Tractor Supply Company (TSCO) | Investment Case

1. Company Snapshot

1.a. Company Description

Tractor Supply Company operates as a rural lifestyle retailer in the United States.The company offers a selection of merchandise, including equine, livestock, pet, and small animal products necessary for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products, such as heating products, lawn and garden items, power equipment, gifts, and toys; work/recreational clothing and footwear; and maintenance products for agricultural and rural use.It provides its products under the 4health, Producer's Pride, American Farmworks, Red Shed, Bit & Bridle, Redstone, Blue Mountain, Retriever, C.E. Schmidt, Ridgecut, Countyline, Royal Wing, Dumor, Strive, Groundwork, Traveller, Huskee, Treeline, JobSmart, TSC Tractor Supply Co, Paws & Claws, and Untamed brands.

As of June 25, 2022, it operated 2,016 Tractor Supply stores in 49 states; and 178 Petsense stores in 23 states.The company operates its retail stores under the Tractor Supply Company, Del's Feed & Farm Supply, and Petsense names; and operates websites under the TractorSupply.com and Petsense.com names.It sells its products to recreational farmers, ranchers, and others.

The company was founded in 1938 and is based in Brentwood, Tennessee.

Show Full description

1.b. Last Insights on TSCO

Tractor Supply Company's recent performance faced negative drivers despite strong Q3 results. The company's decision to exit a position due to solid fundamentals but unspecified concerns (Tractor Supply: Time To Let A Winner Go) may have impacted investor sentiment. Although Q3 earnings rose 8.6% and sales grew 7.2%, reaching a record $3.72 billion, some analysts may have concerns about sustainability. The company benefits from recurring rural needs and higher-income cohorts, making the business relatively recession-resistant.

1.c. Company Highlights

Last Price	54.38
Change Percentage	0.57%
Open	54.16
Previous Close	54.07
Market Cap ( Millions)	28770
Volume	4480092
Year High	63.99
Year Low	46.85
M A 50	54.74
M A 200	54.86

FCF Yield	3.31%
Dividend Yield	1.69%
ROE	46.18%
Debt / Equity	222.38%
Net Debt / EBIDTA	280.49%
Price To Book	11.21
Price Earnings Ratio	26.11
Price To FCF	30.21
Price To sales	1.87
EV / EBITDA	17.38

2. Tractor Supply's Q3 Results: A Strong Performance

Tractor Supply Company reported a robust third-quarter 2025 performance, with net sales reaching a record $3.72 billion, representing a 7.2% increase. The company's comparable store sales grew 3.9%, driven by a balance of transaction growth of 2.7% and average ticket growth of 1.2%. Gross margin expanded 15 basis points to 37.4%, while diluted earnings per share (EPS) came in at $0.49, surpassing estimates of $0.4828. Selling, general, and administrative expenses rose 8.4% to $1.05 billion.

Publication Date: Oct -25

                                    📋 Highlights
                                    Record Net Sales Growth:
                                                Tractor Supply achieved a 7.2% increase in net sales to $3.72 billion, with comparable store sales rising 3.9% (2.7% transaction growth + 1.2% average ticket growth).
Gross Margin Expansion:
                                                Gross margin improved 15 basis points to 37.4%, while SG&A expenses grew 8.4% to $1.05 billion, and diluted EPS rose 8.9% to $0.49 YoY.
Capital Returns:
                                                Over $600 million in shareholder returns through dividends and share repurchases year-to-date, reflecting strong capital allocation discipline.
Strategic Store Growth:
                                                100 new stores planned for 2026, with new store productivity exceeding pro forma expectations and expansion prioritized in the West and Idaho.
AI & Retail Media Momentum:
                                                Triple-digit YoY growth in retail media revenue, AI integration (e.g., FAST team automation) boosting operational efficiency, and hunting supplies/ammunition poised for revenue growth.

                                

Category Performance and Customer Metrics

The company's seasonal categories showed significant strength, driven by an extended summer season, while core year-round categories continued to demonstrate momentum. Tractor Supply saw strong performance in tractors and riders, lawn and garden sprayers and chemicals, and power equipment, parts, and accessories. Customer satisfaction reached a record high for the 17th consecutive quarter, with customer engagement metrics, including total customer count and Neighbors Club membership, also achieving record Q3 highs.

Guidance and Outlook

For the fourth quarter, Tractor Supply expects comparable store sales growth of 1% to 5%. The company is narrowing its fiscal 2025 guidance range, anticipating net sales growth of 4.6% to 5.6% and diluted EPS in the range of $2.06 to $2.13. Looking ahead to 2026, the company expects to open 100 new stores and maintain the step-up in comps forecasted for the second half of 2025. Management anticipates operating margin expansion driven by gross margin growth and SG&A leverage.

Valuation and Growth Prospects

With a P/E Ratio of 27.02 and an ROE of 46.18%, Tractor Supply's valuation suggests that the market has high expectations for the company's future growth. Analysts estimate revenue growth of 6.4% for next year. The company's strong brand and customer loyalty, as well as its strategic initiatives, such as the expansion of hunting supplies and the development of its retail media business, are expected to drive long-term growth.

