The second quarter fell short of expectations for Tractor Supply Co. as comparable sales declined due to fewer transactions.
Net income was $360.7 million, or 69 cents per diluted share, versus $430 million, or 81 cents per diluted share, in the year-previous quarter. Adjusted for one-time events, net income was $423.5 million, or 81 cents per diluted share. The company didn’t post an adjusted net income in the year-before quarter.
A Zacks Investment Research analyst consensus estimate called for adjusted diluted earnings per share of 83 cents on revenues of $4.62 billion.
Comparable sales decreased 1.5% year over year in the quarter as transaction count slipped 1.7% and average ticket gained 0.2%. Net sales increased to $4.54 billion from $4.44 billion in the year-before period, Tractor Supply reported, with the advance driven by new store openings partially offset by the comps decline.
Operating income declined 19.2% to $467.1 million in the quarter year over year, while adjusted operating income slid 5.1% to $548.3 million.
Tractor Supply updated its financial outlook for the fiscal year, which now has net sales up 2.5% to 3.5%, comparable sales down 1% to flat, net income of $930 million to $990 million or $1.78 to $1.88 per diluted share, and adjusted net income of $990 million to $1.05 billion or $1.90 to $2 per diluted share. It previously issued guidance including a net sales increase of 4% to 6%, a comp increase of 1% to 3% and net income of $1.11 billion to $1.17 billion or $2.13 to $2.23 per diluted share.
Tractor Supply opened 28 namesake and three Petsense stores in the quarter.
“The Tractor Supply business model demonstrated its strength and durability during the second quarter,” said Hal Lawton, Tractor Supply president and CEO. “Positive comparable store sales in April and June were more than offset by unusually adverse conditions in May, which drove second-quarter results below our expectations. While we are not satisfied with our performance, we believe there are discrete headwinds impacting the majority of our end markets. Our core customer remains highly engaged, our needs-based businesses continue to perform well and our competitive position remains strong. Tractor Supply has successfully navigated many economic cycles throughout our 88-year history, and we remain confident that the long-term demand drivers supporting our business remain intact.”
As for the company’s outlook, Lawton said: “We are updating our fiscal 2026 outlook to reflect our year-to-date performance and expectations for the balance of the year. We are responding with urgency by strengthening our companion animal business, reinforcing our value position and improving productivity across the business. At the same time, we are sharpening our strategic focus, evaluating where we allocate capital and resources and making disciplined choices that we believe will strengthen Tractor Supply and create long-term shareholder value. The actions we are taking are designed to improve performance over the balance of the year and further position the company for long-term success.”
