Tractor Supply misses quarterly sales estimates due to weak demand

Sales estimates missed: Farming supplies retailer Tractor Supply missed analyst estimates for second-quarter sales on Thursday, hit by tepid demand for its products including truck tools and fertilisers.

Demand for the company's higher-margin discretionary items, such as lawn mowers, generators and consumables such as livestock, fell as value-seeking consumers prioritised spending on daily essentials amid inflationary pressures.

Shares of the company were down about 3 per cent in premarket trading.

Earlier in July, analysts from Telsey Advisory Group had raised concerns about pressure on net sales from softness in the company's agricultural customer base and a drop in farmer incomes.

For the second quarter ended June 29, Tractor Supply posted net sales of $4.25 billion, compared with analysts' estimates of $4.28 billion, according to LSEG data. It earned a profit of $3.93 per share, in line with estimates.

For the full year, it forecast net sales between $14.8 billion and $15.0 billion, compared with its prior view of $14.7 billion to $15.1 billion.

However, easing transportation costs and efficient product cost management were able to partly combat the losses in demand and lift the company's margins.

The company's quarterly gross margins expanded by 43 basis points to 36.6 per cent.

Tractor Supply now expects annual profit per share between $10.00 and $10.40, compared with its prior forecast of $9.85 to $10.50 per share.