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 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.

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 27, 2025 (the “2025 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 such things as sales and earnings growth, new store growth, estimated results of operations in future periods (including, but not limited to, net sales, comparable store sales, operating margins or operating margin rates, 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) and 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,” “plan,” “intend,” “would,” “expect,” “continue,” “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 2025 Form 10-K, 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

Forward-looking statements made by or on behalf of the Company are based on our knowledge of our business and the environment in which we operate, but because of the factors listed above or other factors, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’s 2024 Form 10-K and other filings with the Securities and Exchange Commission (the “SEC”). There can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or our business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Current wording

Forward-looking statements made by or on behalf of the Company are based on our knowledge of our business and the environments in which we operate, but because of the factors listed above or other factors, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’s 2025 Form 10-K and other filings with the Securities and Exchange Commission (the “SEC”). There can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or our business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Previous wording

Historically, weather conditions, including unseasonably warm weather in the fall and winter months and unseasonably cool weather in the spring and summer months, have unfavorably affected the timing and volume of our sales and results of operations. In addition, extreme weather conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes, extreme rain, and droughts have impacted operating results both negatively and positively, depending on the severity and length of these conditions. Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends, but there is no guarantee that we will be able to successfully execute this strategy. For more information regarding the risks we face in this regard, see Item 1A. “Risk Factors—Weather and Climate Risks” in our 2024 Form 10-K.

Current wording

Historically, weather conditions, including unseasonably warm weather in the fall and winter months and unseasonably cool weather in the spring and summer months, have unfavorably affected the timing and volume of our sales and results of operations. In addition, extreme weather conditions, including snow and ice storms, flood and wind damage, hurricanes, tornadoes, extreme rain, and droughts have impacted operating results both negatively and positively, depending on the severity and duration of these conditions. Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends, but there is no guarantee that we will be able to successfully execute this strategy. For more information regarding the risks we face in this regard, see Item 1A. “Risk Factors—Weather and Climate Risks” in our 2025 Form 10-K.

Previous wording

Comparable store metrics are a key performance indicator used in the retail industry and by the Company to measure the performance of the underlying business. Our comparable store metrics are calculated on an annual basis using sales generated from all stores open at least one year and all online sales and exclude certain adjustments to net sales. Stores closed during either of the years being compared are removed from our comparable store metrics calculations. Stores relocated during either of the years being compared are not removed from our comparable store metrics calculations. If the effect of relocated stores on our comparable store metrics calculations became material, we would remove relocated stores from the calculations. Allivet sales will be considered comparable store sales one year after the transaction close date of December 30, 2024. Comparable store sales are intended only as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP.

Current wording

Comparable store metrics are a key performance indicator used in the retail industry and by the Company to measure the performance of the underlying business. Our comparable store metrics are calculated on an annual basis using sales generated from all stores open at least one year and all online sales and exclude certain adjustments to net sales. Stores closed during either of the years being compared are removed from our comparable store metrics calculations. Stores relocated during either of the years being compared are not removed from our comparable store metrics calculations. If the effect of relocated stores on our comparable store metrics calculations became material, we would remove relocated stores from the calculations. Allivet sales are considered comparable store sales one year after the transaction close date of December 30, 2024. Comparable store sales are intended only as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP.

Previous 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.

Current wording

Net sales for the first three months of fiscal 2026 increased 3.6% to $3.59 billion from $3.47 billion in the first three months of fiscal 2025. The increase in net sales was driven by new store openings and, to a lesser extent, the 0.5% increase in comparable store sales. In the first three months of fiscal 2025, net sales increased 2.1% and comparable store sales decreased 0.9%.

Previous 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.

Current wording

Sales from new stores were $109.7 million for the first three months of fiscal 2026, which represented 3.1 percentage points of the 3.6% net sales increase over the first three months of fiscal 2025 net sales. For the first three months of fiscal 2025, sales from stores open less than one year were $97.9 million, which represented 2.9 percentage points of the 2.1% increase over the first three months of fiscal 2024 net sales.

Previous 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.

Current wording

Gross profit increased 3.6% to $1.30 billion for the first three months of fiscal 2026 from $1.26 billion for the first three months of fiscal 2025. As a percent of net sales, gross margin in the first three months of fiscal 2026 was flat with the first three months of fiscal 2025 at 36.2%. The gross margin rate benefited from disciplined product cost management and the continued execution of an everyday low price strategy, offset by higher tariffs and delivery-related transportation costs.

Previous 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.

Current wording

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 6.1% to $1.07 billion for the first three months of fiscal 2026 from $1.01 billion for the first three months of fiscal 2025. As a percent of net sales, SG&A expenses increased 70 basis points to 29.7% in the first three months of fiscal 2026 from 29.0% for the first three months of fiscal 2025. The increase in SG&A as a percent of net sales was primarily attributable to deleverage of fixed costs given the comparable store sales performance and an accelerated new store opening cadence, partially offset by an ongoing focus on productivity and cost discipline.

