Tractor Supply Q2 2025 slides: Sales rebound with 1.5% comp growth, shares jump

Tractor Supply Company (NASDAQ:TSCO) presented its second-quarter 2025 earnings results on July 24, showing a significant improvement from its challenging first quarter. The retailer’s shares jumped 7.35% in pre-market trading and continued rising 3.04% during regular trading hours, reflecting investor confidence in the company’s recovery.

Quarterly Performance Highlights

Tractor Supply reported net sales of $4.44 billion for Q2 2025, representing a 4.5% increase from $4.25 billion in the same period last year. Comparable store sales grew 1.5%, a marked improvement from the 0.5% decline in Q2 2024 and the 0.9% decline reported in Q1 2025.

The company’s comparable transactions increased by 1.0% while comparable ticket size grew by 0.5%, indicating both higher customer traffic and spending. Management highlighted strong performance in core categories including year-round products, spring seasonal items, and apparel, gifts, and décor, though this was partially offset by softness in select discretionary categories.

As shown in the following chart of quarterly sales performance:

Gross margin expanded to 36.9% in Q2 2025, a 31 basis point improvement from 36.6% in Q2 2024. The company attributed this growth to disciplined product cost management and ongoing execution of its everyday low price strategy.

However, selling, general and administrative (SG&A) expenses increased to 23.9% of sales, up 51 basis points from 23.4% in the prior year. This increase was primarily attributed to planned growth initiatives and modest fixed cost deleverage, though the company emphasized its focus on cost control and productivity initiatives.

The following chart illustrates these margin trends:

Operating margin decreased slightly to 13.0% from 13.2% in Q2 2024, reflecting the SG&A deleverage that outpaced gross margin improvement. Despite this, net income increased 1.1% to $430.0 million, while diluted earnings per share rose 2.8% to $0.81 (adjusted for the 5:1 stock split effective December 20, 2024).

The following chart details these profitability metrics:

Operational Achievements

Tractor Supply highlighted several operational achievements during the quarter. Customer retention reached "all-time highs," according to management, while the company’s seasonal "Chick Days" promotion delivered record performance. The company also noted that its distribution center network achieved its most efficient second quarter in history.

The expansion of garden centers continued, with over 650 now operational across the store network. These operational improvements are visualized in the following slide:

The company also emphasized its community engagement initiatives, including a $1 million donation to celebrate its Hometown Heroes anniversary and raising $1 million for 4-H through its Paper Clover campaign. Additionally, Tractor Supply packed 500 backpacks for Operation Homefront’s back-to-school brigade and rolled out Lincoln Electric products nationwide.

Strategic Initiatives

A key focus of the presentation was the company’s tariff mitigation strategy. With ongoing concerns about potential tariff impacts, Tractor Supply emphasized its resilient business model and strategic advantages, including a predominantly U.S.-sourced product assortment, long-standing vendor relationships, and a flexible supply chain infrastructure.

The following slide outlines the company’s approach to managing tariff risks:

Tractor Supply also highlighted progress with its "Final Mile Delivery" service, which enables direct and digital sales fulfillment. The company has established 145 delivery hubs covering an additional 220 spoke stores, reaching 15% of its store network at the halfway point of the year. Management noted that in markets where Final Mile is active, customer satisfaction scores are higher, return rates are 10 times lower, and there’s stronger repeat engagement from high-value customers.

The average order value for Final Mile Delivery is approximately $400, significantly higher than typical in-store transactions. This initiative represents an important component of Tractor Supply’s omnichannel strategy and supply chain differentiation.

Forward-Looking Statements

Tractor Supply reconfirmed its fiscal year 2025 guidance, projecting net sales growth of 4% to 8% and comparable store sales growth of 0% to 4%. The company expects an operating margin rate between 9.5% and 9.9%, net income between $1.07 billion and $1.17 billion, and diluted earnings per share between $2.00 and $2.18.

Management indicated they are actively managing to the midpoint of this guidance range. The company also noted that share repurchases are expected to be in the range of $325 to $375 million, below its initial outlook.

The following slide details the company’s full-year guidance:

Looking further ahead, Tractor Supply outlined its "Life Out Here 2030" strategic vision, which focuses on delivering legendary customer experiences, advancing its ONETractor capabilities, operating "the Tractor Way," supporting its team members, and generating healthy shareholder returns.

This Q2 performance represents a significant improvement from the company’s disappointing first quarter, when it missed analyst expectations with an EPS of $0.34 versus the forecasted $0.37. The return to positive comparable sales growth and the maintenance of full-year guidance suggest management’s confidence in continued momentum through the second half of 2025.

Full presentation:

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