I'm starting to worry about Tractor Supply (NASDAQ:TSCO).

It's been a rough few quarters on the sales and earnings front. Weak second-quarter sales were blamed on a slowdown in the purchase of "big-ticket" items such as generators and power equipment. And while third-quarter sales grew a nice 16.6%, higher selling, general, and administrative costs caused diluted earnings to fall from 2005 levels.

In the just-released fourth-quarter results, total sales growth decelerated to 5.3% and earnings fell yet again, by 4%. This time, blame was put on "unseasonably warm weather in the northern regions of the country" that supposedly kept people away from the stores. And a shift of advertising from the third to the fourth quarter increased expenses. Funny, but that shift didn't seem to have much benefit for the third quarter. To top it off, inventory grew 28.8%, so merchandise seems to be stuck on store shelves for the time being.

Add it all up and annual top-line results were still strong, as total sales grew 14.6%, which was even higher if you consider that fiscal 2005 contained 53 weeks. But same-store sales were up only 1.6% and diluted earnings grew only 6.2% to $2.22 per share. Management expects a slowing of top-line trends for the year ahead because it sees sales growing 12.5% to $2.7 billion to $2.74 billion, an improvement in comps to 3% to 4%, and diluted earnings of $2.45 to $2.52 per share. That would represent bottom-line growth as high as 13%.

I consider the 2006 results an overall disappointment because Tractor Supply has been able to grow sales and earnings by more than 20% on average in each of the past five years. I'll wait until it files its 10-K to see how cash flow metrics turned out for the year, but I expect more from the company.

On a trailing basis, Tractor Supply is trading at more than 21 times earnings, and that's considering the 7% haircut the shares took after full-year results were released Thursday. The forward multiple of just less than 19 times is better, but that's a bit pricey for a company growing in the low double digits.

I still think Tractor Supply has some compelling new-store growth prospects, and its rural focus keeps it out of the reach of formidable competitors such as Lowe's (NYSE:LOW) and Home Depot (NYSE:HD) for farm and ranch supplies and PetSmart (NASDAQ:PETM) for pet supplies. But for the time being, it doesn't seem to have the right merchandise mix, and it will have to work through the increased inventory before performance improves.

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Fool contributor Ryan Fuhrmann is long shares of Tractor Supply, PetSmart, and Home Depot but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.