Tractor Supply's Earnings Report Next Week Could Disappoint. But Are Shares a Buy Anyway?

Tractor Supply (NASDAQ: TSCO) reports its fourth-quarter results before market open on Jan. 29, and the headline numbers could land on the softer side of expectations. But even if this does happen, it's probably not worth fretting over. The weather may be the culprit.

Tractor Supply's fourth quarter is highly dependent on weather -- and weather trends weren't very favorable for the company during the period. But the retailer has some positives that should make it easy to overlook a weather-related setback beyond the company's control: Management seems upbeat about 2026's potential.

Here's why the bull case will likely remain intact for the rural retailer even if Q4 fails to impress.

Image source: Getty Images.

A fourth-quarter headwind

When Tractor Supply reported third-quarter results in October, it posted $3.7 billion in net sales, up 7.2% year over year, and comparable store sales rose 3.9%. This was a nice acceleration from 4.5% sales growth in Q2 and 2.1% sales growth in Q1.

But management also provided guidance on a wide range of outcomes for Q4 regarding comparable store sales growth. Specifically, management said fourth-quarter comparable store sales could grow at a rate anywhere between 1% and 5%.

Why such a broad range?

"It is all about the cold weather and winter that starts to happen in December," said Tractor Supply CEO Hal Lawton during the company's third-quarter earnings call when discussing the biggest drivers for how Q4 comparable store sales can play out. Typically, the more severe the winter storms are, the better Tractor Supply's business fares during the period.

So, it is not hard to see why investors might be cautious about where the company landed within that range. NOAA's national climate summaries showed the contiguous U.S. ran unusually warm in October and November, with November ranking as the fourth-warmest on record. And the last month of the year ranked as the fifth-warmest December over the last 131 years.

Of course, a mild weather quarter does not guarantee weak fourth-quarter results, but it does raise the odds that demand for cold-weather items was not as strong a tailwind as management had hoped.

Tractor Supply's business could inflect in 2026

But there's still a lot for Tractor Supply investors to be excited about. The most encouraging part of the company's third-quarter update was not its strong third-quarter growth but what management said about the demand environment for 2026.

Looking to 2026, management said it expected its comparable store sales growth to remain above the weaker levels the key metric saw in the first half of 2025, with transaction count growth being a key driver and average ticket growth trends remaining positive. In addition, management said that 2025 marked the peak of its capital investment cycle, so cash flow should improve in 2026.

Adding to the reasons to be upbeat about this year, Tractor Supply chief financial officer Kurt Barton noted that the company expects to open about 100 new Tractor Supply stores in 2026 -- up from roughly 90 in 2025.

When Tractor Supply reports its fourth-quarter results, investors should look to see if the company remains as optimistic about 2026 as it was in its third-quarter update. In particular, it would be nice to see management guide for an acceleration in comparable store sales in 2026 compared to 2025.

Of course, investors shouldn't ignore Tractor Supply's fourth-quarter results entirely. A comparable store sales growth rate below its 1% to 5% range, for instance, may be a red flag.

With all of this said, it's very possible that Tractor Supply's fourth-quarter results come in soft. But this doesn't mean investors should sell the stock going into the report. Instead, if results are weak, investors should look for any reasons the company provides for the performance. If weather is the main drag, this isn't necessarily an indication that the business is doing poorly. Further, investors should consider management's commentary on expectations for 2026. If the company indicates it could see an acceleration in important key metrics like revenue growth, comparable store sales, or transaction growth, then the bull case is arguably just getting stronger.

There's no way to know exactly how the stock will react when Tractor Supply reports its fourth-quarter results. But I do believe shares remain attractive, given Tractor Supply's resilient business and its recent reacceleration and sales growth. While the stock's valuation isn't cheap, with shares currently trading at a price-to-earnings ratio of 26, it's not expensive either. And for a high-quality retailer like Tractor Supply, paying a fair valuation arguably makes sense.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tractor Supply. The Motley Fool recommends the following options: short January 2026 $58 calls on Tractor Supply. The Motley Fool has a disclosure policy.