Item 1. Financial Statements

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Item 1. Financial Statements

TRACTOR SUPPLY COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(Unaudited)


	For the Fiscal Three				For the Fiscal Nine
	Months Ended				Months Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Net sales	$	3,719,044	$	3,468,245	$	11,625,726	$	11,109,700
Cost of merchandise sold	2,329,812		2,177,797		7,341,097		7,042,773
Gross profit	1,389,232		1,290,448		4,284,629		4,066,927
Selling, general and administrative expenses	922,454		852,299		2,748,723		2,590,637
Depreciation and amortization	124,069		113,550		366,248		327,107

Operating income	342,709		324,599		1,169,658		1,149,183
Interest expense, net	14,667		13,875		52,291		37,389
Income before income taxes	328,042		310,724		1,117,367		1,111,794
Income tax expense	68,774		69,254		248,687		246,960
Net income	$	259,268	$	241,470	$	868,680	$	864,834

Net income per share – basic (a)	$	0.49	$	0.45	$	1.64	$	1.61
Net income per share – diluted (a)	$	0.49	$	0.45	$	1.63	$	1.60

Weighted average shares outstanding: (a)
Basic	529,742		535,836		530,601		538,070
Diluted	532,143		538,390		532,816		540,733

Dividends declared per common share outstanding (a)	$	0.23	$	0.22	$	0.69	$	0.66

(a) All share and per share information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024.

The accompanying notes are an integral part of these Consolidated Financial Statements.


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TRACTOR SUPPLY COMPANY

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(Unaudited)


	September 27,		December 28,		September 28,
	2025		2024		2024
ASSETS
Current assets:
Cash and cash equivalents	$	184,639	$	251,491	$	186,294

Inventories	3,252,825		2,840,177		3,082,519
Prepaid expenses and other current assets	209,652		196,614		199,967
Income taxes receivable	—		21,635		14,381
Total current assets	3,647,116		3,309,917		3,483,161
Property and equipment, net	3,018,254		2,727,436		2,632,895
Operating lease right-of-use assets	3,743,029		3,415,444		3,295,678
Goodwill and other intangible assets	399,297		269,520		269,520

Other assets	68,906		83,168		86,643
Total assets	$	10,876,602	$	9,805,485	$	9,767,897
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,549,176	$	1,236,177	$	1,349,817
Accrued employee compensation	56,431		100,853		53,065
Other accrued expenses	734,405		581,971		551,847

Current portion of finance lease liabilities	4,512		3,300		3,402
Current portion of operating lease liabilities	416,922		396,892		387,578
Income taxes payable	40,856		—		—

Total current liabilities	2,802,302		2,319,193		2,345,709
Long-term debt	1,744,223		1,831,969		1,831,218
Finance lease liabilities, less current portion	28,950		27,983		28,831
Operating lease liabilities, less current portion	3,527,699		3,164,273		3,082,653
Deferred income taxes	53,288		44,320		48,800

Other long-term liabilities	146,955		147,413		141,926
Total liabilities	8,303,417		7,535,151		7,479,137
Stockholders’ equity:

Common stock (a)	7,127		7,116		7,114
Additional paid-in capital (a)	1,420,706		1,376,532		1,356,772
Treasury stock	(6,267,791)		(6,025,238)		(5,869,286)
Accumulated other comprehensive income	—		1,217		2,550
Retained earnings	7,413,143		6,910,707		6,791,610
Total stockholders’ equity	2,573,185		2,270,334		2,288,760
Total liabilities and stockholders’ equity	$	10,876,602	$	9,805,485	$	9,767,897

Preferred Stock (shares in thousands): $1.00 par value; 40 shares authorized; no shares were issued or outstanding during any period presented.

Common Stock (shares in thousands)****(a): $0.008 par value; 2,000,000 shares authorized for all periods presented. 890,843, 889,548, and 889,225 shares issued; 529,042, 532,191, and 534,605 shares outstanding at September 27, 2025, December 28, 2024, and September 28, 2024, respectively.

Treasury Stock (at cost, shares in thousands)****(a): 361,801, 357,357, and 354,621 shares at September 27, 2025, December 28, 2024, and September 28, 2024, respectively.

(a) All share information, Common stock balances, and Additional paid-in capital balances have been adjusted to reflect the five-for-one Stock Split effective December 20, 2024.

