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Performance was driven by a resilient needs-based model, with consistent demand in core categories like poultry and livestock feed offsetting a cautious consumer environment.
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Management attributed the 100 basis point drag on comparable sales to structural headwinds in the companion animal category, specifically declining dog ownership and an under-index in the growing cat and fresh nutrition segments.
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Market share gains in the farm and ranch sector reached one of their best levels in the first quarter, even as the broader market slowed.
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Consumer behavior reflected trip consolidation and a shift toward essential spending, with tax refunds being used for debt reduction and savings rather than discretionary purchases.
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Digital business growth of over 20% was fueled by enhancements to the subscription model and the expansion of the Final Mile delivery network.
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New store productivity remained high at 65% to 70%, with a record 40 stores opened in the quarter to drive total net sales growth of 3.6%.
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Management expects sequential improvement in comparable sales for the second quarter as seasonal demand ramps up in Northern regions and big-ticket categories like riding mowers gain momentum.
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The companion animal category is expected to remain under pressure for the remainder of the year, with guidance assuming flat to slightly negative comps in that segment.
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Gross margin is projected to strengthen in the second half of the year as comparisons ease and efficiencies from the new 11th distribution center begin to flow through.
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Strategic investments in the pet category include scaling fresh and frozen offerings from 80 stores to 700 stores by year-end to capture higher-growth nutrition segments.
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The company plans to convert approximately 700 stores to include dedicated wildlife and recreation departments by year-end, up from the previous target of 500.
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Gross margin remains pressured by tariff costs, freight inflation, and a higher mix of digital and delivery-related sales, though management believes these impacts are currently being mitigated through cost management and supply chain efficiencies.
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SG&A deleverage of 70 basis points was driven by fixed cost pressure from low comparable sales and the front-loaded timing of new store openings and strategic investments.
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The dog population in the U.S. has declined from 96 million in 2023 to approximately 92 million in 2025, creating a persistent headwind for the company’s dog-heavy mix.
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Fuel and oil price volatility is being managed with a conservative outlook, with higher costs already incorporated into the reaffirmed full-year guidance.
