AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Meaningful multiyear exclusive-brand sales and specialized rural assortment support differentiation. Broad competition and absent comparative cost or price evidence limit the strength of the structural advantage.
durability · 2/4 · Stable exclusive-brand penetration during 2021–2024 and substantial 2025 loyalty participation support persistence. They do not establish long-term protection, and the Petsense impairment demonstrates limits to brand durability across formats.
customer dependency · 1/4 · Trip consolidation and loyalty participation indicate convenience and preference. Customers can readily compare products and prices, and comparable transactions declined in early 2026; material switching friction is not demonstrated.
erosion resilience · 2/4 · First-half gross margin held slightly above the prior year, but tariff benefits and product costs contributed. Price-value investments, adjusted operating income contraction and realized Petsense impairment show mixed resilience.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Actual incremental investment in the price-value position indicates constrained pricing power alongside an everyday low-price policy. First-quarter transaction value rose 1.6%, but mix and basket effects prevent treating this as a realized item-price increase. The weak grade is an indirect assessment, not a claim of quantified price cuts.
retention · 2/4 · Loyalty members represented over 80% of 2025 sales and comparable store sales grew 1.2%, supporting engagement indirectly. First-quarter 2026 comparable transactions fell 1.0%. Membership participation does not establish a retention rate or dependency.
margin resilience · 2/4 · First-half 2026 gross margin increased seven basis points, supported partly by cost management and tariff benefits. Expense deleverage and a 5.1% second-quarter adjusted operating income decline limit evidence of broad earnings resilience or customer-funded cost pass-through.
contractual freedom · 2/4 · A dedicated market-specific pricing team and discretionary promotional policy demonstrate practical ability to adjust retail prices. Full contractual restrictions are not disclosed, and competitive pricing requirements constrain economic freedom.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.79
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 0.29
Financial strength87
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 47.34
- Debt / FCF (x)
- 0.20
- Net debt / operating income (x)
- -0.03
- Interest coverage (x)
- 21.22
- Current ratio (x)
- 1.34
Capital allocation90
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 70.15
- 3-year average dilution (%)
- -1.63
- 3-year average SBC / revenue (%)
- 0.36
- cashConversionGrade
- 59.23
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual 2025 capital expenditures and store expansion demonstrate investment execution, while diluted shares declined over 2023–2025. First-half 2026 distributions of $505.3 million accompanied $390 million of net borrowing, and Petsense restructuring exposed unsuccessful capital deployment. These are mixed outcomes; full cash-flow coverage and acquisition returns are unavailable.
incentive alignment · 3/4 · Actual practices include performance-linked equity, ownership requirements, clawback and hedging restrictions. Granted retention awards include five-year relative-TSR performance conditions, and the CEO received 80.8% of target cash incentive for 2025. Time-based awards, retirement vesting exceptions and missing ownership balances limit the conclusion; future vesting is not assumed.
execution · 2/4 · Reported 2025 comparable growth, exclusive-assortment engagement and actual 2026 core-store openings support execution. Flat-to-declining annual operating income, subsequent adjusted earnings contraction and Petsense restructuring offset these achievements. Execution quality is assessed from operating outcomes rather than management's favorable characterizations.
governance · 3/4 · Disclosed practices include annual individual-director assessments, a solely independent nominating committee, clawback and transaction restrictions, and an actual 93% advisory compensation approval in 2025. These establish substantial governance mechanisms, without proving exceptional board effectiveness or assuming the outcome of the 2026 vote.
Evidence
Our exclusive brands represented approximately 29%, 30%, and 29% of our total sales in fiscal 2023, fiscal 2022 and fiscal 2021, respectively.
Business; exclusive-brand sales penetration, fiscal 2021–2023 · Filed 23/02/2024
Our exclusive brands represented approximately 29%, 29%, and 30% of our total sales in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.
Business; exclusive-brand sales penetration, fiscal 2022–2024 · Filed 20/02/2025
In addition to selling products that bear high quality, nationally-known manufacturer brands, we also sell products under a number of brands owned by the Company (“Owned Brands”) as well as exclusively licensed product categories per licensing agreements with third parties (“Exclusive Product Categories”) that we consider to be important to our business.