The accompanying notes are an integral part of these Consolidated Financial Statements.


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TRACTOR SUPPLY COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)


	For the Fiscal Three				For the Fiscal Nine
	Months Ended				Months Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Net income	$	259,268	$	241,470	$	868,680	$	864,834
Other comprehensive loss:
Change in fair value of interest rate swaps, net of taxes	—		(2,130)		(1,217)		(4,243)
Total other comprehensive loss	—		(2,130)		(1,217)		(4,243)
Total comprehensive income	$	259,268	$	239,340	$	867,463	$	860,591

The accompanying notes are an integral part of these Consolidated Financial Statements.


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TRACTOR SUPPLY COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)


	Common Stock				Additional Paid-in Capital		Treasury Stock		Accum. Other Comp. Income (Loss)		Retained Earnings		Total Stockholders’ Equity
Shares		Dollars
Stockholders’ equity at December 28, 2024	532,190		$	7,116	$	1,376,532	$	(6,025,238)	$	1,217	$	6,910,707	$	2,270,334
Common stock issuance under stock award plans & ESPP	777		7		7,009								7,016
Share-based compensation expense					13,226								13,226
Repurchase of shares to satisfy tax obligations					(13,960)								(13,960)
Repurchase of common stock	(1,727)						(93,827)						(93,827)
Cash dividends paid to stockholders											(122,401)		(122,401)
Change in fair value of interest rate swaps, net of taxes									(1,217)				(1,217)
Net income											179,369		179,369
Stockholders’ equity at March 29, 2025	531,240		$	7,123	$	1,382,807	$	(6,119,065)	$	—	$	6,967,675	$	2,238,540

Common stock issuance under stock award plans & ESPP	197		1		4,298								4,299
Share-based compensation expense					12,750								12,750
Repurchase of shares to satisfy tax obligations					(522)								(522)
Repurchase of common stock	(1,447)						(72,822)						(72,822)
Cash dividends paid to stockholders											(121,979)		(121,979)
Change in fair value of interest rate swaps, net of taxes									—				—
Net income											430,043		430,043
Stockholders’ equity at June 28, 2025	529,990		$	7,124	$	1,399,333	$	(6,191,887)	$	—	$	7,275,739	$	2,490,309

Common stock issuance under stock award plans & ESPP	322		3		7,273								7,276
Share-based compensation expense					15,314								15,314
Repurchase of shares to satisfy tax obligations					(1,214)								(1,214)
Repurchase of common stock	(1,270)						(75,904)						(75,904)
Cash dividends paid to stockholders											(121,864)		(121,864)
Change in fair value of interest rate swaps, net of taxes									—				—
Net income											259,268		259,268
Stockholders’ equity at September 27, 2025	529,042		$	7,127	$	1,420,706	$	(6,267,791)	$	—	$	7,413,143	$	2,573,185


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	Common Stock (a)				Additional Paid-in Capital (a)		Treasury Stock		Accum. Other Comp. Income / (Loss)		Retained Earnings		Total Stockholders’ Equity
Shares		Dollars
Stockholders’ equity at December 30, 2023	539,878		$	7,093	$	1,312,772	$	(5,458,855)	$	6,793	$	6,281,959	$	2,149,762
Common stock issuance under stock award plans & ESPP	2,060		17		21,701								21,718
Share-based compensation expense					14,448								14,448
Repurchase of shares to satisfy tax obligations					(22,001)								(22,001)
Repurchase of common stock	(2,481)						(118,543)						(118,543)
Cash dividends paid to stockholders											(118,809)		(118,809)
Change in fair value of interest rate swaps, net of taxes									(731)				(731)
Net income											198,167		198,167
Stockholders’ equity at March 30, 2024	539,457		$	7,110	$	1,326,920	$	(5,577,398)	$	6,062	$	6,361,317	$	2,124,011

Common stock issuance under stock award plans & ESPP	331		3		6,628								6,631
Share-based compensation expense					10,676								10,676
Repurchase of shares to satisfy tax obligations					(716)								(716)
Repurchase of common stock	(2,555)						(140,546)						(140,546)
Cash dividends paid to stockholders											(118,538)		(118,538)
Change in fair value of interest rate swaps, net of taxes									(1,382)				(1,382)
Net income											425,196		425,196
Stockholders’ equity at June 29, 2024	537,233		$	7,113	$	1,343,508	$	(5,717,944)	$	4,680	$	6,667,975	$	2,305,332

