Bear of the Day: Tractor Supply (TSCO)

Tractor Supply (TSCO), a Zacks Rank #5 (Strong Sell), is the largest U.S. retail chain focused on farm, ranch, and rural lifestyles. The company provides everything from livestock and pet supplies to tools, apparel, and outdoor equipment, both in-store and online.

The stock has performed well over the years, but has struggled over the last two years. And with a recent earnings miss, the stock has dropped below 2025 lows.

About the Company

Headquartered in Brentwood, Tennessee, TSCO serves recreational farmers, ranchers, tradesmen, and small businesses.

Tractor Supply operates about 2,395 stores across 49 states, along with 207 Petsense pet specialty stores. Its stores are mostly in rural areas and suburban markets, with 15,000–20,000 square feet of inside space and additional outdoor areas for agricultural demonstrations.

The company also sells online through TractorSupply.com and Petsense.com, offering expanded product selections and services like buy online, pick up in-store.

TSCO has a market cap of $24B, with a Zacks Style Score of “A” in Growth and “A” in Momentum.

Q4 Earnings Miss

Tractor Supply reported a softer-than-expected Q4, with EPS of $0.43 missing the $0.46 consensus and revenue of $3.90 billion also coming in light. Comparable sales rose just 0.3% as management highlighted a clear shift in consumer behavior during the quarter saying discretionary spending weakened or moved outside the company’s core categories.

While essential categories such as livestock, poultry, and pet supplies remained resilient with low to mid-single digit growth, big ticket items saw a notable step down from Q3 as customers became more selective.

Looking ahead, Tractor Supply issued cautious FY26 guidance, calling for EPS of $2.13 to $2.32 and revenue growth of 4 to 6%, both below expectations, alongside modest 1 to 3% comp growth.

Earnings Estimates Fall After Earnings

Analysts are lowering estimates across all time frames, reflecting the company’s outlook.

For the current quarter, estimates have fallen for $0.38 to $0.35, or 8%. For next quarter, estimates fell from $0.89 to $0.86 or 3%.

Looking down the road, next year’s numbers have been lowered 7% over the last 90 days.

Technical Take

The stock is taking out 2025 lows, which means investors are feeling some pain, especially in a market that has seen some selling.

TSCO likely continues lower towards the $38 level, which is the 161.8% Fibonacci extension target that can be found drawing 2025 lows to highs.

Investors interested in the stock, should wait out the down move and target that level under $40.

In Summary

Tractor Supply remains a high-quality operator with a strong niche in rural and farm retail, but the near-term story has clearly weakened. A combination of softer discretionary demand, cautious guidance, and falling earnings estimates suggests the stock may continue to face pressure despite its long-term strengths.

While the business is still executing on key initiatives and maintaining resilience in essential categories, the technical breakdown and negative estimate revisions point to limited upside in the near term.

For now, investors looking at the retail space, should turn to Five Below (FIVE). The stock is a Zacks Rank #1 (Strong Buy) that is approaching all-time highs.

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This article originally published on Zacks Investment Research (zacks.com).

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