Is the Sky the Limit for Tractor Supply?

All of the key metrics appear to be lining up for Tractor Supply, at least according to its most recent quarterly report.

Per a July 24 news release from Tractor Supply itself, the rural retailer racked up an impressive Q2 scoresheet, including the following wins:

• Second-quarter net sales improved 4.5% YoY to $4.4 billion, with comparable store sales ticking upward by 1.5% — a result termed by CEO Hal Lawton as the “largest sales quarter ever,” as relayed by Retail Dive senior reporter Daphne Howland.
• Gross profit moved positively by 5.4% to $1.64 billion from 1.56 billion in Q2 2024. Meanwhile, the gross margin rate was pegged at 36.9% versus 36.6% in the year-prior second quarter. The latter was attributed to “disciplined product cost management” and the “continued execution of an everyday low price strategy.”
• Comparable transaction growth came in at 1%. Other improvements were found in operating income (which increased 2.9% to $577.8 million) and net income (which improved 1.1% to $430 million).

Further, Lawton appeared unfazed by the ongoing turbulence regarding the macroeconomic situation, highlighting his company’s reaffirmation of its rosy 2025 projections.

“As we enter the back half of 2025, we remain confident in our outlook, are encouraged by the momentum carrying into the quarter and continue to believe in the durability of our model. Despite external pressures, including economic uncertainty and shifting tariffs, our year-to-date performance and visibility into the remainder of the year provide a solid foundation to reaffirm our 2025 financial outlook,” he began.

“With a largely U.S.-sourced assortment, strong vendor partnerships and a flexible, scalable supply chain, we are well-positioned to navigate near-term dynamics and deliver long-term value for our shareholders,” he added.

‘Life Out Here’ Is Doing Very Well, CEO Says

Lawton told analysts that the company’s future looked very bright, invoking the retailer’s tagline in remarks: “Life out here is doing very well.”

In particular, growing interest in live poultry seemed to be bolstering Tractor Supply’s bottom line, as Howland indicated. The retailer’s yearly “chick days” drove record sales of live birds, as well as purchases of related supplies, including coops.

“More customers than ever are turning to backyard poultry,” CEO Hal Lawton said, stating that 2025’s “chick days” proved the “most successful to date,” drawing in existing customers as well as new faces.

And while softness in certain discretionary categories was offered up, per the CEO, topline figures showed growth and resilience, particularly in year-round categories. In addition, “seasonal spring goods, apparel, gifts, décor and big ticket items,” also showed strength, per Howland.

Only About 12% of Tractor Supply’s Product Assortment Comes From Direct Imports, and Analysts Seem Impressed

Howland cited Telsey Advisory Group analysts led by Joseph Feldman, on the elephant in the room: ongoing economic headwinds and the uncertainty presented by tariffs.

Feldman was quick to note that the majority of Tractor Supply’s inventory was sourced stateside, with only a small portion (about 12%) coming from direct imports. And with Tractor Supply engaging in a large-scale growth plan involving the opening of new stores (24 having been opened in the second quarter of 2025 alone), extensive remodels, focus on pets (particularly its Petsense by Tractor Supply banner), burgeoning loyalty program and retail media business, and a slew of other initiatives, Feldman and his colleagues saw substantial potential in the retailer’s short-term deliverables.

“Overall, we remain confident in Tractor Supply’s long-term strategy for Life Out Here 2030, which should drive long-term annual comp growth of 3%-5% and [EPS] growth of 8%-11%,” Feldman said.