Common stock issuance under stock award plans & ESPP	176		1		4,166								4,167
Share-based compensation expense					9,999								9,999
Repurchase of shares to satisfy tax obligations					(901)								(901)
Repurchase of common stock	(2,804)						(151,342)						(151,342)
Cash dividends paid to stockholders											(117,835)		(117,835)
Change in fair value of interest rate swaps, net of taxes									(2,130)				(2,130)
Net income											241,470		241,470
Stockholders’ equity at September 28, 2024	534,605		$	7,114	$	1,356,772	$	(5,869,286)	$	2,550	$	6,791,610	$	2,288,760

(a) All Common Stock share and related dollar information as well as Additional Paid-in Capital has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024 as discussed in Note 1.

The accompanying notes are an integral part of these Consolidated Financial Statements.


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TRACTOR SUPPLY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	For the Fiscal Nine Months Ended
	September 27, 2025		September 28, 2024
Cash flows from operating activities:
Net income	$	868,680	$	864,834
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	366,248		327,107
(Gain)/loss on disposition of property and equipment	(66,046)		(38,751)
Share-based compensation expense	41,290		35,124
Deferred income taxes	16,756		(21,212)
Change in assets and liabilities:
Inventories	(394,426)		(436,665)
Prepaid expenses and other current assets	(8,357)		9,092
Accounts payable	301,773		170,014
Accrued employee compensation	(44,722)		(38,413)
Other accrued expenses	109,973		(227)
Income taxes	57,818		(11,920)
Other	61,438		44,627
Net cash provided by operating activities	1,310,425		903,610
Cash flows from investing activities:
Capital expenditures	(629,213)		(538,018)
Proceeds from sale of property and equipment	92,238		77,895

Acquisition of Allivet, net of cash acquired	(139,895)		—
Net cash used in investing activities	(676,870)		(460,123)
Cash flows from financing activities:
Borrowings under debt facilities	2,190,000		585,000
Repayments under debt facilities	(2,280,000)		(485,000)


Principal payments under finance lease liabilities	(3,048)		(1,317)
Repurchase of shares to satisfy tax obligations	(15,696)		(23,618)
Repurchase of common stock	(244,010)		(406,663)
Net proceeds from issuance of common stock	18,591		32,516
Cash dividends paid to stockholders	(366,244)		(355,182)
Net cash used in financing activities	(700,407)		(654,264)
Net decrease in cash and cash equivalents	(66,852)		(210,777)
Cash and cash equivalents at beginning of period	251,491		397,071
Cash and cash equivalents at end of period	$	184,639	$	186,294

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	41,009	$	36,433
Income taxes	$	55,449	$	278,273

Supplemental disclosures of non-cash activities:
Non-cash accruals for property and equipment	$	123,631	$	75,332
Increase in operating lease liabilities resulting from new or modified right-of-use assets	$	629,056	$	442,399
Increase in finance lease liabilities resulting from new or modified right-of-use assets	$	4,289	$	—

The accompanying notes are an integral part of these Consolidated Financial Statements.


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TRACTOR SUPPLY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – General

Nature of Business

Founded in 1938, Tractor Supply Company (the “Company,” “Tractor Supply,” “we,” “our,” or “us”) is the largest rural lifestyle retailer in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers, ranchers, and all those who enjoy living the rural lifestyle (which we refer to as the “Out Here” lifestyle). The Company's stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company also owns and operates Petsense, LLC (“Petsense by Tractor Supply”), a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-sized communities, and offering a variety of pet products and services. At September 27, 2025, the Company operated a total of 2,570 retail stores in 49 states (2,364 Tractor Supply retail stores and 206 Petsense by Tractor Supply retail stores) and also offered an expanded assortment of products through the Tractor Supply mobile application and online at TractorSupply.com and Petsense.com.

On December 30, 2024, the Company completed its acquisition of Allivet, an online pet pharmacy. Pursuant to the agreement governing the transaction, the Company acquired 100% of the equity interest in Allivet for a purchase price of $135.0 million. The acquisition was financed with cash-on-hand from the balance sheet.

Basis of Presentation

The accompanying interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2024. The results of operations for our interim periods are not necessarily indicative of results for the full fiscal year.

