Tractor Supply reported their Q4 2024 earnings today, and it sounds like they expect headwinds to lessen next year. They forecasted same store sales growth for 2025 of 1% to 3%. While their performance and guidance disappointed analysts, it’s a good to see projected improvement from 2024.
We expect comp sales for each of the quarters to be in a relatively tight range, consistent with our overall 2025 guidance. We anticipate that comp sales will be modestly stronger in the second half of the year as our compares ease and the headwind from deflation continues to moderate.
We are planning for positive comp transactions for the year, along with flat to slightly positive average ticket. We anticipate that deflation will be a modest headwind in the first half of the year. We believe we are nearing trough now having successfully managed through the deflation of 2023 and 2024.
Kurt Barton, CFO of Tractor Supply
Leaning Into Grills
Unlike other retailers, grill sales have been a bright spot for Tractor Supply. That continued to be the case in Q4, with warm weather sticking around later in the year than usual. They also saw an uptick in holiday sales, which is notable because that could be a trend in future years as they continue to invest in their online selling platform.
Additionally, grilling, mowers, trailers and truck toolboxes all performed well. Although our business is not primarily driven by holiday sales in Q4, we were encouraged by our performance during the holiday season, including recording our highest sales day of all time, on the day after Thanksgiving and strong performance for the holiday season.
Kurt Barton, CFO of Tractor Supply
They tested getting more into grills last year with selling Weber grills at stores. The test was successful, which led them to increase grill inventory through the summer. They’re continuing to lean into that and putting Weber grills in all their stores.
As the calendar will soon turn to spring, we’ve already transitioned over 600 of our stores to our spring sets and the remainder will do over the next couple of months. Our merchant teams have done an excellent job bringing value and innovation to our lineups for spring.
Examples include expanding Weber grilling to all stores and launching exclusive zero-turn mowers from Cub Cadet and the second year of the Toro Havoc as well as introducing new national live goods programs.
Hal Lawton, CEO of Tractor Supply
Tariffs
We’ve talked about tariffs for the past handful of months, as companies brace for any that could be coming in the future. Tractor Supply is strategizing to deal with tariffs through supply chain diversification. They noted how much of their business is directly imported, but they didn’t note how much was indirect. That could present additional exposure through supplier price increases that ultimately get passed on.
The needs-based nature of our business, combined with our deep understanding of these dynamics, allows us to proactively adapt to the market conditions. The same can be said about tariffs.
As Hal commented in his opening remarks, there are certainly a number of unknowns at this time on this important topic. This is a team that has been cycle tested with lessons learned from the prior administration.
For instance, we have continued to diversify our country of origin for imports. We have been scenario planning and are prepared to address as any proposed actions take effect. It is important to remember that this is a topic that affects all of retail.
We are differentiated as we only have about 12% or so of our sales that are direct imports and have a large key business that is domestically sourced. Given the fluid nature of the discussion on tariffs and the number of unknowns, our guidance does not assume any changes in tariffs at this time.
We successfully managed through tariffs in prior cycles, we will remain flexible and nimble to adapt to the changing environment. For fiscal 2025, we are forecasting net sales growth of 5% to 7% to $15.6 billion to $15.9 billion.
Kurt Barton, CFO of Tractor Supply