Executive Summary

Q4 delivered modest top-line growth and positive traffic: net sales +3.1% to $3.77B, comps +0.6% with +2.3% comp transactions offset by -1.7% ticket; gross margin declined 9 bps as TSCO lapped a 129 bps expansion in Q4’23 and weather/deflation mixed the quarter . EPS was $0.44 (split-adjusted), down 3.3% YoY; operating margin 8.4% vs 9.1% LY .
2025 outlook: net sales +5% to +7%, comps +1% to +3%, operating margin 9.6%-10.0%, EPS $2.10–$2.22; guidance includes 15–20 bps of strategic investments (direct sales, Final Mile) and benefits from Allivet and sale-leasebacks .
Macro/deflation headwinds are expected to moderate through 2025; deflation was a ~100 bps drag on Q4 comps, with deflation expected to be relatively neutral by mid-2025; big-ticket categories and seasonal performed well; pet category stabilization expected in 2025 .
Capital returns remain robust: ~$272M returned in Q4 (buybacks + dividends), 15th consecutive year of dividend growth in 2024; subsequent to quarter, dividend raised to $0.23 (split-adjusted) and repurchase authorization increased by $1B .

What Went Well and What Went Wrong

What Went Well

Traffic strength and broad-based demand: comp transactions +2.3% with widespread breadth; seasonal and truck/tool/hardware outperformed chain average; big-ticket outperformed in low single digits with strong categories like generators, mowers, trailers, and grills .
Strategic progress and cash generation: Project Fusion rollout (~50% of stores), record digital sales >$1.1B, and record ~$1.4B operating cash flow in 2024; 80 new TS stores and a new DC opened (Maumelle, AR) .
Clear 2025 growth roadmap: guidance calls for gross margin expansion (20–40 bps) driven by supply chain efficiencies, cost/price management, exclusive brands, and retail media; Allivet expected to add >$100M sales and be accretive .

What Went Wrong

Margin deleverage and SG&A pressure: Q4 gross margin -9 bps YoY (lapping +129 bps last year); SG&A, including D&A, delevered 60 bps on planned growth investments and modest fixed cost deleverage on low comps, pressuring operating margin to 8.4% from 9.1% LY .
Deflation headwind and weather mix: deflation was an ~100 bps drag on Q4 comps, with warm Nov/Dec weighing on winter seasonal (insulated outerwear, heating) despite hurricane-related and holiday strength .
EPS down YoY: diluted EPS $0.44 vs $0.46 LY on higher D&A, onboarding of a new DC, and macro factors; net income -4.6% YoY .

Financial Results

Quarterly progression (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Net Sales ($B)	$4.25	$3.47	$3.77
Gross Margin %	36.63%	37.21%	35.24%
Operating Margin %	13.22%	9.36%	8.44%
Comparable Store Sales %	(0.5%)	(0.2%)	+0.6%

Notes: Q4 gross margin decline reflects a tough compare (+129 bps in Q4’23) .

Q4 vs Prior Year and vs Estimates

Metric	Q4 2023	Q4 2024	YoY Change	Versus Estimates (S&P Global)
Net Sales ($B)	$3.66	$3.77	+3.1%	Consensus unavailable (SPGI limit)
Diluted EPS ($)	$0.46	$0.44	-3.3%	Consensus unavailable (SPGI limit)
Gross Margin %	35.33%	35.24%	-9 bps	Consensus unavailable (SPGI limit)
Operating Margin %	9.13%	8.44%	-69 bps	Consensus unavailable (SPGI limit)

S&P Global consensus estimates were not retrievable at this time due to provider request limits; therefore, “vs estimates” comparisons are unavailable.

KPIs and Operating Data (oldest → newest)

KPI	Q2 2024	Q3 2024	Q4 2024
Comp Avg Transaction Count %	(0.6%)	+0.3%	+2.3%
Comp Avg Ticket %	+0.1%	(0.5%)	(1.7%)
Avg Transaction Value ($)	$63.46	$58.87	$59.39
New Store Sales % of Total	2.0%	2.0%	2.0%
Stores Opened (TS / Petsense)	21 / 3	16 / 0	26 / 4
End-of-Period Store Count (TS / Petsense)	2,254 / 205	2,270 / 205	2,296 / 206

Segment breakdown: Not applicable (company reports consolidated results).

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales Growth	FY 2025	—	+5% to +7%	Initiated
Comparable Store Sales	FY 2025	—	+1% to +3%	Initiated
Operating Margin Rate	FY 2025	—	9.6% to 10.0%	Initiated
Net Income	FY 2025	—	$1.12B to $1.18B	Initiated
EPS (Diluted)	FY 2025	—	$2.10 to $2.22	Initiated
Capex (net of sale-leaseback)	FY 2025	—	$650M to $725M	Initiated
Share Repurchases	FY 2025	—	$525M to $600M	Initiated
Effective Tax Rate	FY 2025	—	22.2% to 22.5%	Initiated
Interest Expense	FY 2025	—	~$65M–$70M	Initiated
Store Openings (TS / Petsense)	FY 2025	—	~90 TS / ~10 Petsense	Initiated
Dividend (quarterly)	Post-Q4	$0.22 (Q4’24)	$0.23; authorization +$1B buybacks	Raised / Increased

