5 Revealing Analyst Questions From Tractor Supply's Q1 Earnings Call
Tractor Supply's first quarter 2025 performance was shaped by delayed spring weather and persistent pressure in big-ticket seasonal categories. Management pointed to robust customer transactions and growth in consumable, usable, and edible categories, but noted that adverse weather conditions, especially in southern markets, held back overall sales. CEO Hal Lawton described the quarter as 'softer than expected,' citing the three-week delay in spring's arrival as a major headwind, with strong winter goods offset by weaker demand for spring merchandise.
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Revenue: $3.47 billion vs analyst estimates of $3.53 billion (2.1% year-on-year growth, 1.9% miss)
EPS (GAAP): $0.34 vs analyst expectations of $0.37 (9.1% miss)
Adjusted EBITDA: $369.2 million vs analyst estimates of $386.1 million (10.6% margin, 4.4% miss)
EPS (GAAP) guidance for the full year is $2.00 at the midpoint, missing analyst estimates by 7.5%
Operating Margin: 7.2%, in line with the same quarter last year
Locations: 2,517 at quarter end, up from 2,435 in the same quarter last year
Same-Store Sales were flat year on year (1.1% in the same quarter last year)
Market Capitalization: $27.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Peter Benedict (Baird) asked for clarification on the tariff assumptions embedded in near-term guidance. CEO Hal Lawton explained that Q2 guidance assumes current tariff rates remain in place and that the team is monitoring developments to adjust as needed.
Bharat Rao (JPMorgan) inquired about expectations for big-ticket category improvement and the rationale behind the full-year sales range. Lawton noted that guidance assumes no significant rebound in big-ticket sales and that core needs-based categories are expected to sustain growth.
Josh Young (Truist) questioned the scope and timing of vendor price increases and Tractor Supply's willingness to pass through costs. Lawton confirmed that the company has not yet taken price increases, citing ongoing uncertainty, but expects discussions to intensify in coming months.
Michael Lasser (UBS) requested clarity on the relationship between tariff exposure and the company's sales and inflation assumptions in the second half. Lawton and CFO Kurt Barton explained that cost increases from tariffs incurred in Q2 will likely impact pricing and margins in the back half of the year.
Steven Forbes (Guggenheim) asked about the integration and margin outlook for Tractor Supply Pet Rx. Chief Technology, Digital, and Strategy Officer Rob Mills reported strong early customer adoption and a focus on seamless digital and in-store integration, with further progress expected in coming quarters.
In future quarters, the StockStory team will be watching (1) how effectively Tractor Supply manages tariff-related cost increases and potential pricing actions, (2) whether transaction growth and market share gains in needs-based categories continue to offset softness in discretionary big-ticket items, and (3) the pace of adoption and margin contribution from Tractor Supply Pet Rx and other new strategic initiatives. Execution on these priorities will be critical to navigating ongoing macroeconomic uncertainty.
Tractor Supply currently trades at $52.48, up from $50.67 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it's free).
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