TRACTOR SUPPLY COMPANY REPORTS FIRST QUARTER RESULTS
Sales Increased 6.6% to $1.56 Billion
Comparable Store Sales Decreased 2.2%
Earnings per Share Decreased 8.0% to $0.46
Brentwood, TN, April 26, 2017 - Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail store chain in the United States, today announced financial results for its first quarter ended April 1, 2017.
First Quarter Results
As previously reported in the Company’s Business Update press release on April 11, 2017, net sales for the first quarter 2017 increased 6.6% to $1.56 billion from $1.47 billion in the first quarter of 2016. Comparable store sales decreased 2.2% compared to an increase of 4.9% (2.6% adjusted for the week shift) in the prior year’s first quarter. Each quarter of fiscal 2017 starts one week later than the same quarter of fiscal 2016 due to the Company’s 2016 fiscal year having 53 weeks versus the normal 52 weeks. The comparable store sales results included decreases in comparable transaction count and average ticket of 1.4% and 0.9%, respectively. The decrease in comparable store sales was primarily driven by lower sales of seasonal merchandise and the impact of deflation. On a regional basis, sales were most challenged in the Northern regions, where weather had a more pronounced impact on sales for the quarter. The weakness in seasonal categories was partially offset by a positive comparable store sales increase in the Livestock and Pet category.
Gross profit increased 4.8% to $518.2 million from $494.4 million in the prior year’s first quarter and gross margin decreased 60 basis points to 33.1% from 33.7% in the prior year’s first quarter. The decrease in gross margin was primarily driven by higher markdowns on cold weather merchandise, targeted promotional activity, and a higher freight expense for consumable, usable and edible (C.U.E.) products.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 9.2% to $421.8 million from $386.2 million in the prior year period. As a percent of net sales, SG&A expenses increased 70 basis points to 27.0% from 26.3% in the first quarter of 2016. The increase in the SG&A ratio was primarily attributable to the deleveraging of store personnel and occupancy expenses from the decline in comparable store sales.
Net income decreased 10.9% to $60.3 million from $67.7 million and diluted earnings per share decreased 8.0% to $0.46 from $0.50 in the first quarter of the prior year.
The Company opened 24 new Tractor Supply stores and converted its two Hometown Pet stores to Petsense stores in the first quarter of 2017 compared to 36 new store openings and three store closures, all of which were Del’s stores, in the prior year period. The Company also opened nine new Petsense stores (including the conversion of the Hometown Pet stores) during the quarter and had no store closures.
Greg Sandfort, Chief Executive Officer, stated, “Due to the challenging weather conditions, we were unable to offset the strong seasonal performance from last year’s first quarter. As the weather has normalized over the past few weeks, we are encouraged with how the customer has responded and believe there is significant spring business ahead of us. Looking ahead, we know the retail landscape is changing very quickly, and we know our customers’ expectations are changing as well. With this in mind, we continue to execute against the strategic initiatives that we believe will drive sales and customer service as well as maintain our competitive positioning.”
The following information was filed by Tractor Supply Co (TSCO) on Wednesday, April 26, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.