TRACTOR SUPPLY COMPANY REPORTS THIRD QUARTER RESULTS
Sales Increased 11.6% to $1.72 Billion
Comparable Store Sales Increased 6.6%
Earnings per Share Increased 7.5% to $0.72
Brentwood, TN, October 25, 2017 - Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail store chain in the United States, today announced financial results for its third quarter ended September 30, 2017.
Third Quarter Results
Net sales for the third quarter 2017 increased 11.6% to $1.72 billion from $1.54 billion in the third quarter of 2016. Comparable store sales increased 6.6% versus a decrease of 0.6% in the prior year’s third 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. Adjusting for the week shift, comparable store sales would have decreased 1.1% in last year’s third quarter. The increase in comparable store sales in the third quarter of 2017 was driven by an increase in both traffic and ticket, with comparable store transaction count increasing 5.0% and average ticket increasing 1.5%. Comparable store sales were positive across all geographic regions and major product categories, including strong performance in year-round, seasonal and emergency response related areas.
Gross profit increased 12.2% to $600.5 million from $535.3 million and gross margin increased 20 basis points to 34.9% from 34.7% in the prior year’s third quarter. Favorable seasonal conditions, strong sell through rates and solid inventory management benefited gross margin. These benefits were partially offset by a greater mix of freight intensive categories and higher average fuel costs.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 15.0% to $452.2 million from $393.3 million in the prior year period. As a percent of net sales, SG&A expenses increased 80 basis points to 26.3% from 25.5% in the third quarter of 2016. The increase in SG&A as a percent of net sales was primarily attributable to higher incentive compensation from the strong year-over-year growth in comparable store sales, store payroll from the Company’s continued effort to enhance customer service and the integration of Petsense expenses. Additionally, the Company has made investments in infrastructure and technology to support its strategic long-term growth initiatives. These SG&A increases were partially offset by leverage in occupancy and other areas of the business from the increase in comparable store sales and cost savings initiatives.
Net income increased 2.7% to $91.9 million from $89.4 million and diluted earnings per share increased 7.5% to $0.72 from $0.67 in the third quarter of the prior year.
The Company opened 36 new Tractor Supply stores and closed one store, a Del’s store, in the third quarter of 2017 compared to 34 new store openings and one store closure, a Del’s store, in the prior year period. The Company also opened two new Petsense stores during the quarter and had no Petsense store closures.
Greg Sandfort, Chief Executive Officer, stated, “We delivered a strong third quarter with sales growth in all of our major product categories and geographic regions, as well as positive same store sales in both traffic and ticket. Our teams took the necessary steps to ensure we were well-stocked with the right products and inventory levels to meet the needs of our customers during the extended summer selling season and storm events. We know our customers look to us for their everyday basic needs, and we believe we have made the appropriate investments to better serve them. With a loyal and dedicated customer base, continued convergence of our physical and digital storefronts, and a
The following information was filed by Tractor Supply Co (TSCO) on Wednesday, October 25, 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.