Stock Split

On December 5, 2024, the Company’s Board of Directors authorized a five-for-one forward split (the “Stock Split”) of the Company’s outstanding shares of common stock, par value $0.008 per share. On December 20, 2024, stockholders of record at the close of business on December 16, 2024, received four additional shares of common stock for each share owned by such stockholder. The Certificate of Amendment to the Company’s Restated Certificate of Incorporation filed on December 19, 2024 effected the Stock Split and also proportionately increased the number of authorized common shares from 400.0 million to 2.00 billion. The par value of each share was not changed. All share and per-share information herein has been retroactively restated to reflect the Stock Split.

New Accounting Pronouncements Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40).” The ASU is intended to improve and modernize the accounting for software costs to better align with the evolution of software development. The ASU is required to be adopted for fiscal years beginning after December 15, 2027 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted as of the beginning of an annual reporting period. The amendments should be applied on a prospective transition basis to financial statements issued for reporting periods after the effective date of the update, on a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption, or on a retrospective transition basis to any or all prior periods presented in the financial statements. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU is intended to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The ASU is required to be adopted for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied on either a prospective basis to financial statements issued for reporting periods


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after the effective date of the update, or on a retrospective basis to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adoption on its financial disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

Supplier Finance Program

The Company has an agreement with a third-party financial institution that allows certain participating suppliers the ability to finance payment obligations from the Company. The third-party financial institution has separate arrangements with the Company’s suppliers and provides them with the option to request early payment for invoices confirmed by the Company. The Company does not determine the terms or conditions of the arrangement between the third-party and its suppliers and receives no compensation from the third-party financial institution. The Company’s obligation to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangement. The Company’s outstanding payment obligations under the supplier finance program, which are included in accounts payable on the Company’s Consolidated Balance Sheets, were $69.5 million, $34.8 million, and $65.6 million at September 27, 2025, December 28, 2024, and September 28, 2024, respectively.

Note 2 – Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1 - defined as observable inputs such as quoted prices in active markets;
Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash and cash equivalents, short-term credit card receivables, trade payables, and debt instruments. Due to their short-term nature, the carrying values of cash and cash equivalents, short-term credit card receivables, and trade payables approximate current fair value at each balance sheet date.

As described in further detail in Note 6 to the Consolidated Financial Statements, the Company had $1.76 billion, $1.85 billion and $1.85 billion in borrowings under its debt facilities at September 27, 2025, December 28, 2024 and September 28, 2024, respectively. The fair value of the Company’s $150 million 3.70% Senior Notes due 2029 (the “3.70% Senior Notes”) and the borrowings under the Company’s revolving credit facility (the “Revolving Credit Facility”) were determined based on market interest rates (Level 2 inputs). The carrying value of borrowings in the 3.70% Senior Notes and the Revolving Credit Facility approximate fair value for each period reported.


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The fair value of the Company’s $650 million 1.750% Senior Notes due 2030 (the “1.75% Senior Notes”) and $750 million 5.250% Senior Notes due 2033 (the “5.25% Senior Notes”) are determined based on quoted prices in active markets, which are considered Level 1 inputs. The carrying value and the fair value of the 1.75% Senior Notes and the 5.25% Senior Notes, net of discounts, were as follows (in thousands):


	September 27, 2025				December 28, 2024				September 28, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
1.75% Senior Notes	$	643,004	$	571,305	$	641,972	$	542,191	$	641,628	$	562,315
5.25% Senior Notes	$	742,590	$	773,070	$	741,857	$	746,573	$	741,613	$	781,163

The Company's interest rate swap is carried at fair value, which is determined based on the present value of expected future cash flows using forward rate curves, which is considered a Level 2 input. In accordance with hedge accounting, the gains and losses on interest rate swaps that are designated and qualify as cash flow hedges are recorded as a component of Other Comprehensive Income, net of related income taxes, and reclassified into earnings in the same income statement line and period in which the hedged transactions affect earnings. The interest rate swap agreement matured in the first quarter of fiscal 2025. The fair value of the interest rate swap, excluding accrued interest, was as follows (in thousands):


	Fair Value Measurements at
	September 27, 2025		December 28, 2024		September 28, 2024
Interest rate swap assets (Level 2)	$	—	$	1,600	$	3,395

Note 3 – Share-Based Compensation

Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and transactions under the Company's Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is recognized based on grant date fair value of all stock options, restricted stock units, and performance-based restricted share units. Share-based compensation expense is also recognized for the value of the 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the market value on the first day of the purchase period or the market value on the purchase date, whichever is lower, and the employee’s purchase price.

