TD Cowen Flags Margin and Comparable Sales Pressure at Tractor Supply (TSCO)

Tractor Supply Company (NASDAQ:TSCO) is included among the 16 Best Dividend Stocks with Rising Payouts.

On January 30, TD Cowen lowered its price recommendation on Tractor Supply Company (NASDAQ:TSCO) to $53 from $55. It reiterated a Hold rating on the shares. The firm said the company is facing a difficult operating environment, which is putting pressure on comparable sales and margins. While softer fourth-quarter results were already expected, weaker comps and pressure on gross margins stood out as key negatives.

The day before, on January 29, Tractor Supply issued a weaker-than-expected outlook for annual sales and profit. Demand for heavy-duty farming equipment in the U.S. remains soft, as ongoing economic uncertainty continues to weigh on customer spending. The company also missed Wall Street expectations for fourth-quarter net sales. CEO Hal Lawton said the results reflected a shift in consumer behavior. Customers are still spending on essential products, but they are pulling back on discretionary items. This shift has made growth harder to sustain across certain categories.

Tariffs have added another layer of pressure. Higher import costs pushed the company’s gross margin slightly lower, to 35.1% from 35.2% a year ago. To deal with these cost increases, Tractor Supply raised prices on some products. At the same time, it introduced promotions on other items to support customers who are being more careful with their spending.

Looking ahead, the company expects fiscal 2026 net sales to grow between 4% and 6%. This is below analysts’ average estimate of 6.3% growth, which would bring sales to $16.61 billion, according to LSEG data. Its earnings outlook also fell short, with projected earnings per share between $2.13 and $2.23, compared with analyst expectations of $2.31. For the quarter ended December 27, Tractor Supply reported net sales of $3.90 billion, up about 3% from a year ago but slightly below estimates of $4 billion. Comparable store sales rose just 0.3%, missing expectations of a 2.28% increase. Net income also declined, falling 3.8% year over year to $297.7 million.

Tractor Supply Company (NASDAQ:TSCO) is a rural lifestyle retailer that serves recreational farmers, ranchers, and rural communities across the United States. It operates stores under the Tractor Supply Company and Petsense by Tractor Supply names, offering products that support everyday rural living.

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