Tractor Supply released their Q4 2025 earnings which was below expectations for a few different reasons. Most relevant to outdoor cooking, they continued to see pressure in consumer discretionary spending.
Before getting into the details, I want to acknowledge that our fourth quarter results came in below our expectations. Results reflected a shift in consumer spending with essential categories remaining resilient while discretionary demand moderated and emergency response was absent versus last year.
Hal Lawton, President and CEO or Tractor Supply
Tractor Supply only recently started to lean more heavily into outdoor cooking. They started to carry Weber products in their stores and saw some early success from it. This spring they plan to focus more out grill products.
As we prepare for the spring selling season, we’re leaning into targeted newness in the categories where customers are actively investing. That includes refreshed assortments in lawn and garden on our exclusive GroundWork brand, including expanded outdoor living and grilling accessories and also a stronger, more curated riders presentation in our flagship stores featuring Bad Boy, Cub Cadet and Toro.
Hal Lawton, President and CEO or Tractor Supply
In what could be a tailwind for grill sales for all retailers, Tractor Supply expects consumers to receive large tax returns this year. Much like with stimulus checks in 2021, when consumers receive extra money they often spend it on discretionary purchases.
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
Tractor Supply serves rural customers, so it’s unique from other large retailers. Some of their stores though are more in the exurbs that purely rural. Their focus on the outdoors could take customers from other retailers that also play in that area.
To service rural customers, Tractor Supply has been focusing on their Direct Sales and Final Mile initiatives. They aim to give the retailer an advantage on shipping over other retailers.
2 of our highest priority initiatives are Direct Sales and Final Mile, which are gaining traction and becoming increasingly important in how we serve customers with larger, more complex and needs-based purchases. In Direct Sales, we’re continuing the rollout of this initiative, including building the capabilities, tools and operating discipline needed to scale, along with plans to approximately double our sales force over the course of the year.
Turning to Final Mile. Our focus in 2026 is on lowering the cost and improving the efficiency of our digital order delivery while enabling large and bulky store purchases and supporting Direct Sales. To do that, we’re planning to add more than 150 new hubs this year, take us to approximately 375 hubs and covering more than 50% of our stores by year-end. One way to think about that level of coverage is that it gives us last-mile delivery capabilities across more than 1,200 stores and reaching over 15 million customers. We are also increasing utilization of our own delivery network while further integrating with gig providers, allowing us to optimize Final Mile execution and lower our cost per delivery across all channels.
Hal Lawton, President and CEO or Tractor Supply
They’re also investing in technology to serve customers and optimize their inventory flow. This includes deepening their relationship with OpenAI.
More broadly on the technology front, we expanded our use of AI across the enterprise including expanding our relationship with OpenAI. The capabilities are improving forecasting, inventory flow and team member productivity, helping us operate more efficiently and better serve our customers.
Hal Lawton, President and CEO or Tractor Supply