There were no significant modifications to the Company’s share-based compensation plans during the fiscal nine months ended September 27, 2025.

Share-based compensation expense was $15.3 million and $10.0 million for the third quarter of fiscal 2025 and 2024, respectively, and $41.3 million and $35.1 million for the first nine months of fiscal 2025 and 2024, respectively.

Stock Options

The following table summarizes information concerning stock option grants during the first nine months of fiscal 2025:


	Fiscal Nine Months Ended
	September 27, 2025
Stock options granted	666,838
Weighted average exercise price	$	54.87
Weighted average grant date fair value per option	$	13.34

As of September 27, 2025, total unrecognized compensation expense related to non-vested stock options was approximately $10.7 million with a remaining weighted average expense recognition period of 1.9 years.


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Restricted Stock Units and Performance-Based Restricted Share Units

The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first nine months of fiscal 2025:


	Fiscal Nine Months Ended
	September 27, 2025
Restricted Stock Unit Activity
Awards granted	1,070,044
Weighted average grant date fair value per share	$	53.18
Performance-Based Restricted Share Unit Activity
Awards granted (a)	274,201
Weighted average grant date fair value per share - awards granted	$	54.81
Performance adjustment (b)	(157,117)
Weighted average grant date fair value per share - performance adjustment	$	44.75

(a) Assumes 100% target level achievement of the relative performance targets.

(b) Shares adjusted for performance-based restricted share unit awards settled during the first three months of fiscal 2025 based on actual achievement of performance targets.

In the first nine months of fiscal 2025, the Company granted performance-based restricted share unit awards that are subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share and also include a relative total shareholder return modifier. The number of performance-based restricted share units presented in the foregoing table represent the shares that can be achieved at the performance metric target value. The actual number of shares that will be issued under the performance-based restricted share unit awards, which may be higher or lower than the target, will be determined by the level of achievement of the performance goals and the relative total shareholder return modifier. If the performance targets are achieved, the units will be issued based on the achievement level, inclusive of the relative total shareholder return modifier, and the grant date fair value and will cliff vest in full on the third anniversary of the date of the grant, subject to continued employment.

As of September 27, 2025, total unrecognized compensation expense related to non-vested restricted stock units and non-vested performance-based restricted share units was approximately $86.4 million with a remaining weighted average expense recognition period of 2.0 years.

Note 4 - Acquisition of Allivet

On December 30, 2024, the Company completed its acquisition of Allivet, an online pet pharmacy. Pursuant to the agreement governing the Transaction, the Company acquired 100% of the equity interest in Allivet for a purchase price of $135.0 million, which excludes adjustments for working capital, acquired cash, and other transaction related payments. The acquisition was financed with cash-on-hand from the balance sheet.

Allocation of the Purchase Price

The Company has applied the acquisition method of accounting for the Allivet acquisition, in accordance with ASC 805 “Business Combinations,” with respect to the identifiable assets and liabilities of Allivet which have been measured at estimated fair value as of the date of the business combination.

The aggregate purchase price noted above was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date, primarily using Level 2 and Level 3 inputs. Level 2 and Level 3 inputs are described in further detail in Note 2 to the Consolidated Financial Statements. These fair value estimates represent management’s best estimate of future cash flows (including sales, cost of sales, income taxes, etc.), discount rates, competitive trends, market comparables, and other factors. Inputs used were generally determined from historical data supplemented by current and anticipated market conditions and growth rates.

The amount of consideration transferred that exceeds the fair value of the identifiable assets, net of liabilities, is recorded as goodwill, which is indicative of the expected synergies the acquisition of Allivet will bring to the Company’s portfolio offering for companion animal, equestrian, and livestock customers, and the additional growth opportunities expected to open up as a result of acquiring Allivet.


