TRACTOR SUPPLY COMPANY REPORTS
FOURTH QUARTER AND FULL YEAR 2016 RESULTS
Fourth Quarter Comparable Store Sales Increased 3.1%
Fourth Quarter Earnings per Share Increased 14.6% to $0.94
Full Year Earnings per Share Increased 9.0% to $3.27
Brentwood, TN, February 1, 2017 - Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail store chain in the United States, today announced financial results for its fourth quarter and fiscal year ended December 31, 2016. Additionally, the Company provided its initial outlook for fiscal 2017.
Fourth Quarter Results
Net sales for the fourth quarter 2016 increased 16.4% to $1.92 billion from $1.65 billion in the fourth quarter of 2015. The fourth quarter included an extra sales week as part of the Company’s 53-week calendar in 2016, which represented 6.2 percentage points of the overall 16.4% sales increase. Comparable store sales increased 3.1% versus a decrease of 1.4% in the prior year’s fourth quarter. The 3.1% increase includes an estimated 60 basis point benefit from one additional comparable sales day in the fourth quarter of 2016 versus the prior year. Comparable store transaction count increased 4.0% and average ticket decreased 0.9%. This represents the 35th consecutive quarter of comparable transaction count growth. Comparable store sales were driven by strong performance in everyday basic items across a number of consumable, usable and edible (C.U.E.) and hardline related areas such as livestock and pet, bird and wildlife, trailers and accessories, hand tools and livestock equipment.
Gross profit increased 15.2% to $646.3 million from $561.0 million and gross margin rate decreased to 33.7% from 34.1% in the prior year’s fourth quarter. The decline in gross margin was primarily driven by a higher mix of C.U.E. products, which generally carry below chain average gross margin, and a slightly higher level of promotional activity. Freight expense did not have a significant impact on the quarter.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 16.5% to $451.6 million from $387.7 million in the prior year period. As a percent of net sales, SG&A expenses remained flat at 23.6% compared to the fourth quarter of 2015. SG&A expenses as a percent of net sales benefited from leverage of occupancy costs resulting from the 53rd week of sales and the 3.1% increase in comparable store sales. These benefits were primarily offset by higher store personnel and advertising costs, related primarily to sales driving initiatives, as well as the incremental acquisition and operating expenses associated with the Petsense acquisition.
Net income increased 10.6% to $123.6 million from $111.7 million, and diluted earnings per share increased 14.6% to $0.94 from $0.82 in the fourth quarter of the prior year. The Company estimates that the 53rd week in 2016 represented a benefit of approximately $0.055 per diluted share.
The Company opened 21 new stores and closed one Del’s store in the fourth quarter of 2016 compared to 26 new store openings and three store closures, two of which were Del’s stores, in the prior year period. Additionally in the fourth quarter of 2016, the Company acquired Petsense LLC. At the end of the fourth quarter, there were 143 Petsense stores, which included eight store openings and one store closure during the quarter.
Greg Sandfort, Chief Executive Officer, stated, “While it was obviously a challenging retail environment, our Tractor Supply team managed the business well and drove strong comparable store sales and earnings per share growth. Throughout the quarter, the team worked hard to take advantage of weather trends, localize assortments, manage
The following information was filed by Tractor Supply Co (TSCO) on Wednesday, February 1, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.