Previous 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.

Current wording

The effective income tax rate was 23.2% in the first three months of fiscal 2026 compared to 21.8% in the first three months of fiscal 2025. The increase in the effective income tax rate in the first three months of fiscal 2026 compared to the first three months of fiscal 2025 was driven primarily by the timing of discrete items in the prior year fiscal quarter.

Previous 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.

Current wording

Netincome for the first three months of fiscal 2026 decreased 8.3% to$164.5 million, or $0.31 per diluted share, as compared to netincome of$179.4 million, or$0.34 per diluted share, for the first three months of fiscal 2025.

Previous 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.

Current wording

During the first three months of fiscal 2026, we repurchased approximately 2.3 million sharesof the Company’s common stock at a total cost of $118.0 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $126.4 million, returning $244.4 million to our stockholders.

Previous 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):

Current wording

Operating activities provided net cash of $91.1 million and $216.8 million in the first three months of fiscal 2026 and fiscal 2025, respectively. The $125.7 million decrease in net cash provided by operating activities in the first three months of fiscal 2026 compared to the first three months of fiscal 2025 is due to changes in the following operating activities (in millions):

Previous 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):

Current wording

Investing activities used net cash of $171.3 million and $261.0 million in the first three months of fiscal 2026 and fiscal 2025, respectively. The $89.7 million decrease in net cash used in investing activities in the first three months of fiscal 2026 compared to the first three months of fiscal 2025 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 nine months of fiscal 2025 is primarily driven by the increase in new store openings and the construction of owned, fixed-fee development stores.

Current wording

The increase in capital expenditures for new stores, relocated stores and stores not yet opened in the first three months of fiscal 2026 is primarily driven by the increase in new store openings and the construction of owned, fixed-fee development stores. Capital expenditures for the first three months of fiscal 2026 included the opening of 40 new Tractor Supply stores compared to 15 new Tractor Supply stores during the first three months of fiscal 2025. Partially offsetting the increase in total capital expenditures, proceeds from the sale of property and equipment increased in the first three months of fiscal 2026 primarily driven by the sale of both new, fixed-fee development stores, and existing stores as part of our sale-leaseback program.

Previous wording

The increase in capital expenditures for distribution center capacity and improvements in the first nine months of fiscal 2025 is primarily driven by the construction of our newest distribution center in Nampa, Idaho. The first nine months of fiscal 2024 reflect spend associated with construction of the Maumelle, Arkansas distribution center which opened during the second quarter of fiscal 2024. The first nine months of fiscal 2025 reflect spend associated with land development and ongoing construction of the Nampa, Idaho distribution center.

Current wording

The increase in capital expenditures for distribution center capacity and improvements in the first three months of fiscal 2026 is primarily driven by the construction of our newest distribution center in Nampa, Idaho which is anticipated to begin operations in the fourth quarter of fiscal 2026.

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, continue 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 2026 are currently estimated to be in the range of approximately $675 million to $725 million. The capital expenditures include a plan to open approximately 100 Tractor Supply stores, continue Project Fusion remodels and side lot garden center transformations, complete construction of our Nampa, Idaho distribution center, and continue investing in store and digital technology.

Previous 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):

Current wording

Financing activities provided net cash of $110.4 million and $24.5 million in the first three months of fiscal 2026 and fiscal 2025, respectively. The $85.9 million increase in net cash provided by financing activities in the first three months of fiscal 2026 compared to the first three months of fiscal 2025 is due to changes in the following (in millions):

Previous 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.

Current wording

The $85.9 million increase in net cash provided by financing activities is primarily due to incremental borrowings under the Company’s Revolving Credit Facility in the first three months of fiscal 2026, partially offset by a modest increase in the repurchase of common stock.

Previous wording

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

Current wording

During the first three months of fiscal 2026 and fiscal 2025, 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 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.

Current wording

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program, which was most recently increased by $1.00 billion on February 12, 2025. The total amount authorized under the program, which has been increased from time to time, 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 March 28, 2026, the Company had remaining authorization under the share repurchase program of $1.01 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 nine months ended September 27, 2025 and September 28, 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 months ended March 28, 2026 and March 29, 2025, 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 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.

Current wording

For a description of the Company’s significant contractual obligations and commercial commitments, refer to Note 12 to the Consolidated Financial Statements included under Part II, Item 8 in our 2025 Form 10-K for the fiscal year ended December 27, 2025. As of March 28, 2026, the Company had contractual commitments of approximately $55.3 million related to the construction of our newest distribution center in Nampa, Idaho. As of March 28, 2026, there has been no other material change in the information disclosed in the 2025 Form 10-K for the fiscal year ended December 27, 2025.