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The final fair value determination of the identifiable assets acquired and liabilities assumed was completed in the third quarter of fiscal 2025. The following table sets forth the final purchase price allocation of Allivet’s net assets acquired on December 30, 2024 (in thousands):


	Final Allocation of the Purchase Price
Fair value of assets acquired
Cash and cash equivalents	$	2,905
Inventories	18,227
Prepaid expenses and other current assets	4,681
Property and equipment	10,779
Operating lease right-of-use assets	3,124

Identifiable intangible assets	26,500
Total assets acquired	66,216
Less: liabilities assumed
Accounts payable	11,227
Other accrued expenses	3,084
Current portion of operating lease liabilities	728
Deferred income taxes	6,988
Operating lease liabilities, less current portion	1,649
Other long-term liabilities	45
Total liabilities assumed	23,721
Goodwill	100,305
Total fair value of consideration transferred	$	142,800

Transaction costs related to the Allivet acquisition were expensed as incurred and are included in the selling, general, and administrative expenses in the Consolidated Statements of Income.

The results of operations of Allivet have been included in the Consolidated Financial Statements since the date of the acquisition.


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Note 5 – Net Income Per Share

The Company presents both basic and diluted net income per share on the Consolidated Statements of Income. Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average diluted shares outstanding during the period. Dilutive shares are computed using the treasury stock method for share-based awards. Performance-based restricted share units are included in diluted shares only if the related performance conditions are considered satisfied as of the end of the reporting period. Net income per share is calculated as follows (in thousands, except per share amounts):


	Fiscal Three Months Ended
	September 27, 2025					September 28, 2024
	Income		Shares	Per Share Amount		Income		Shares(a)	Per Share Amount(a)
Basic net income per share:	$	259,268	529,742	$	0.49	$	241,470	535,836	$	0.45
Dilutive effect of share-based awards	—		2,401	—		—		2,554	—
Diluted net income per share:	$	259,268	532,143	$	0.49	$	241,470	538,390	$	0.45

	Fiscal Nine Months Ended
	September 27, 2025					September 28, 2024
	Income		Shares	Per Share Amount		Income		Shares(a)	Per Share Amount(a)
Basic net income per share:	$	868,680	530,601	$	1.64	$	864,834	538,070	$	1.61
Dilutive effect of share-based awards	—		2,215	(0.01)		—		2,663	(0.01)
Diluted net income per share:	$	868,680	532,816	$	1.63	$	864,834	540,733	$	1.60

(a) All share and per share amounts have been adjusted to reflect the five-for-one Stock Split effective December 20, 2024.

Anti-dilutive stock awards excluded from the above calculations totaled approximately 0.6 million shares for the fiscal three months ended September 27, 2025 and approximately 0.7 million shares for the fiscal three months ended September 28, 2024. Anti-dilutive stock awards excluded from the above calculations totaled approximately 0.8 million shares for the fiscal nine months ended September 27, 2025 and approximately 1.1 million shares for the fiscal nine months ended September 28, 2024.


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Note 6 – Debt

The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions):


	September 27, 2025		December 28, 2024		September 28, 2024
5.25% Senior Notes	$	750.0	$	750.0	$	750.0
1.75% Senior Notes	650.0		650.0		650.0
3.70% Senior Notes (a)	150.0		150.0		150.0
Senior credit facilities:
Revolving Credit Facility	210.0		300.0		300.0
Total outstanding borrowings	1,760.0		1,850.0		1,850.0
Less: unamortized debt discounts and issuance costs	(15.8)		(18.0)		(18.8)
Total debt	1,744.2		1,832.0		1,831.2
Less: current portion of long-term debt	—		—		—
Long-term debt	$	1,744.2	$	1,832.0	$	1,831.2

Outstanding letters of credit	$	80.8	$	74.1	$	78.8

(a) Also referred to herein as the “Note Purchase Facility,” referring to the Note Purchase and Private Shelf Agreement dated as of August 14, 2017 by and among the Company, PGIM, Inc. and the noteholders party thereto, as amended through November 2, 2022, under which the notes were purchased.

Borrowings under the Company’s Revolving Credit Facility (the “2022 Senior Credit Facility”) bore interest either at the bank’s base rate (7.250% at September 27, 2025) plus an additional amount ranging from 0.000% to 0.250% (0.000% at September 27, 2025) or at adjusted Secured Overnight Financing Rate (4.163% at September 27, 2025) plus an additional amount ranging from 0.750% to 1.250% (1.000% at September 27, 2025), adjusted based on the Company’s public credit ratings. The Company was also required to pay, quarterly in arrears, a commitment fee related to unused capacity on the Revolving Credit Facility ranging from 0.080% to 0.150% per annum (0.100% at September 27, 2025), adjusted based on the Company’s public credit ratings.

