What happened

Rural-lifestyle retailer Tractor Supply (NASDAQ:TSCO) trailed the market last month by shedding 15%, compared to a 4% decrease in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts.

The slump has added to a difficult run for shareholders, who've seen their investment fall by about 25% over the last three years, compared to a 31% increase in the broader market.

So what

February's decline came in response to mixed operating results from the retailing chain. Sales edged past management's expectations in the fiscal fourth quarter, and pricing trends held up well to push up gross profit margin.

A tractor working in a field

Image source: Getty Images.

However, Tractor Supply spent heavily on initiatives like e-commerce fulfillment, which reduced bottom line profitability and sent earnings lower.

Now what

CEO Greg Sandfort and his team are projecting another year of elevated spending that will eat up many of the benefits brought on by recent tax-law changes. Their sales growth forecast calls for revenue to rise at about the same 3% rate that Tractor Supply managed in 2017. As usual, that outlook is subject to a major revision following second-quarter results, when the company will have a better reading on its peak spring selling trends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.