Management notes the 2025 operating margin guide embeds 15–20 bps of strategic investments (Life Out Here 2030, direct sales, Final Mile) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Supply chain & transportation	GM tailwind from lower transportation costs; GM +43 bps (Q2) and +56 bps (Q3) YoY	Expect modest GM expansion (20–40 bps in 2025) from supply chain efficiencies, cost/price, exclusive brands, retail media	Still favorable but moderating as efficiencies are lapped
Deflation/macro	CU&E unit growth offset by price pressure in Q2/Q3	Deflation ~100 bps comp drag in Q4; expected to be relatively neutral by mid-2025; PCE/goods-vs-services normalizing	Headwind easing through 2025
Big-ticket performance	Strength in seasonal big-ticket in Q2/Q3	Low-single-digit growth; expected to run in line with chain average in 2025 on newness/pricing/financing	Stabilizing at healthier baseline
Pet category	CU&E modestly negative in Q2/Q3 with unit growth	Expect low single-digit category growth in 2025; Allivet Rx integration to drive pet Rx	Stabilizing to low growth
Strategic initiatives	Fusion rollouts, garden centers, DC expansion in Q2/Q3	Life Out Here 2030: launch direct sales and Final Mile; localized floor space (~25%); 11th DC in Idaho construction 2025	Investment ramp for long-term growth
Tariffs	—	Guidance assumes no tariff changes; ~12% of sales direct imports; scenario planning in place	Watch item; manageable exposure
Retail media & exclusive brands	Noted as drivers of GM	Cited as 2025 GM contributors	Incremental GM levers

Management Commentary

“We expect product deflation should be relatively neutral by mid-2025... we see signs of stabilization in both personal consumption expenditure... and in the pet food category.” — CEO Hal Lawton .
“We estimate that deflation had approximately 100 basis point drag on our comp sales performance in the quarter.” — CFO Kurt Barton .
“For fiscal 2025, we are forecasting net sales growth of 5% to 7%... Comparable store sales are anticipated to increase 1% to 3%... We expect modest gross margin expansion of about 20 to 40 basis points...” — CFO Kurt Barton .
“With a purchase price of $135 million, we anticipate Allivet adding more than $100 million to our net sales and accretive to earnings.” — CFO Kurt Barton .
“Our digital business reached another year of record sales, topping over $1.1 billion... and we generated a record $1.4 billion in operating cash flow.” — CEO Hal Lawton .

Q&A Highlights

Comp transactions breadth: growth was widespread across categories/regions; strong weather-driven activity; new stores performing to expectations with solid IRRs .
Localization and Field & Stream: localized macro floor planning (~25% of space) expected to add low-single-digit lift; Field & Stream partnership taps fast-growing wildlife/hunting categories and will expand into apparel and cross-brand marketing .
Backyard poultry tailwinds: rising egg prices can catalyze customer acquisition and category engagement during Chick Days .
Macro path and big-ticket: management sees macro headwinds neutralizing; big-ticket to run more in line with chain average in 2025 after 2024 rebound on newness/pricing/financing .
Allivet P&L: relatively stable business with solid operating margin; accretive near-term, with potential to match/exceed TSCO op margin longer term as Rx scales; 2025 focus is onboarding Neighbor’s Club .
Gross margin cadence: Q4 GM in line with plan; 2025 GM modestly higher H1 than H2 as transportation efficiencies are lapped, with retail media/exclusive brands contributing later in the year .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus for Q4’24 EPS and revenue was unavailable due to provider request limits at the time of retrieval. As a result, “vs estimates” comparisons are not shown. Management did not provide quarterly guidance; full-year 2025 outlook was provided .

Key Takeaways for Investors

Traffic is healthy and broad-based; improving macro (deflation easing, pet stabilization) and easy compares set up comps to strengthen modestly in H2’25 within +1% to +3% full-year guide .
Gross margin expansion levers (supply chain, cost/price, exclusive brands, retail media) should offset SG&A deleverage from higher D&A and strategic investments; operating margin guided to 9.6%–10.0% .
Allivet broadens TAM by ~$15B (pet Rx) and is accretive near-term; integration with Neighbor’s Club is a 2025 focus and longer-term margin opportunity .
Capital allocation remains a support: ongoing buybacks ($525–$600M guide) and a dividend increase post-quarter, underpinned by strong cash generation .
Watch items: tariff policy (manageable ~12% direct import exposure), margin cadence as transportation tailwinds fade midyear, and weather variability impacting seasonal categories .
Near-term trading setup: upside if traffic strength persists and deflation neutralizes faster than expected; retail media/exclusive brand contribution and big-ticket “comp-the-comp” could be incremental positives .
Medium-term thesis: Life Out Here 2030 (localization, direct sales, Final Mile, DC expansion) plus market share gains and loyalty (38M+ members) support sustained top-line growth and margin resilience through cycles .

Citations:

Q4 2024 results and financial tables: press release and 8-K .
Q3 2024 results: press release and 8-K .
Q2 2024 results: press release and 8-K .
2025 guidance and strategic investments: press release and earnings call .
Management commentary and Q&A: earnings call transcript .
Dividend increase and buyback authorization increase: press release/8-K (Feb 13, 2025) .

TRACTOR SUPPLY CO /DE/ (TSCO)·Q4 2024 Earnings Summary