The Company previously entered into an interest rate swap agreement in order to hedge its exposure to variable rate interest payments associated with its debt. The interest rate swap agreement matured in the first quarter of fiscal 2025.

Covenants and Default Provisions of the Debt Agreements

As of September 27, 2025, the 2022 Senior Credit Facility and the Note Purchase Facility (collectively, the “Debt Agreements”) required quarterly compliance with respect to two material covenants: a fixed charge coverage ratio and a leverage ratio. Both ratios are calculated on a trailing twelve-month basis at the end of each fiscal quarter. The fixed charge coverage ratio compares earnings before interest, taxes, depreciation, amortization, share-based compensation, and rent expense (“consolidated EBITDAR”) to the sum of interest paid and rental expense (excluding any straight-line rent adjustments). The fixed charge coverage ratio was required to be greater than or equal to 2.00 to 1.00 as of the last day of each fiscal quarter. The leverage ratio compares total funded debt to consolidated EBITDAR. The leverage ratio was required to be less than or equal to 4.00 to 1.00 as of the last day of each fiscal quarter. The Debt Agreements also contain certain other restrictions regarding additional subsidiary indebtedness, business operations, subsidiary guarantees, mergers, consolidations and sales of assets, transactions with subsidiaries or affiliates, and liens. As of September 27, 2025, the Company was in compliance with all debt covenants.

The Debt Agreements contain customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain ERISA events, and invalidity of loan documents. Upon certain changes of control, amounts outstanding under the Debt Agreements could become due and payable. In addition, under the Note Purchase Facility, upon an event of default or change of control, a whole payment may become due and payable.

The Note Purchase Facility also requires that, in the event the Company amends its 2022 Senior Credit Facility, or any subsequent credit facility of $100 million or greater, such that it contains covenant or default provisions that are not provided in the Note Purchase Facility or that are similar to those contained in the Note Purchase Facility but which contain percentages,


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amounts, formulas, or grace periods that are more restrictive than those set forth in the Note Purchase Facility or are otherwise more beneficial to the lenders thereunder, the Note Purchase Facility shall be automatically amended to include such additional or amended covenants and/or default provisions.

Note 7 – Capital Stock and Dividends

Capital Stock

The authorized capital stock of the Company consists of common stock and preferred stock. The Company is authorized to issue 2.00 billion shares of common stock. The Company is also authorized to issue 40 thousand shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Company's Board of Directors.

Dividends

During the first nine months of fiscal 2025 and fiscal 2024, the Company's Board of Directors declared the following cash dividends:


Date Declared	Dividend Amount Per Share of Common Stock(a)		Record Date	Date Paid

August 6, 2025	$	0.23	August 25, 2025	September 9, 2025
May 14, 2025	$	0.23	May 28, 2025	June 10, 2025
February 12, 2025	$	0.23	February 26, 2025	March 11, 2025


August 7, 2024	$	0.22	August 26, 2024	September 10, 2024
May 8, 2024	$	0.22	May 28, 2024	June 11, 2024
February 5, 2024	$	0.22	February 26, 2024	March 12, 2024

(a) All share and per share information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024.

On November 5, 2025 the Company’s Board of Directors declared a quarterly cash dividend of $0.23 per share of the Company’s outstanding common stock. The dividend will be paid on December 9, 2025 to stockholders of record as of the close of business on November 24, 2025.

Note 8 – Treasury Stock

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program which was announced in February 2007. The aggregate total authorized amount of the program, which was increased by $1.00 billion on February 12, 2025, is currently $7.50 billion, exclusive of any fees, commissions, or other expenses related to such repurchases. The share repurchase program does not have an expiration date. The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability, and other market conditions. Repurchased shares are accounted for at cost and will be held in treasury for future issuance. The program may be limited, temporarily paused, or terminated at any time without prior notice. As of September 27, 2025, the Company had remaining authorization under the share repurchase program of $1.24 billion, exclusive of any fees, commissions, or other expenses.


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The following table provides the number of shares repurchased, average price paid per share, and total cost of share repurchases during the fiscal three months and fiscal nine months ended September 27, 2025 and September 28, 2024, respectively (in thousands, except per share amounts):


	Fiscal Three Months Ended				Fiscal Nine Months Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Total number of shares repurchased (a)	1,270		2,804		4,444		7,839
Average price paid per share (a)	$	59.32	$	53.43	$	54.73	$	51.84
Total cost of share repurchases (b)	$	75,904	$	151,342	$	242,553	$	410,431

(a) All share and per share information has been adjusted to reflect the five-for-one Stock Split effective December 20, 2024.

