a percent of net sales, gross margin in the first nine months of fiscal 2025 increased 25 basis points to 36.9% from 36.6% in the first nine months of fiscal 2024. Gross margin improvement from the Company’s ongoing focus on product cost management and the continued execution of an everyday low price strategy was partially offset by tariff costs and higher transportation costs.

Previous wording

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.0% to $2.07 billion for the first six months of fiscal 2025 from $1.95 billion for the first six months of fiscal 2024. As a percent of net sales, SG&A expenses increased 62 basis points to 26.2% for the first six months of fiscal 2025 from 25.5% for the first six months of fiscal 2024. The increase in SG&A as a percent of net sales was primarily attributable to the Company’s planned growth investments and modest deleverage of fixed costs given the level of comparable store sales. These factors were partially offset by an ongoing focus on productivity and cost control, and to a lesser extent, a modest benefit from the Company’s ongoing sale-leaseback strategy.

Current wording

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.8% to $3.11 billion for the first nine months of fiscal 2025 from $2.92 billion for the first nine months of fiscal 2024. As a percent of net sales, SG&A expenses increased 53 basis points to 26.8% in the first nine months of fiscal 2025 from 26.3% in the first nine months of fiscal 2024. The increase in SG&A as a percent of net sales was primarily attributable to the Company’s planned investments and modest deleverage of fixed costs given the level of comparable store sales. These factors were partially offset by an ongoing focus on productivity and cost control.

Previous wording

The effective income tax rate was 22.8% in the first six months of fiscal 2025 compared to 22.2% in the first six months of fiscal 2024. The increase in the effective income tax rate in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 was driven primarily by a decrease in stock compensation activity.

Current wording

The effective income tax rate was 22.3% in the first nine months of fiscal 2025 compared to 22.2% in the first nine months of fiscal 2024. The increase in the effective income tax rate in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 was driven primarily by a reduction in the benefit from annual stock compensation activity, partially offset by the benefit associated with the purchase of a transferable federal tax credit.

Previous wording

Net income for the first six months of fiscal 2025 decreased 2.2% to $609.4 million, or $1.14 per diluted share, as compared to net income of $623.4 million, or $1.15 per diluted share, for the first six months of fiscal 2024.

Current wording

Net income for the first nine months of fiscal 2025 increased 0.4% to $868.7 million, or $1.63 per diluted share, as compared to net income of $864.8 million, or $1.60 per diluted share, for the first nine months of fiscal 2024.

Previous wording

During the first six months of fiscal 2025, we repurchased approximately 3.2 million shares of the Company’s common stock at a total cost of $167.9 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $244.4 million, returning $412.3 million to our stockholders.

Current wording

During the first nine months of fiscal 2025, we repurchased approximately 4.4 million shares of the Company’s common stock at a total cost of $243.2 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $366.2 million, returning $609.4 million to our stockholders.

Previous wording

Operating activities provided net cash of $1.00 billion and $817.3 million in the first six months of fiscal 2025 and fiscal 2024, respectively. The $185.2 million increase in net cash provided by operating activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 is due to changes in the following operating activities (in millions):

Current wording

Operating activities provided net cash of $1.31 billion and $903.6 million in the first nine months of fiscal 2025 and fiscal 2024, respectively. The $406.8 million increase in net cash provided by operating activities in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 is due to changes in the following operating activities (in millions):

Previous wording

The $185.2 million increase in net cash provided by operating activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 was primarily driven by our management of inventory and accounts payable.

Current wording

The $406.8 million increase in net cash provided by operating activities in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 was primarily driven by our management of inventory and accounts payable and changes in accrued expenses from the purchase of a transferable federal tax credit, which was executed during the third quarter of fiscal 2025 and will be paid in the fourth quarter of fiscal 2025. In addition, net cash provided by operating activities benefitted from an increase in accrued income taxes driven by timing of payments.

Previous wording

Investing activities used net cash of $448.7 million and $331.3 million in the first six months of fiscal 2025 and fiscal 2024, respectively. The $117.4 million increase in net cash used in investing activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 is due to changes in the following investing activities (in millions):

Current wording

Investing activities used net cash of $676.9 million and $460.1 million in the first nine months of fiscal 2025 and fiscal 2024, respectively. The $216.8 million increase in net cash used in investing activities in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 is due to changes in the following investing activities (in millions):

Previous wording

The increase in capital expenditures for new stores, relocated stores and stores not yet opened in the first six months of fiscal 2025 is primarily driven by the increase in the construction of owned, fixed-fee development stores. Capital expenditures for the first six months of fiscal 2025 included the opening of 39 new Tractor Supply stores compared to 38 new Tractor Supply stores during the first six months of fiscal 2024. The Company also opened four new Petsense by Tractor Supply stores during the first six months of fiscal 2025 compared to seven new stores during the first six months of fiscal 2024.

Current wording

The increase in capital expenditures for new stores, relocated stores and stores not yet opened in the first nine months of fiscal 2025 is primarily driven by the increase in new store openings and the construction of owned, fixed-fee development stores.

