TSOH Weekly Roundup (07/31/2026)
Welcome to another edition of TSOH Weekly Roundup.
Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.
Chart Of The Week (from “Ally Financial: The Next Vintage”)
Three Notable Items
“Tractor Supply Q2 2026 Financial Results”
Tractor Supply’s latest results came with across the board cuts to FY26 guidance - on SSS, revenues, EBIT margins, and EPS - along with the decision to withdraw their long-term financial framework (slide 120). As I discussed in “Old Dog, New Tricks?”, this is shaping up to be the fourth consecutive year of underwhelming results, with the stock down ~50% from the highs. At ~16x forward, Tractor Supply is trading well below the P/E multiple Mr. Market typically applied to the business over the past decade.
One final note: in the April 2023 initiation, I questioned the effectiveness of Tractor Supply’s M&A strategy, with emphasis on the 2016 Petsense deal. This quarter provided further validation for those concerns: the company is preparing to close 75 Petsense stores, or nearly 40% of the banner count.
Tractor Supply CEO Hal Lawton: “Generating modest positive comp sales is not where Tractor Supply should perform over the long term. We’re not satisfied with our business, and we’re taking decisive actions to improve it. Tractor Supply has successfully navigated changing economic environments for nearly 90 years, and we remain confident in the durability of our business model. We operate in end markets that are currently experiencing several discrete headwinds.”
A feature in “The Economist” highlighting the broadening reach of prediction markets like Kalshi and Polymarket, a direct competitive threat to OSBs like Flutter (Fanduel) and DraftKings. More broadly, the report explores issues like suspicious activity / insider trading and bet settlement / rule ambiguity.
“Nearly 40% of American men aged 18 to 34 have placed a bet on a prediction market, along with more than 20% of young women. In June, Kalshi processed $33 billion in trades… Kalshi and Polymarket are fundraising at valuations of ~$40 billion and ~$15 billion, respectively.”
“Brown-Forman Board Issues Statement”
The latest development in the Brown-Forman story, which comes in response to Sazerac’s takeover proposal. The board concluded that the proposal is “not actionable” because it doesn’t align with the “vision for [the] future” of the controlling shareholders. At the same time, the business is struggling and the stock is at levels first eclipsed in 2013; I suspect prioritizing independence may be subject to debate among the family members if the right price tag and deal structure are presented (“stand ready to improve the terms of our offer”).
“Brown-Forman today announced that its Board of Directors has received an unsolicited proposal from Sazerac to acquire Brown-Forman, and, taking into consideration Wolf Pen Branch, LP’s view as noted below, has concluded that Sazerac’s proposal is not actionable.”
TSOH Updates
Here’s the updated TSOH research list for the past six months:
Monday’s post will be an update on Microsoft (MSFT).
Have a great weekend!
NOTE - This is not investment advice. Do your own due diligence.
I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.