Tractor Supply is closing 75 underperforming Petsense stores following a strategic business review, the rural lifestyle retailer announced in its second-quarter earnings report on July 23. The closures will reduce Petsense’s footprint from 209 locations to approximately 125 stores across 23 states, eliminating roughly 36 percent of the pet specialty chain’s fleet.
The decision came as Tractor Supply reported challenging second-quarter results, including a 1.5 percent decline in comparable store sales. CEO Hal Lawton attributed the weakness to unusual headwinds in May, when fuel prices peaked during the spring selling season and drought conditions across southeastern markets depressed demand for lawn care and outdoor purchases. Tractor Supply, which operates 2,463 namesake stores, recorded a $65.8 million impairment charge in the quarter related to the Petsense closures and restructuring costs.
The underperforming Petsense locations were generating negative four-wall cash flow, meaning they were losing money on their own operations. According to Lawton, redirecting that cash will allow Tractor Supply to reinvest capital into higher-priority initiatives. The company is scaling back expansion plans overall, reducing its 2027 new store openings to 85 to 90 from a previous target of 100, and will redirect capital toward store remodels, technology upgrades, and Final Mile delivery expansion.
Tractor Supply acquired Petsense in September 2016 for approximately $116 million when the pet specialty chain operated 136 stores. Over the past decade, the company expanded the footprint but has struggled to achieve profitability across the entire network. The Petsense closures are part of a broader shift in Tractor Supply’s pet strategy, which now emphasizes integration with recently acquired businesses like VIP Petcare, a mobile veterinary services provider acquired in May 2026, and Allivet, an online pet pharmacy.
The closures reflect broader challenges in retail, where chains like Dollar Tree have also announced significant store closures in 2026. Industry analysts estimate that U.S. retailers will close approximately 7,900 stores this year as chains consolidate underperforming locations and shift resources to digital channels and profitable markets. Tractor Supply’s decision to exit weak Petsense markets aligns with this trend of pruning retail footprints to focus on stronger-performing stores.
Despite the Petsense challenges, Tractor Supply highlighted a bright spot in its pet business: Freshpet, a refrigerated fresh pet food product line, was expanding to at least 700 stores by year-end from approximately 250 stores at the end of Q2. The company reported that over 40 percent of Freshpet buyers were either new to Tractor Supply’s pet food category or reactivated customers, suggesting potential for growth in the core Tractor Supply banner’s pet offerings.
Tractor Supply also trimmed its full-year 2026 outlook, now expecting net sales growth of 2.5 to 3.5 percent and comparable store sales to range from down 1 percent to flat, down from prior guidance of up 4 to 6 percent. The company withdrew its long-term financial framework introduced in December 2024, citing the need to respond to current market conditions with “urgency” while making “disciplined choices” about capital allocation.
Sources
- Retail TouchPoints — Q2 earnings details, impairment charge, CEO commentary on Petsense closures and May headwinds
- Chain Store Age — Tractor Supply Q2 results, store count, expansion plan adjustments, and Lawton’s earnings call statements
- SGB Online — Impairment charge and restructuring costs related to Petsense closures
- Pet Food Industry — Petsense store count, remaining locations, and closure scope
- Tractor Supply Corporate Newsroom — 2016 Petsense acquisition details and transaction price
