Tractor Supply Co. (Tractor Supply (TSCO)) shares climbed in premarket trading Thursday even after the rural lifestyle retailer reported second-quarter results that missed Wall Street estimates and trimmed its full-year outlook. Investors seemed to shrug off the modest earnings miss, focusing instead on the company's message that long-term demand is still solid.

The company reported adjusted earnings of 81 cents per share, just below the analyst consensus of 82 cents. Revenue rose 2.3% year over year to $4.541 billion, but that also fell short of the $4.580 billion analysts were expecting.

Second-Quarter Sales Miss Expectations

Comparable store sales dropped 1.5% in the quarter, reversing a 1.5% gain a year earlier. Tractor Supply said that while April and June saw positive comparable sales, an unusually weak May—especially in seasonal and discretionary categories—dragged down the overall quarter. Consumable categories held up well, and companion animal sales continued to lag even though trends improved through the quarter.

Margins, Expenses, and Profitability

Gross profit rose 2.6% to $1.68 billion, and gross margin expanded to 37.1% from 36.9% a year earlier. The quarter included a $5.9 million inventory write-down tied to the planned closure of about 75 Petsense stores. Selling, general, and administrative expenses jumped 14.4% to $1.22 billion, reflecting $65.8 million in Petsense impairment and restructuring charges and $9.5 million in acquisition costs related to VIP Petcare.

Net income fell 16.1% to $360.7 million, and GAAP diluted earnings per share declined to 69 cents from 81 cents a year earlier. Adjusted net income totaled $423.5 million, or 81 cents per diluted share. Cash and cash equivalents stood at $231.6 million at quarter-end, up from $225.8 million a year earlier.

Store Expansion and Capital Returns

During the quarter, Tractor Supply opened 28 new Tractor Supply stores and three Petsense by Tractor Supply locations. It also returned $260.9 million to shareholders through dividends and share repurchases.

CEO Highlights Customer Demand Trends

President and CEO Hal Lawton said adverse conditions in May weighed on quarterly performance but maintained that the company's core customer remains engaged and that long-term demand drivers are intact. He said Tractor Supply is strengthening its companion animal business, reinforcing its value proposition, and improving productivity to support future growth.

2026 Outlook Cut

For fiscal 2026, Tractor Supply now expects adjusted earnings of $1.90 to $2.00 per share, below the analyst consensus of $2.05. The company also reduced its GAAP earnings outlook to $1.78 to $1.88 per share from $2.13 to $2.23 and cut expected net sales to a range of $15.912 billion to $16.067 billion, down from its previous forecast of $16.145 billion to $16.455 billion.

TSCO Price Action: Tractor Supply shares were up 4.56% at $30.70 during premarket trading on Thursday.