Previous wording

The decrease in capital expenditures for existing stores in the first six months of fiscal 2025 as compared to the first six months of fiscal 2024 primarily reflects the timing of spend related to internal space productivity and side lot garden center transformations.

Current wording

The decrease in capital expenditures for existing stores in the first nine months of fiscal 2025 primarily reflects both efficiencies and lower average costs related to internal space productivity and side lot garden center transformations and a reallocation of funds to construction of the new distribution center in Nampa, Idaho.

Previous wording

Capital expenditures for information technology represent continued support of our store growth and our Digital initiatives, as well as improvements in security and compliance and other strategic initiatives including our Final Mile initiative.

Current wording

Capital expenditures for information technology represent continued support of our store growth, digital initiatives, and Company-wide strategic initiatives.

Previous wording

Our projected capital expenditures, net of sale-leaseback proceeds, for fiscal 2025 are currently estimated to be in the range of approximately $650.0 million to $725.0 million. The capital expenditures include a plan to open approximately 90 Tractor Supply stores, continue Project Fusion remodels and side lot garden center transformations, begin construction on our Nampa, Idaho distribution center, and open approximately 10 new Petsense by Tractor Supply stores.

Current wording

Our projected capital expenditures, net of sale-leaseback proceeds, for fiscal 2025 are currently estimated to be in the range of approximately $650.0 million to $725.0 million. The capital expenditures include a plan to open approximately 90 Tractor Supply stores, continue Project Fusion remodels and side lot garden center transformations, continue construction on our Nampa, Idaho distribution center, and open approximately 10 new Petsense by Tractor Supply stores.

Previous wording

Financing activities used net cash of $579.6 million in the first six months of fiscal 2025 compared to using net cash of $488.3 million in the first six months of fiscal 2024. The $91.3 million change in net cash used in financing activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 is due to changes in the following (in millions):

Current wording

Financing activities used net cash of $700.4 million and $654.3 million in the first nine months of fiscal 2025 and fiscal 2024, respectively. The $46.1 million change in net cash used in financing activities in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 is due to changes in the following (in millions):

Previous wording

The $91.3 million change in net cash used in financing activities in the first six months of fiscal 2025 compared to the first six months of fiscal 2024 is primarily due to incremental borrowing under the Company’s Revolving Credit Facility in the current period, partially offset by a decrease in the repurchase of common stock.

Current wording

The $46.1 million increase in net cash used in financing activities is primarily due to repayments under the Company’s Revolving Credit Facility compared to incremental borrowings under the Company’s Revolving Credit Facility in the prior year period, partially offset by a decrease in the repurchase of common stock.

Previous wording

During the first six months of fiscal 2025 and fiscal 2024, the Company's Board of Directors declared the following cash dividends:

Current wording

During the first nine months of fiscal 2025 and fiscal 2024, the Company's Board of Directors declared the following cash dividends:

Previous wording

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program which was announced in February 2007. The aggregate total authorized amount of the program, which was increased by $1.00 billion on February 12, 2025, is currently $7.50 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The share repurchase program does not have an expiration date. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares are accounted for at cost and will be held in treasury for future issuance. The program may be limited, temporarily paused, or terminated at any time without prior notice. As of June 28, 2025, the Company had remaining authorization under the share repurchase program of $1.32 billion, exclusive of any fees, commissions, or other expenses.

Current wording

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program which was announced in February 2007. The aggregate total authorized amount of the program, which was increased by $1.00 billion on February 12, 2025, is currently $7.50 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The share repurchase program does not have an expiration date. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares are accounted for at cost and will be held in treasury for future issuance. The program may be limited, temporarily paused, or terminated at any time without prior notice. As of September 27, 2025, the Company had remaining authorization under the share repurchase program of $1.24 billion, exclusive of any fees, commissions, or other expenses.

Previous wording

The following table provides the number of shares repurchased, average price paid per share, and total cost of share repurchases pursuant to our publicly announced repurchase plan during the fiscal three and six months ended June 28, 2025 and June 29, 2024, respectively (in thousands, except per share amounts):

Current wording

The following table provides the number of shares repurchased, average price paid per share, and total cost of share repurchases pursuant to our publicly announced repurchase plan during the fiscal three and nine months ended September 27, 2025 and September 28, 2024, respectively (in thousands, except per share amounts):

Previous wording

For a description of the Company’s significant contractual obligations and commercial commitments, refer to Note 11 to the Consolidated Financial Statements included under Part II, Item 8 in our 2024 Form 10-K for the fiscal year ended December 28, 2024. As of June 28, 2025, there has been no other material change in the information disclosed in the 2024 Form 10-K for the fiscal year ended December 28, 2024.

Current wording

For a description of the Company’s significant contractual obligations and commercial commitments, refer to Note 11 to the Consolidated Financial Statements included under Part II, Item 8 in our 2024 Form 10-K for the fiscal year ended December 28, 2024. As of September 27, 2025, the Company had contractual commitments of approximately $118.6 million related to the construction of our newest distribution center in Nampa, Idaho. As of September 27, 2025, there has been no other material change in the information disclosed in the 2024 Form 10-K for the fiscal year ended December 28, 2024.