Tractor Supply reported their Q2 earnings this week and they sounded confident about the strategy they’ve been implementing. They re-affirmed guidance for the year and are confident in their ability to navigate the consumer pressures and tariff environment.

There wasn’t any grill specific talk on the call, it was more about their broader business. Grills sales still aren’t a major part of their business but it’s an area they’ve been focused on. They announced a partnership with Weber last year and started selling Weber grills at all their stores.

Sales Momentum

Spring selling started a bit late this year. April was wet, but Tractor Supply still managed comp sales growth through the quarter. They saw momentum in May and June, which has continued into Q3.

Third, average unit retail turned positive, right in line with the inflection point that we called out at the beginning of the year and last quarter. This shift supported comp ticket growth in the quarter and positions us well for the back half of the year. And fourth and perhaps most importantly, we saw sequential comp sales improvement across the quarter. Each period performed better than the one before it, and that momentum has continued into early Q3.

Hal Lawton, President and CEO of Tractor Supply

Tractor Supply had low expectations for big ticket purchases, which grills fall into. While overall the category performed better than they expected, they still saw softness.

Big ticket performed better than we anticipated. Customers continue to rely on the trusted advice of our team members when navigating larger purchases, a testament to the legendary service that defines the Tractor Supply in-store experience. We also believe we somewhat benefited from the bathtub effect as seasonal demand shifted from Q1 into Q2 and has continued on into Q3. In total, these were moderated by some softness in select discretionary categories, including pet hardlines, gun safes and air compressors.

Hal Lawton, President and CEO of Tractor Supply

As an aside from all the important information on Tractor Supply, whenever I read their CEO’s name, Hal Lawton, I can’t help but think of Cal Naughton (John C. Reilly’s character) from Talladega Nights. Is that relevant to anything? No, but I had to share that.

Digital and Delivery

Tractor Supply has a different customer base than other retailers. They focus just on their rural base, so they have unique challenges for delivery. While other retailers, like Lowe’s and Amazon, have been implementing a rural strategy, Tractor Supply knows their customer well and has a strong existing footprint.

Their using that footprint for their digital sales strategy and for their Final Mile delivery option. This is a big advantage not only from a supply chain perspective but also for developing customer relationships.

. Our digital sales grew at a mid-single-digit rate for the quarter. Orders fulfilled by our stores remain the most popular fulfillment option, accounting for nearly 80% of digital orders, a reflection of the convenience and strategic placement of our more than 2,300 stores across rural America. Our store footprint continues to be a powerful enabler of digital growth. We saw robust performance in deliver-from-store and same-day delivery, which reinforces the unique advantage of our local presence in the communities we serve. Together, these capabilities enhance convenience for our customers and drive continued momentum in our digital ecosystem.

Hal Lawton, President and CEO of Tractor Supply

With their Final Mile delivery program, they’re seeing an average order size of nearly $400. That’s much larger than their average basket in-store.

I often compare our approach to that of the auto parts retailers, leveraging their existing store networks to enable last-mile delivery without building costly new distribution infrastructure. We’re implementing a hub-and-spoke model. We are currently in market across 145 hub stores with an additional 220 stores covered as spokes. This brings our total final mile coverage to about 15% of stores covered at the halfway point of the year. By year-end, we anticipate having about 25% of the chain with Final Mile capabilities. All of this is in addition to the existing same-day delivery capabilities we have in all of our stores with third-party delivery partners. The early results from our Final Mile rollout are exceeding expectations, and they’re proving out the value of this initiative as a meaningful growth driver.

Colin Yankee, Executive VP & Chief Supply Chain Officer at Tractor Supply