TSCO · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

TRACTOR SUPPLY CO /DE/ · 2026-08-06 · Importance 49 · Surprise 32 · Contradicted

Second-quarter fiscal 2026 gross profit increased 2.6% to $1.68 billion, and gross margin expanded 11 basis points to 37.1% from 36.9%.,First-half gross profit increased 3.1% to $2.98 billion, while gross margin increased seven basis points to 36.7% from 36.6%.,Adjusted second-quarter gross margin increased 24 basis points to 37.2%, supported by disciplined product cost management and tariff-related benefits.,Higher freight and delivery-related transportation costs and incremental investments to strengthen price-value positioning partially offset the margin improvement.,Second-quarter gross profit included a $5.9 million inventory impairment charge related to closing approximately 75 Petsense stores.

Key facts

• Adjusted gross profit for the second quarter of fiscal 2026: $1.69 billion, increased 3.0% and adjusted gross margin increased 24 basis points to 37.2%. source
• Gross profit for the second quarter of fiscal 2026: $1.68 billion, increased 2.6% from $1.64 billion in the second quarter of fiscal 2025. source
• Gross profit for first six months of fiscal 2026: $2.98 billion, increased 3.1% from $2.90 billion in first six months of fiscal 2025; gross margin increased seven basis points to 36.7% from 36.6%. source
• Adjusted gross profit for first six months of fiscal 2026: $2.99 billion, adjusted gross margin increased 14 basis points to 36.8%. source
• Adjusted gross margin increase was primarily attributable to disciplined product cost management and tariff-related benefits, partially offset by higher freight expense and incremental investments in price-value position. source
• Gross margin for the second quarter of fiscal 2026: 37.1% of net sales, an increase of 11 basis points from 36.9% in the second quarter of fiscal 2025. source

Impact estimates