Tractor Supply kicked off earnings season today to give us an early update on the consumer heading into grilling season. It was a bit of a mixed bag, they’re seeing some struggles but also early positive signs in seasonal categories.
One potential tailwind they mentioned on their previous earnings call was an increase in tax returns leading to increased spending. Consumers often use cash windfalls for discretionary purchases that they wouldn’t buy others, a category that grills fall into.
But in addition to spring coming up, which we know happens every year, just a little bit different time, we’re optimistic about the potential for tax refunds this year and think that could be very similar to, say, 2018, and that would be — the majority of that benefit would also be in the first quarter. So there are a number of things as we look out at the balance of the 7 weeks to go in the quarter that give us optimism.
Hal Lawton, President and CEO or Tractor Supply – Q4 2025 Earnings Call
The early indications are that what they were hoping for with tax returns didn’t come true. In fairness, there has also been additional economic headwinds since they reported earnings from geopolitical instability.
A good example of the consumer spending is around their tax refund behavior. While refunds did come through and we captured our fair share, customers are using these dollars more cautiously. A significant portion is going towards essentials, savings and debt reduction rather than discretionary spending, consistent with the broader environment we’re seeing. Our needs-based model continues to perform as expected in this environment, demonstrating its resiliency. We are seeing that in consistent demand across our core categories and continued engagement from our customers.
Hal Lawton, President and CEO or Tractor Supply
Despite tax return spending not coming through, Tractor supply is seeing some positive initial signs from their seasonal business. Tractor Supply isn’t a huge grill retailer but they’ve been leaning more heavily into it in recent years.
With that, we are very encouraged with the strength that we’re seeing right now in our seasonal business, mentioned earlier around live goods is performing very strong. Our big ticket categories in seasonal like with our zero-turn lineup assortment continues to perform.
Seth Estep, Chief Merchandising Officer at Tractor Supply
Digital Sales
It seems like every large retailer that sells grills continues to post significant gains in digital sales. I’d expect that to continue to grow as online shopping and delivery continues to get easier and quicker with hardlines.
Our digital business also continues to perform at a very high level with strong double-digit growth in the quarter and we saw meaningful increases in traffic along with improved conversion, reflecting the strength of our omnichannel experience. We’ve made targeted enhancements across our platform, including improvements to how customers shop and navigate our assortment as well as upgrades to our subscription offering as well as our order management and checkout experiences. These efforts are driving a more seamless and efficient experience and supporting continued momentum in the business.
Hal Lawton, President and CEO or Tractor Supply
Another tailwind for digital sales are brands moving away from their previous DTC focus. Traeger no longer sells DTC, and brands like Solo Stove that once were solely DTC focused are much more concentrated on wholesale growth.