Tractor Supply Company TSCO has reported fourth-quarter 2024 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. Meanwhile, sales and earnings per share (EPS) improved year over year. Sales benefited from higher store openings and improved comparable store sales (comps).

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Tractor Supply’s EPS of 44 cents improved 4.3% year over year but missed the Zacks Consensus Estimate of 45 cents.

Net sales grew 3.1% year over year to $3.77 billion. However, sales missed the Zacks Consensus Estimate of $3.8 billion. The increase in sales can be attributed to store openings and growth in comps.

Comps rose 0.6% year over year, driven by a 2.3% rise in comparable average transaction count, offset by a 1.7% decline in comparable average ticket. The increase in consumable, usable and edible products was in line with the company average, backed by improved unit growth, offset by pressures in average unit price.

Driven by the dismal results, Tractor Supply shares declined 5.4% in the pre-market trading session today. The Zacks Rank #3 (Hold) company’s shares have risen 7.6% in the past three months compared with the industry’s 13.9% growth.

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Tractor Supply’s Costs & Margins

Gross profit rose 2.8% to $1.33 billion and the gross margin declined 9 basis points (bps) year over year to 35.2%. Our model predicted gross profit to increase 3.8% and the gross margin to remain flat at 35.3%.

Selling, general and administrative (SG&A) expenses, as a percentage of sales, increased 60 bps year over year to 26.8%. In dollar terms, SG&A expenses, including depreciation and amortization, rose 5.5% year over year to $1.01 billion. The higher SG&A expense rate resulted from growth investments, which comprised higher depreciation, the onboarding of a new distribution center, and modest deleveraged fixed costs. These were partly offset by a strict focus on productivity, cost control and modest gains from its sale-leaseback strategy.

The operating income was down 4.8% year over year to $318.3 million. Meanwhile, the operating margin fell 69 bps to 8.44%. We estimated operating income to decline 4% and the operating margin to contract 70 bps to 8.4%.

TSCO’s Financial Position

Tractor Supply ended 2024 with cash and cash equivalents of $251.5 million, long-term debt of $1.8 billion, and total stockholders’ equity of $2.3 billion. It also provided a cash flow from operating activities of $1.4 billion in 2024. In the same period, the company incurred a capital expenditure of $784 million.

In the fourth quarter, Tractor Supply repurchased 2.7 million shares of the common stock for $154.4 million and paid out cash dividends of $117.3 million, returning $271.7 million to shareholders. In 2024, the company bought back 10.6 million shares for $560.8 million. It also paid out quarterly cash dividends of $472.5 million in fiscal 2024, returning $1.03 billion of capital to shareholders.

TSCO introduced 26 flagship stores and four Petsense by Tractor Supply stores in the fourth quarter. As of Dec. 28, 2024, the company operated 2,502 stores, including 2,296 Tractor Supply stores in 49 states and 206 Petsense by Tractor Supply stores across 23 states.

What to Expect From Tractor Supply in 2025?

For 2025, TSCO expects net sales growth of 5-7%. Comps are anticipated to increase 1-3%. The company expects an operating margin of 9.6-10%. The operating margin outlook includes 15-20 bps of investment for its Life Out Here 2030 strategic initiatives. The company predicts net income of $1.12-$1.18 billion. Earnings per share are expected to be $2.10-$2.22.

Tractor Supply expects capital expenditure, net of sale leaseback proceeds, of $650-$725 million. For 2025, capital plans include the opening of 90 Tractor Supply stores, continuing Project Fusion remodels and garden center upgrades, constructing the 11th distribution center, and launching 10 Petsense by Tractor Supply locations. TSCO anticipates share repurchases of $525-$600 million for 2025.

Key Picks

We have highlighted three better-ranked stocks, namely Five Below FIVE, DICK'S Sporting Goods DKS and SharkNinja, Inc. SN.

Five Below is a specialty value chain retailer that provides a wide range of premium quality and trendy merchandise for $5 or below. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Five Below’s current financial-year sales indicates growth of 8.6% from the year-ago reported figure. The company has a trailing four-quarter earnings surprise of 39%, on average.

DICK'S operates as a major omni-channel sporting goods retailer, offering athletic shoes, apparel, accessories, and a broad selection of outdoor and athletic equipment. DKS presently carries a Zacks Rank of 2 (Buy).

The consensus estimate for DICK'S current financial-year sales and EPS indicates growth of 2.4% and 7.6%, respectively, from the year-ago reported figures. DKS has a trailing four-quarter earnings surprise of 11.4%, on average.

SharkNinja, a diversified, product design and technology company that creates lifestyle solutions through products for consumers, currently has a Zacks Rank #2.

The Zacks Consensus Estimate for SharkNinja’s current financial-year sales and EPS indicates growth of 25.8% and 31.1%, respectively, from the year-ago quarter’s reported figures. SN has a trailing four-quarter earnings surprise of 11.8%, on average.

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Tractor Supply Company (TSCO) : Free Stock Analysis Report

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