(b) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock. The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases.

Note 9 – Income Taxes

The Company’s effective income tax rate was 21.0% in the third quarter of fiscal 2025 compared to 22.3% in the third quarter of fiscal 2024. The decrease was driven primarily by the benefit associated with the purchase of a transferable federal tax credit. The Company’s effective income tax rate was 22.3% in the first nine months of fiscal 2025 compared to 22.2% in the first nine months of fiscal 2024. The increase was driven primarily by a reduction in the benefit from annual stock compensation activity, partially offset by the benefit associated with the purchase of a transferable federal tax credit.

On July 4, 2025, the U.S. enacted H.R.1 - One Big Beautiful Bill Act (the “OBBBA”). The OBBBA contains numerous amendments to federal income tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in later years. We are evaluating the future impact of these changes on our consolidated financial statements and do not anticipate a material impact to the Company’s effective tax rate. There was no material impact to the Company’s effective tax rate for the third quarter of fiscal 2025.

Note 10 – Commitments and Contingencies

Letters of Credit

At September 27, 2025, the Company had $80.8 million in outstanding letters of credit and contractual commitments of approximately $118.6 million related to the construction of our newest distribution center in Nampa, Idaho.

Litigation

The Company is involved in various litigation matters arising in the ordinary course of business. The Company believes that, based upon information currently available, any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations, or cash flows. However, litigation and other legal matters involve an element of uncertainty. Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company's business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company's Consolidated Financial Statements.


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Note 11 – Segment Reporting

The Company has one reportable segment which is the retail sale of products that support the rural lifestyle. The following table indicates the percentage of net sales represented by each of our major product categories during the fiscal three and nine months ended September 27, 2025 and September 28, 2024:


	Fiscal Three Months Ended				Fiscal Nine Months Ended
Product Category	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Livestock, Equine & Agriculture (a)	29	%	28	%	29	%	28	%
Companion Animal (b)	25	%	25	%	24	%	24	%
Seasonal & Recreation (c)	22	%	22	%	24	%	24	%
Truck, Tool & Hardware (d)	16	%	17	%	15	%	16	%
Clothing, Gift & Décor (e)	8	%	8	%	8	%	8	%
Total	100	%	100	%	100	%	100	%

(a) Includes livestock and equine feed & equipment, poultry, fencing, and sprayer & chemicals.

(b) Includes food, treats and equipment for dogs, cats, and other small animals as well as dog wellness.

(c) Includes tractor & rider, lawn & garden, bird feeding, power equipment, and other recreational products.

(d) Includes truck accessories, trailers, generators, lubricants, batteries, and hardware and tools.

(e) Includes clothing, footwear, toys, snacks, and decorative merchandise.

The measure of segment assets is reported on the Company’s Consolidated Balance Sheets as total consolidated assets.

Within the reportable segment, there are significant expense categories regularly provided to the Chief Operating Decision Maker and included in the measure of the segment’s net income as shown below:


	Fiscal Three Months Ended				Fiscal Nine Months Ended

	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Net Sales	$	3,719,044	$	3,468,245	$	11,625,726	$	11,109,700
Less:
Cost of merchandise sold	2,329,812		2,177,797		7,341,097		7,042,773
Personnel expense (a)	524,035		485,950		1,538,637		1,447,773
Depreciation and amortization	124,069		113,550		366,248		327,107
Other segment expenses (b)	398,419		366,349		1,210,086		1,142,864
Interest expense, net	14,667		13,875		52,291		37,389
Income tax expense	68,774		69,254		248,687		246,960
Segment net income	$	259,268	$	241,470	$	868,680	$	864,834

Reconciliation of segment profit:
Adjustments and reconciling items	—		—		—		—
Consolidated net income	$	259,268	$	241,470	$	868,680	$	864,834

(a) Personnel expenses include wages, salaries, and other forms of personnel compensation.

(b) Other segment expenses include occupancy expenses, advertising expenses, and other operating expenses within Selling, General, and Administrative expenses as described in Note 1 of the Company’s 2024 Form 10-K.


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