TSCO - BUY - Balancing a Disappointing May with Early Signs of Stabilization (June-QTD)—Refund-Related Margin Investments Support Case for 2027 EPS Growth; Lowering PT to $40

Research evidence excerpt

TSCO - BUY - Balancing a Disappointing May with Early Signs of Stabilization (June-QTD)—Refund-Related Margin Investments Support Case for 2027 EPS Growth; Lowering PT to $40

July 24, 2026

Steven Forbes, CFA, CPA steven.forbes@guggenheimpartners.com TSCO - BUY - Balancing a Disappointing May with

212 381 4188 Early Signs of Stabilization (June-QTD)—Refund-

John Heinbockel

john.heinbockel@guggenheimpartners.com Related Margin Investments Support Case for 2027

212 381 4135 EPS Growth; Lowering PT to $40 Julio Marquez

julio.marquez@guggenheimpartners.com

212 823 6605 Key Message: TSCO's 2Q 2026 operating results broadly missed our expectations

Jacob Nivasch (Exhibit 1), mainly due to an especially challenging May—with management noting

jacob.nivasch@guggenheimpartners.com that monthly (May) declines within big ticket & seasonal hardlines represented a 200

212 338 8837 basis point full-quarter comp headwind, more than offsetting positive comps in both

April & June. Of equal importance, despite ongoing companion animal headwinds Max Horowitz

max.horowitz@guggenheimpartners.com —with the category once again performing below the company average—trends

212 518 9974 improved sequentially and management noted early greenshoots on the back of

recent merchandising efforts (i.e., nationwide category resets including localization,

fresh & frozen assortment expansion, dog-cat food assortment rebalancing, and

enhancements behind digital pet shopping experience). When combined with our belief

TSCO BUY thatfundedmanagement'sinvestments updated(based on2026our outlookestimates)incorporatesinto TSCO's~$115price-valuemillion ofperception—tariff-refund

Tractor Supply Company majority: freight-related (i.e., fuel costs); minority: price/value-related (augmented by