Tractor Supply Faces Margin Squeeze as TD Cowen Cuts Target to $53
TD Cowen cut its price target on Tractor Supply to $53 from $55, citing softer Q4 comparable-store sales of 0.3% versus 2.3% consensus and gross margin decline to 35.1% from 35.2%. The company’s outlook calls for fiscal 2026 net sales growth of 4–6% and EPS of $2.13–2.23, below analyst forecasts.
1. Analyst Price Target Reduction
On January 30, TD Cowen lowered its price target on Tractor Supply to $53 from $55 and maintained a Hold rating, highlighting margin compression and weaker comparable-store sales as primary concerns.
2. Q4 Performance Details
For the quarter ended December 27, Tractor Supply reported net sales of $3.90 billion, up 3% year over year but below the $4.0 billion consensus, with comparable-store sales rising just 0.3% and net income falling 3.8% to $297.7 million.
3. Margin and Tariff Pressures
Gross margin slipped to 35.1% from 35.2% year over year as higher import tariffs increased costs, prompting Tractor Supply to raise some prices while introducing promotions to support cost-conscious customers.
4. Conservative Fiscal 2026 Outlook
The company projects fiscal 2026 net sales growth of 4–6%, short of the 6.3% street estimate, and anticipates EPS of $2.13–2.23, below the $2.31 consensus estimate, reflecting ongoing economic uncertainty and restrained discretionary spending.