Business; owned brands and exclusively licensed product categories · Filed 19/02/2026
Lawton’s performance is based on the following accomplishments: • Delivered disciplined execution of the Life Out Here 2030 strategy in a challenging and uneven retail environment, driving fiscal 2025 net sales of $15.5 billion, a 4.3% increase year over year, with comparable store sales growth of 1.2%, while continuing to gain share in the highly fragmented farm and ranch category; • Led the Company to five consecutive years of record revenue and earnings per share, generating $1.1 billion in net income and diluted EPS of $2.06 in fiscal 2025, reflecting disciplined execution while continuing to fund strategic growth initiatives; • Oversaw capital deployment to support long-term growth and productivity, including approximately $894.8 million of capital expenditures in fiscal 2025 across new stores, supply chain capacity, information technology and store investments; • Advanced disciplined expansion of the store network, overseeing the opening of 99 new Tractor Supply stores and five new Petsense by Tractor Supply stores, along with Project Fusion remodels and Garden Center transformations, while continuing to deliver strong new store productivity and an attractive store maturity curve; • Continued to scale and modernize the supply chain to support growth and efficiency, including mid-single-digit productivity improvements and the initiation of the Company’s 11th distribution center; • Expanded and deepened customer engagement, with Neighbor’s Club membership representing more than 80% of total sales, continued growth in digital and omnichannel engagement, and ongoing improvement in personalization and conversion; • Led the integration of Allivet, which generated approximately $100 million in sales during fiscal 2025, expanding the Company’s total addressable market in pet and animal health and strengthening omnichannel capabilities; • Returned significant capital to stockholders while maintaining balance sheet strength, including $848.5 million returned through share repurchases and dividends during fiscal 2025; and • Continued to invest in the Company’s more than 52,000 team members, supporting high engagement, low turnover, and all-time high customer service scores, reinforcing the Company’s differentiated service model.
Executive compensation; reported 2025 operating achievements, investment and loyalty-member sales participation · Filed 26/03/2026
Serving the rural lifestyle market, we act as a trip consolidator for numerous needs-based requirements of farm, ranch, and rural customers.
Business strategy; rural customer trip consolidation · Filed 19/02/2026
We compete with general merchandise retailers, home center retailers, pet retailers, specialty and discount retailers, independently owned retail farm and ranch stores, numerous privately-held regional farm store chains and farm cooperatives, as well as internet-based retailers.
Business; generic competitor categories · Filed 19/02/2026
Customers routinely use technology and a variety of electronic devices and digital platforms to rapidly compare products and prices, read product reviews, determine real-time product availability, and purchase products.
Risk factors; customer product and price comparison behavior · Filed 19/02/2026
The comparable store sales results for the first three months of fiscal 2026 included an increase in comparable average transaction value of 1.6%, partially offset by a comparable average transaction count decrease of 1.0%.
First-quarter 2026 MD&A; comparable transaction value and transaction count · Filed 07/05/2026
This increase was primarily attributable to disciplined product cost management and tariff-related benefits, partially offset by higher freight expense and incremental investments to strengthen the Company's price-value position.
Second-quarter 2026 MD&A; gross-profit drivers and price-value investments · Filed 06/08/2026
As a result of the quantitative impairment analysis, it was determined that the carrying value of the Petsense tradename was in excess of the fair value, resulting in a pre-tax impairment loss of approximately $11.0 million, included in the impairment expense income statement caption, in the fiscal three and six months ended June 27, 2026.
Intangible asset impairment analysis; realized Petsense tradename impairment · Filed 06/08/2026
Leveraging our value-driving offerings from our Neighbor’s Club loyalty program, we employ an “everyday low price” philosophy to consistently offer our products at competitive prices complemented by limited and strategically planned promotions throughout the year.
Business; everyday low pricing and promotion policy · Filed 19/02/2026
We also employ a dedicated inventory management team that focuses exclusively on forecasting and inventory replenishment, a committed merchandise planning team that concentrates on assortment planning, and a specialized pricing team that seeks to optimize market-specific pricing for our products.
Business; market-specific pricing function · Filed 19/02/2026
Nashville, Tennessee February 19, 2026 43 Table of Contents TRACTOR SUPPLY COMPANY CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) Fiscal Year 2025 2024 2023 (52 weeks) (52 weeks) (52 weeks) Net sales $ 15,524,046 $ 14,883,231 $ 14,555,741 Cost of merchandise sold 9,869,538 9,486,674 9,327,522 Gross profit 5,654,508 5,396,557 5,228,219 Selling, general and administrative expenses 3,693,108 3,481,863 3,356,258 Depreciation and amortization 494,011 447,162 393,049 Operating income 1,467,389 1,467,532 1,478,912 Interest expense, net 69,144 54,592 46,510 Income before income taxes 1,398,245 1,412,940 1,432,402 Income tax expense 302,158 311,700 325,176 Net income $ 1,096,087 $ 1,101,240 $ 1,107,226 Net income per share – basic (a) $ 2.07 $ 2.05 $ 2.03 Net income per share – diluted (a) $ 2.06 $ 2.04 $ 2.02 Weighted average shares outstanding (a) Basic 529,957 536,949 545,480 Diluted 532,178 539,652 548,729 Dividends declared per common share outstanding (a) $ 0.92 $ 0.88 $ 0.82 (a) All share and per share information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024 as discussed in Note 1.
Consolidated statements of income; fiscal 2023–2025 results and diluted share counts · Filed 19/02/2026
As a percent of net sales, gross margin in the first six months of fiscal 2026 increased seven basis points to 36.7% from 36.6% in the first six months of fiscal 2025.
First-half 2026 MD&A; reported gross-margin movement · Filed 06/08/2026
The gross margin rate benefited from disciplined product cost management and tariff-related benefits, partially offset by higher delivery-related transportation costs.
First-half 2026 MD&A; product costs, tariff benefits and transportation costs · Filed 06/08/2026
The increase in adjusted SG&A as a percent of net sales was primarily attributable to deleverage from lower comparable sales, as well as higher medical claims and legal settlement expenses.
Second-quarter 2026 MD&A; adjusted operating expense deleverage · Filed 06/08/2026
On an adjusted basis, operating income for the second quarter of fiscal 2026 decreased 5.1% to $548.3 million.
Second-quarter 2026 MD&A; adjusted operating income decline · Filed 06/08/2026
The increase in SG&A as a percent of net sales was primarily attributable to impairment and other charges of $65.8 million due to a restructuring of the Petsense business, acquisition costs of $9.5 million for the acquisition of VIP Petcare, and deleverage of fixed costs from comparable store sales performance.
First-half 2026 MD&A; Petsense restructuring, acquisition costs and fixed-cost deleverage · Filed 06/08/2026
During the first six months of fiscal 2026, we repurchased approximately 6.2 million shares of the Company’s common stock at a total cost of $253.3 million, excluding the 1% excise tax, as part of our share repurchase program and paid quarterly cash dividends totaling $252.0 million, returning $505.3 million to our stockholders.
Liquidity and capital resources; actual first-half 2026 shareholder distributions · Filed 06/08/2026
The $459.6 million decrease in net cash used in financing activities in the first six months of fiscal 2026 compared to the first six months of fiscal 2025 is due to changes in the following (in millions): Fiscal Six Months Ended June 27, 2026 June 28, 2025 Variance Net borrowings and repayments under debt facilities $ 390.0 $ (160.0) $ 550.0 Repurchase of common stock (253.6) (170.0) (83.6) Cash dividends paid to stockholders (252.0) (244.4) (7.6) Net proceeds from issuance of common stock 13.9 11.3 2.6 Other, net (18.3) (16.5) (1.8) Net cash used in financing activities $ (120.0) $ (579.6) $ 459.6 Note: Amounts may not sum to totals due to rounding.
Financing cash flows; first-half 2026 borrowings, repurchases, dividends and equity issuance · Filed 06/08/2026
As noted further below, in November 2025, the independent members of the Board, upon recommendation of the Compensation and Human Capital Committee, granted our Chief Executive Officer retention equity awards, with 60% of the grant value delivered in the form of performance share units (“PSUs”) and the remaining 40% of the grant value delivered in the form of restricted stock units (“RSUs”), with the PSUs vesting based on our relative total stockholder return (“TSR”) performance over a five-year performance period and the RSUs subject to a longer vesting schedule than the Company’s annual long-term incentives.
