Tractor Supply Company: 2Q Preview: Cutting EPS estimates by 10%

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Tractor Supply Company: 2Q Preview: Cutting EPS estimates by 10%

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Tractor Supply Company

2Q Preview: Cutting EPS estimates by 10%

Reiterate Rating: NEUTRAL | PO: 33.00 USD | Price: 31.01 USD

Lowering ests given challenging operating environment 17 July 2026

We expect TSCO will cut guidance when they report 2Q results on 7/23; 80% of the Equity

company’s business (farm and ranch, pet, home improvement) remains challenged and

higher gas/diesel prices are pressuring the company’s core consumer. We are lowering

Key Changesour F26/F27 EPS ests by 9%/12% respectively to $1.95/$2.02 to reflect our lower comp

and gross margin forecasts. We reiterate our Neutral rating and see a balanced (US$) Previous Current

risk/reward; with shares trading at 15x P/E (vs 20x pre 1Q results), we think the market Price Obj. 44.00 33.00

expects a cut and we think the multiple will remain range bound ahead of more difficult 2026E Rev (m) 16,240.2 15,877.4

compares in 3Q. We lower our PO to $33 from $44 to reflect our lower estimates and a 2027E Rev (m) 17,015.1 16,476.1

reduced multiple (based on 16x vs 19x prev) our 2027E due to ongoing sales uncertainty. 2028E Rev (m) 17,847.5 17,282.1

Softer dog food sales driving down companion animal 2026E EPS 2.13 1.95 2027E EPS 2.30 2.02

We expect the softness in companion animal (24% of sales) will continue. TSCO remains 2028E EPS 2.47 2.20

overexposed to portions of the business that are growing slower: dog vs. cat, dry vs. 2026E DPS 0.93 0.96

fresh, and large vs. small bags. Mgmt is making proactive changes; this includes

changing Pet leadership in April, increasing shelf space for cat, adding fresh and frozen Christopher Nardone

food to 700 stores by year end, and making price investments in big bags in mid-May, Research Analyst