Operational Highlights and Strategic Initiatives

Tractor Supply's direct sales rep build-out is on track, covering over 300 stores, with 48 specialists hired, driving $2,000 a week in sales. The company is also investing in AI, with a focus on enterprise software, custom-built software, and automation, to drive efficiencies and improve operations. The expansion of hunting supplies, including ammo, is expected to be a growth driver, with the company seeing an opportunity for revenue growth.

3. NewsRoom

Retailers Are Snatching Up Real Estate Again

Dec -03

Source: wsj.com

Top 15 High-Growth Dividend Stocks For December 2025

Dec -02

Source: seekingalpha.com

Are TSCO Stock Investors Happy, or Did They Get Burned?

Nov -30

Source: fool.com

Tractor Supply Company (NASDAQ:TSCO) Receives Average Rating of “Moderate Buy” from Analysts

Nov -29

Source: defenseworld.net

Can Tractor Supply's Rural Lifestyle Demand Offset Cost Pressures?

Nov -27

Source: zacks.com

Will Tractor Supply's Margins Hold Steady Amid Rising Supply Costs?

Nov -25

Source: zacks.com

Tractor Supply Paper Clover Campaign Gives the Gift of Opportunity to 4-H Youth

Nov -25

Source: businesswire.com

AXQ Capital LP Takes Position in Tractor Supply Company $TSCO

Nov -25

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.40%)

6. Segments

Retail Sale of Products

Expected Growth: 6.4%

Aligns with global revenue growth hypothesis, driven by steady demand for agricultural and pet care products, with potential for expansion in e-commerce and rural areas.

7. Detailed Products

Livestock Feed

Tractor Supply Company offers a wide range of livestock feed products, including hay, grains, and supplements, to support the health and well-being of livestock.

Pet Food and Supplies

Tractor Supply Company provides a variety of pet food and supplies, including dog food, cat food, and pet accessories, to support the health and happiness of pets.

Fencing and Farming Supplies

Tractor Supply Company offers a range of fencing and farming supplies, including fencing materials, farm equipment, and tools, to support agricultural and livestock operations.

Lawn and Garden Supplies

Tractor Supply Company provides a variety of lawn and garden supplies, including seeds, fertilizers, and gardening tools, to support lawn care and gardening activities.

Clothing and Footwear

Tractor Supply Company offers a range of clothing and footwear, including workwear, outerwear, and footwear, to support outdoor activities and occupations.

Tools and Hardware

Tractor Supply Company provides a variety of tools and hardware, including hand tools, power tools, and building supplies, to support DIY projects and repairs.

8. Tractor Supply Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Tractor Supply Company has a low threat of substitutes due to its unique product offerings and strong brand recognition.

Bargaining Power Of Customers

Tractor Supply Company's customers have some bargaining power due to the availability of alternative retailers, but the company's strong brand loyalty and customer service mitigate this threat.

Bargaining Power Of Suppliers

Tractor Supply Company has a low bargaining power of suppliers due to its large scale of operations and ability to negotiate favorable terms with suppliers.

Threat Of New Entrants

Tractor Supply Company faces a moderate threat of new entrants due to the capital requirements and regulatory hurdles in the industry, but new entrants could still potentially disrupt the market.

Intensity Of Rivalry

Tractor Supply Company operates in a highly competitive industry with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	49.44%
Debt Cost	3.95%
Equity Weight	50.56%
Equity Cost	8.00%
WACC	6.00%
Leverage	97.77%

11. Quality Control: Tractor Supply Company passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Build-A-Bear Workshop

A-Score: 6.1/10

Value: 5.1

Growth: 6.9

Quality: 7.0

Yield: 5.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

AutoZone

A-Score: 5.9/10

Value: 3.7

Growth: 7.2

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

O'Reilly Automotive

A-Score: 5.8/10

Value: 2.9

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

eBay

A-Score: 5.5/10

Value: 3.3

Growth: 6.1

Quality: 6.9

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

Amazon

A-Score: 5.3/10

Value: 1.8

Growth: 8.8

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

Tractor Supply

A-Score: 5.0/10

Value: 2.4

Growth: 7.3

Quality: 5.4

Yield: 3.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.47%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.00%

Tractor Supply Company - US8923561067

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TSCO

1.c. Company Highlights

Expensive

Less Volatile

Stable Momentum

Earnings Beats

Strong Momentum

Higher Growth

Higher Yield

More Volatile

Earnings Miss

Revenues Miss

Average Growth

Revenues Beats

2. Tractor Supply's Q3 Results: A Strong Performance

Category Performance and Customer Metrics

Guidance and Outlook

Valuation and Growth Prospects

Operational Highlights and Strategic Initiatives

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.40%)

6. Segments

Retail Sale of Products

Expected Growth: 6.4%

7. Detailed Products

Livestock Feed

Pet Food and Supplies

Fencing and Farming Supplies

Lawn and Garden Supplies

Clothing and Footwear

Tools and Hardware

8. Tractor Supply Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Tractor Supply Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

54.38$

Current Price

54.38$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA