Snapshot
Tractor Supply generated revenue of $15.5 billion and net income of $1.1 billion in FY2025. Diluted EPS was $2.06 in FY2025, and free cash flow was $996.6 million in FY2025.
In Q2 FY2026, revenue was $4.5 billion, gross profit was $1.7 billion, operating income was $467.1 million, and net income was $360.7 million. Diluted EPS was $0.69 in Q2 FY2026. Revenue was $15.8 billion and net income was $1.0 billion over TTM to Q2 FY2026. The company had 52,000 employees in FY2025.
Growth
Revenue increased 4.31% in FY2025 against FY2024, reaching $15.5 billion in FY2025. Revenue compound annual growth was 3.00% in FY2022–FY2025 and 7.89% in FY2020–FY2025. Diluted EPS increased 0.98% in FY2025 against FY2024 to $2.06 in FY2025; its compound annual growth was 1.99% in FY2022–FY2025 and 10.1% in FY2020–FY2025.
Free cash flow rose 28.3% in FY2025 against FY2024 to $996.6 million in FY2025, although its compound annual growth was −2.00% in FY2020–FY2025. In Q2 FY2026, revenue increased 2.29% against Q2 FY2025, while diluted EPS declined −14.8% and free cash flow declined −38.5%.
Profitability
Gross margin was 36.4% in FY2025, up 0.2 percentage points in FY2024–FY2025 and 1.0 percentage point in FY2020–FY2025. Operating margin was 9.45% in FY2025, down −0.4 percentage points in FY2024–FY2025 but up 0.1 percentage points in FY2020–FY2025. Pre-tax margin was 9.01% in FY2025 and net margin was 7.06% in FY2025; both were below their FY2020 levels.
Return on equity was 45.2%, return on assets was 10.6%, and return on invested capital was 21.9% in FY2025. Each was lower in FY2025 than in FY2021. In Q2 FY2026, gross margin was 37.1% and operating margin was 10.3%.
Balance sheet
Total debt was $1.8 billion and net debt was $1.6 billion in FY2025. Cash and short-term investments were $194.1 million in FY2025, while shareholders’ equity was $2.6 billion in FY2025. Working capital was $893.3 million in FY2025, below $1.2 billion in FY2021.
At Q2 FY2026, net debt was $2.0 billion, compared with $1.9 billion in Q1 FY2026 and $1.5 billion in Q2 FY2025. The current ratio was 1.3× and debt to equity was 0.8× in Q2 FY2026. Book value per share increased to $4.87 in FY2025 from $3.49 in FY2021.
Cash flow & capital return
Operating cash flow was $1.6 billion in FY2025, increasing 15.1% in FY2025 against FY2024. Capital expenditure was $638.7 million in FY2025, and free cash flow was $996.6 million in FY2025, up 28.3% in FY2025 against FY2024. Free cash flow represented 90.9% of net income in FY2025.
Dividends paid were $487.7 million and net share repurchases were $353.6 million in FY2025, for capital returned to shareholders of $841.2 million in FY2025. Weighted average shares were 530.0 million shares in FY2025, and the share count changed −8.92% in FY2020–FY2025. Free cash flow was $367.6 million in Q2 FY2026.
Valuation
Market capitalisation was $18.1 billion as of August 7, 2026. P/E was 18.0× as of August 7, 2026, below the five-year median of 24.2× and ten-year median of 22.9×, but above the industry median of 17.3×.
P/S was 1.1× as of August 7, 2026, below the five-year median of 1.7× and ten-year median of 1.6×, and above the industry median of 0.5×. P/B was 6.9× as of August 7, 2026, below the five-year median of 12.2× and ten-year median of 9.4×, and above the industry median of 1.9×. EV/Sales was 1.3× as of August 7, 2026, below its five-year and ten-year medians but above the industry median. EV/Cash flow was 34.6× as of August 7, 2026, below its five-year median and above its ten-year median.
What changed since last quarter
Revenue was $4.5 billion in Q2 FY2026, up 26.4% against Q1 FY2026 and 2.29% against Q2 FY2025. Management attributes the year-over-year sales increase in Q2 FY2026 primarily to new store openings, partly offset by lower comparable-store sales. Management cites weakness in seasonal and discretionary categories during May and below-average companion-animal category performance as contributors to the comparable-sales decline in Q2 FY2026.
Gross margin was 37.1% in Q2 FY2026, up 0.8 percentage points against Q1 FY2026 and 0.1 percentage points against Q2 FY2025. Operating margin was 10.3% in Q2 FY2026, up 3.8 percentage points against Q1 FY2026 but down −2.7 percentage points against Q2 FY2025. Management attributes the year-over-year operating-income decline in Q2 FY2026 to higher SG&A, including Petsense restructuring-related impairment and other charges and VIP Petcare acquisition costs.
Open questions
- How have comparable-store sales evolved across categories after the latest quarter?
- What is the expected financial effect of the Petsense restructuring?
- How will new-store openings affect sales growth and capital expenditure?
- What are the ongoing cash-flow effects of the federal tax-credit purchase and related payment timing?
Sources
- Form 10-Q filed August 6, 2026 — management’s discussion and analysis