Compensation summary; retention equity awards granted in November 2025 · Filed 26/03/2026
Our Executive Compensation Practices We currently maintain the following executive compensation practices that we believe reflect our pay-for-performance philosophy and further align our executives’ interests with those of our stockholders: We DO Have This Practice We DO NOT Have This Practice ✓ Incentive award performance metrics that are objective and tied to our strategic priorities × Repricing of options without stockholder approval ✓ PSUs with vesting subject to the achievement of rigorous performance metrics and a relative TSR modifier × Hedging transactions or short sales by executive officers or directors ✓ Robust stock ownership guidelines and minimum holding requirements × Tax gross-ups for Named Executive Officers ✓ Compensation recoupment “claw-back” policy × Excessive perquisites ✓ Robust anti-hedging and anti-pledging policy × Excise tax gross-ups upon change in control ✓ Minimum vesting requirements in equity plan for equity awards to promote retention and long-term stockholder alignment × Payout of dividends or dividend equivalents on unearned or unvested equity ✓ A significant portion of executive compensation is allocated to equity incentives to foster alignment with our stockholder interests × Pension or defined benefit supplemental executive retirement plan (SERP) ✓ Annual “say-on-pay” advisory votes × High percentage of fixed compensation ✓ Annual executive compensation risk assessment by third party × Single trigger change in control provision for severance and acceleration of equity awards ✓ Market comparison of executive compensation against a relevant peer group × Liberal change in control definition in equity award or change in control agreements 45 Table of Contents Financial Performance We delivered strong financial results again in fiscal 2025, as evidenced by the following highlights: Stockholder Engagement and Advisory Vote on Executive Compensation At our 2025 Annual Meeting of Stockholders, 93.0% of the shares represented at the meeting voted to approve, on an advisory basis, the compensation of our Named Executive Officers as described in our 2025 proxy statement.
Executive compensation practices; ownership requirements, clawback, prohibited transactions and 2025 advisory vote · Filed 26/03/2026
Lawton was awarded 80.8% of his target payout under the CIP for fiscal 2025.
CEO compensation; actual fiscal 2025 cash incentive payout · Filed 26/03/2026
The Corporate Governance Committee has established a rigorous and thorough annual assessment process that includes the completion of written assessments and one-on-one interviews of all directors by the Chair of the Board.
Corporate governance; annual director assessment process · Filed 26/03/2026
Director Candidates The Corporate Governance Committee, which is comprised solely of independent directors, considers candidates for Board membership suggested by its members and other Board members, as well as management and stockholders.
Corporate governance; independent nominating committee · Filed 26/03/2026
In the event of Mr. Lawton’s retirement, the Retention PSU Award will vest on a prorated basis based on actual performance through the end of the performance period and the Retention RSU Award will vest to the extent that it would have vested if Mr.
Retention equity award terms; retirement-related vesting provisions · Filed 26/03/2026
The following table summarizes store growth for the fiscal six months ended June 27, 2026 and June 28, 2025: Fiscal Six Months Ended Store Count Information: June 27, 2026 June 28, 2025 Tractor Supply Beginning of period 2,395 2,296 New stores opened 68 39 Stores closed — — End of period 2,463 2,335 Petsense by Tractor Supply Beginning of period 207 206 New stores opened 3 4 Stores closed (1) (3) End of period 209 207 Consolidated, end of period 2,672 2,542 Stores relocated 4 7 21 Table of Contents The following table indicates the percentage of net sales represented by each of our major product categories for the fiscal six months ended June 27, 2026 and June 28, 2025: Percent of Net Sales Fiscal Six Months Ended Product Category: June 27, 2026 June 28, 2025 Livestock, Equine & Agriculture 31 % 31 % Seasonal & Recreation 23 23 Companion Animal 23 23 Truck, Tool & Hardware 15 15 Clothing, Gift & Décor 8 8 Total 100 % 100 % Note: Net sales by major product categories for the prior period have been reclassified to conform to the current year presentation.
First-half 2026 MD&A; actual store openings and closures · Filed 06/08/2026
