TRACTOR SUPPLY COMPANY REPORTS SECOND QUARTER 2018 FINANCIAL RESULTS
Net Sales Increased 9.7%; Comparable Store Sales Increased 5.6%
Diluted Earnings Per Share Increased 35.2% to $1.69
$324 Million of Capital Returned to Shareholders Year to Date
Company Raises Fiscal 2018 Financial Guidance
Brentwood, TN, July 26, 2018 - Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail chain in the United States, today announced financial results for its second quarter ended June 30, 2018.
“We delivered a solid second quarter with broad-based strength across our merchandise categories and geographies. Our 5.6% comparable store sales increase was driven by continued execution of our ONETractor strategy and merchandising initiatives that drove both average ticket and transaction count increases for the quarter. Even with a delayed start to the spring season, we were able to capitalize on the selling season for many spring products as we managed our inventories effectively. Given our performance year to date, we are raising our full year guidance for 2018,” said Greg Sandfort, Tractor Supply’s Chief Executive Officer.
Second Quarter 2018 Results
Net sales for the second quarter 2018 increased 9.7% to $2.21 billion from $2.02 billion in the second quarter of 2017. Comparable store sales increased 5.6% compared to an increase of 2.2% in the prior year’s second quarter. The comparable store sales results included increases in comparable average ticket of 3.7% and transaction count of 1.8%. The increase in comparable store sales was primarily driven by broad-based strength in everyday merchandise, along with robust growth across spring and summer seasonal categories. All merchandise categories delivered increased comparable store sales, as did all geographic regions.
Gross profit increased 9.2% to $769.4 million from $704.7 million in the prior year’s second quarter, and gross margin decreased 16 basis points to 34.8% from 34.9% in the prior year’s second quarter. The decline in gross margin resulted primarily from an increase in freight expense due to higher carrier rates and increased diesel fuel prices. Partially offsetting these items were the strength of the Company’s price management program and reduced promotional activity.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 11.0% to $496.0 million from $446.8 million in the prior year’s second quarter. As a percent of net sales, SG&A expenses increased 27 basis points to 22.4% from 22.1% in the second quarter of 2017. 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 and investments in infrastructure and technology to support the Company’s strategic long-term growth initiatives. These SG&A increases were partially offset by leverage in occupancy and other costs from the increase in comparable store sales.
The effective income tax rate was 22.8% compared to 37.0% in the prior year’s second quarter. The decrease in the effective income tax rate was primarily related to the U.S. Tax Cuts and Jobs Act that was signed into law in December 2017.
Net income increased 29.0% to $207.3 million from $160.6 million and diluted earnings per share increased 35.2% to $1.69 from $1.25 in the second quarter of 2017.
The following information was filed by Tractor Supply Co (TSCO) on Thursday, July 26, 2018 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.
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Ticker: TSCO CIK: 916365 Form Type:10-Q Quarterly Report Accession Number: 0000916365-18-000093 Submitted to the SEC: Thu Aug 09 2018 5:09:13 PM EST Accepted by the SEC: Thu Aug 09 2018 Period: Saturday, June 30, 2018 Industry: Retail Building Materials Hardware Garden Supply