Tractor Supply’s pet business grows 5% in Q3 as sales trends improve

Tractor Supply’s net sales rose 5.1% year on year (YoY) to $3.91 billion (€3.40B) in the third quarter (Q3) of fiscal year (FY) 2026, ended 26 September.

For Hal Lawton, President and Chief Executive Officer of Tractor Supply, the third quarter marked a “step forward” for the company, with improved “sales momentum” and “broader strength” across the businesses.

“The actions we are taking around value, pet, digital and convenience gained traction in the quarter,” he admitted. 

According to the company, quarterly growth was supported by new store openings, the acquisition of mobile veterinary care provider VIP Petcare earlier in the year and higher comparable store sales.

Comparable sales and store count

Comparable store sales increased 0.4%, down from 3.9% growth in Q3 2025. Performance improved sequentially through the quarter, moving from negative growth in July to modest growth in August and strengthening further in September.

During the quarter, the company opened 23 Tractor Supply stores and closed 74 Petsense by Tractor Supply stores as part of its restructuring. Following these closures, 135 Petsense stores will remain. 

According to Kurt Barton, Chief Financial Officer of Tractor Supply, the repositioning of Petsense will remove losses from the business.

Pet business growth

The American rural retailer’s companion-animal segment continued to underperform the company average, although trends have improved steadily since the first quarter. CEO Hal Lawton said pet ownership headwinds, particularly new-pet acquisition, continued to affect demand in certain categories.

However, including new stores, Allivet and the VIP Petcare acquisition, the total pet business grew 5% in the quarter.

Companion-animal comparable sales improved sequentially from a decline of approximately 4% in Q1 to 3% in Q2 and 2% in Q3, according to management. While the category remained below expectations, Lawton said the sequential improvement was encouraging.

“Our work around assortment, value, exclusive brands, services, and digital is beginning to resonate,” said Lawton to investors. 

He mentioned strong performance from 4health, Tractor Supply’s own pet food brand, as well as triple-digit growth in its pet subscription business.

Tractor Supply also raised its year-end Freshpet rollout target from more than 700 stores to approximately 1,000, citing strong performance. Chief Merchandising Officer Seth Estep said around 40% of customers buying Freshpet at Tractor Supply were new or reactivated pet customers for the retailer.

Digital convenience and services 

The company said its pet subscription business grew at a triple-digit rate, while the company continues to expand final-mile delivery and its online shopping experience to make it more convenient for customers to purchase pet products.

The retailer is also developing its pet-services offering. Estep said the in-store pet wash programme was driving customer engagement through its Neighbor’s Club loyalty programme. The company has also completed the integration of Allivet as the prescription fulfilment arm for VIP Petcare, connecting its online pet pharmacy with its mobile veterinary-care business.

Lawton added that Tractor Supply believed it gained market share in essential categories, including pet, during Q3. 

In addition, Petsense by Tractor Supply partnered with Instacart, a North American online grocery and retail delivery platform, to offer same-day delivery. The partnership enables customers to receive pet food and supplies in as little as an hour. Petsense joins more than 2,200 national and local retail banners on the Instacart Marketplace.

Profitability

Tractor Supply’s gross profit increased 2.6% to $1.42 billion (€1.24B), while its gross margin narrowed to 36.4% from 37.4% a year earlier. The decline reflected higher transportation and fuel costs, alongside additional investments to strengthen its price-value position.

Operating income fell 10.2% to $307.7 million (€267.7M), while net income declined 13.3% to $224.7 million (€195.5M). 

Nine-month overview 

For the first nine months of FY2026, Tractor Supply’s net sales rose 3.6% YoY to $12.04 billion (€10.48B), while gross profit increased 2.9% to $4.41 billion (€3.84B). Gross margin stood at 36.61%.

Net income declined 13.6% to $750 million (€652.5M), and diluted EPS fell to $1.43 (€1.24) from $1.63 (€1.42) a year earlier.

Guidance

Tractor Supply reaffirmed its FY2026 financial outlook, projecting net sales growth of 2.5% to 3.5%, comparable store sales growth ranging from a decline of 1% to flat, and an operating margin of 8.0% to 8.3%.

Net income is expected to range from $930 million to $990 million (€809.1M to €861.3M), while diluted EPS is projected at $1.78 to $1.88 (€1.55 to €1.64).

“The sales improvement we saw as we exited the third quarter is a positive sign, and our current planning assumptions contemplate positive comparable sales during the fourth quarter. At the same time, our outlook remains measured and we have considered a variety of scenarios,” Barton said.

Management admitted that the fourth quarter remained the company’s most weather-sensitive period, with consumer uncertainty continuing to affect discretionary and big-ticket purchases. The company expects positive comparable sales in Q4, while continuing to focus on pricing, product costs, supply-chain productivity and expense control.

Executive changes

Tractor Supply announced the appointment of Executive Vice President Fahim Siddiqui as Chief Technology and Digital Officer, effective 26 October 2026.

With more than 30 years of experience in business and technology, including retail and digital transformation, Siddiqui will oversee the retailer’s technology and digital operations.

His responsibilities will span IT infrastructure, business applications, cybersecurity and digital commerce, with a focus on supporting employees, improving the customer experience and strengthening the systems underpinning the company’s long-term growth.