Tractor Supply to Close 75 Petsense Stores and Slow New Openings
Key Takeaways
- •Tractor Supply plans to close approximately 75 Petsense locations across the country.
- •The company had 209 Petsense by Tractor Supply stores in 23 states as of late June.
- •Management said the affected stores were not covering store-level costs, resulting in negative four-wall cash flow.
- •Tractor Supply expects the changes to leave it with a smaller but more profitable Petsense business within its broader pet ecosystem.
- •The company reduced its planned 2027 new-store openings to about 85 to 90 from an earlier target of 100.
A major rural lifestyle retailer is closing dozens of pet stores across the country as it reassesses its existing footprint and growth plans.
Tractor Supply said in its latest earnings report last week that it plans to close 75 Petsense locations nationwide. As of late June, the company said there were 209 Petsense by Tractor Supply stores in 23 states.
"Following a disciplined review of Petsense, we've decided to close approximately 75 underperforming stores. We believe these actions will improve returns, simplify the business, and allow us to direct resources towards higher growth, higher return opportunities," CEO Hal Lawton said on the earnings call.
Lawton said the closing Petsense locations were negative four-wall cash flow, meaning their sales were not enough to cover store-level costs such as rent, labor and inventory. He said reducing losses from those stores would allow the company to reinvest money into the core business.
He also said that after the closures, the company would "have a very strong, profitable Petsense business" that would fit within Tractor Supply's broader pet ecosystem, which includes Allivet and VIP Petcare.
Lawton added that the changes at Petsense do not affect the reacceleration of pet products within the core Tractor Supply business, which is separate from Petsense. That distinction matters because the company is adjusting one part of its pet strategy while keeping its main store base and related pet offerings on a separate track.
Tractor Supply CFO Kurt Barton said on the call that the "strategic repositioning of Petsense is expected to create a healthier, more profitable business that better complements our Tractor Supply stores and strengthens our ability to serve pet customers across our integrated pet ecosystem."
Lawton also said Tractor Supply plans to open dozens of new stores in 2027, but the total is now expected to be about 85 to 90 stores, compared with the company's earlier expectation of 100 new stores. The revised pace suggests the company is prioritizing capital toward existing assets and store-level performance rather than pushing expansion at the prior rate.
Funds saved from the reduced store-opening plan will be redirected toward initiatives such as remodels under Project Fusion, which is aimed at improving the performance of Tractor Supply's existing store base.