Tractor Supply Company (NASDAQ: TSCO), the largest rural
lifestyle retailer in the United States (the “Company”), today
reported financial results for its first quarter ended March 30,
2024.
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the full release here:
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- Net Sales Increase of 2.9% to $3.39 Billion
- Comparable Store Sales Increase of 1.1%, Led by Transaction
Growth
- Diluted Earnings per Share (“EPS”) of $1.83, a 10.9% Increase
Over Prior Year
- Company Reiterates 2024 Financial Outlook
“For the first quarter, Tractor Supply’s results were in line
with our expectations with positive comparable store sales and
robust earnings growth. I want to thank our more than 50,000 Team
Members for their enduring commitment to living our Mission and
Values and providing exceptional customer service, which allowed us
to deliver solid financial performance in the first quarter. We saw
several positive signs in our business during the quarter,
including ongoing market share gains, transaction growth and
strength in big ticket sales. Most importantly, we believe that our
customer base remains healthy and engaged. We remain confident in
our outlook for 2024 given our share gains and the continued
scaling of our Life Out Here strategy. We remain committed to
disciplined investments to capture the significant long-term growth
opportunities in our market,” said Hal Lawton, President and Chief
Executive Officer of Tractor Supply.
First Quarter 2024
Results
Net sales for the first quarter of 2024 increased 2.9% to a
record $3.39 billion from $3.30 billion in the first quarter of
2023. The increase in net sales was driven by new store openings
and growth in comparable store sales. Comparable store sales
increased 1.1%, as compared to an increase of 2.1% in the prior
year’s first quarter, driven by a comparable average transaction
count increase of 1.3% and a comparable average ticket decline of
0.2%. Comparable store sales growth reflects strength in seasonal
merchandise, partially offset by declines for year-round
discretionary categories. Consumable, usable and edible products
performed in line with the Company’s overall comparable store sales
increase.
Gross profit increased 4.4% to $1.22 billion from $1.17 billion
in the prior year’s first quarter, and gross margin increased 50
basis points to 36.0% from 35.5% in the prior year’s first quarter.
The gross margin rate increase was primarily attributable to
ongoing lower transportation costs, disciplined product cost
management and the continued execution of an everyday low price
strategy.
Selling, general and administrative (“SG&A”) expenses,
including depreciation and amortization, increased 3.5% to $957.7
million from $925.5 million in the prior year’s first quarter. As a
percentage of net sales, SG&A expenses increased 16 basis
points to 28.2% from 28.1% in the first quarter of 2023. The
increase in SG&A as a percent of net sales was primarily
attributable to planned growth investments, which included higher
depreciation and amortization, and modest deleverage of the
Company’s fixed costs given the level of comparable store sales
growth. These factors were partially offset by productivity
improvements and strong cost control.
Operating income increased 7.6% to $263.1 million from $244.4
million in the first quarter of 2023.
The effective income tax rate was 21.1% compared to 21.0% in the
first quarter of 2023.
Net income increased 8.2% to $198.2 million from $183.1 million.
Diluted EPS increased 10.9% to $1.83 compared to $1.65 in the first
quarter of 2023.
The Company repurchased approximately 0.5 million shares of its
common stock for $117.4 million and paid quarterly cash dividends
totaling $118.8 million, returning a total of $236.2 million of
capital to shareholders in the first quarter of 2024.
The Company opened 17 new Tractor Supply stores and four new
Petsense by Tractor Supply stores in the first quarter of 2024.
Fiscal Year 2024 Financial
Outlook
Based on year-to-date performance and its outlook, Tractor
Supply reiterates the following financial guidance for fiscal year
2024, initially provided on February 1, 2024:
Net Sales
$14.7 billion to $15.1
billion
Comparable Store Sales
(1.0%) to +1.5%
Operating Margin Rate
9.7% to 10.1%
Net Income
$1.06 billion to $1.13
billion
Earnings per Diluted Share
$9.85 to $10.50
Capital plans for 2024 include opening approximately 80 new
Tractor Supply stores, continuing Project Fusion remodels and
garden center transformations, opening the Company’s 10th
distribution center and opening 10 to 15 new Petsense by Tractor
Supply stores.
Conference Call
Information
Tractor Supply Company will hold a conference call today,
Thursday, April 25, 2024 at 10 a.m. ET. The call will be webcast
live at IR.TractorSupply.com. An investor presentation will be
available on the investor relations section of the Company’s
website at least 15 minutes prior to the conference call.
Please allow extra time prior to the call to visit the site and
download the streaming media software required to listen to the
webcast.
A replay of the webcast will also be available at
IR.TractorSupply.com shortly after the conference call
concludes.
About Tractor Supply
Company
For more than 85 years, Tractor Supply Company (NASDAQ: TSCO)
has been passionate about serving the needs of recreational
farmers, ranchers, homeowners, gardeners, pet enthusiasts and all
those who enjoy living Life Out Here. Tractor Supply is the largest
rural lifestyle retailer in the U.S., ranking 291 on the Fortune
500. The Company’s more than 50,000 Team Members are known for
delivering legendary service and helping customers pursue their
passions, whether that means being closer to the land, taking care
of animals or living a hands-on, DIY lifestyle. In store and
online, Tractor Supply provides what customers need – anytime,
anywhere, any way they choose at the low prices they deserve.
As of March 30, 2024, the Company operated 2,233 Tractor Supply
stores in 49 states. For more information on Tractor Supply, visit
www.tractorsupply.com.
Tractor Supply Company also owns and operates Petsense by
Tractor Supply, a small-box pet specialty supply retailer providing
products and services for pet owners. As of March 30, 2024, the
Company operated 202 Petsense by Tractor Supply stores in 23
states. For more information on Petsense by Tractor Supply, visit
www.Petsense.com.
Forward-Looking
Statements
This press release contains certain forward-looking statements,
including statements regarding market share gains, positive
customer trends, new stores and distribution centers, property
development plans, and financial guidance for 2024, including net
sales, comparable store sales, operating margin rates, net income,
diluted earnings per share, capital expenditures and plans, share
repurchase, and sale-leaseback transactions. All forward-looking
statements are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, are subject to the
finalization of the Company’s quarterly financial and accounting
procedures, and may be affected by certain risks and uncertainties,
any one, or a combination, of which could materially affect the
results of the Company’s operations. Forward-looking statements are
usually identified by or are associated with such words as “will,”
“would,” “intend,” “expect,” “continue,” “believe,” “anticipate,”
“optimistic,” “forecasted” and similar terminology. Actual results
could vary materially from the expectations reflected in these
statements. As with any business, all phases of our operations are
subject to facts outside of our control. These factors include,
without limitation, those factors discussed in the “Risk Factors”
section of the Company’s Annual Reports or Form 10-K and other
filings with the Securities and Exchange Commission.
Forward-looking statements made by or on behalf of the Company are
based on knowledge of its business and the environment in which it
operates, but because of the factors listed above, actual results
could differ materially from those reflected by any forward-looking
statements. Consequently, all of the forward-looking statements
made are qualified by these cautionary statements and those
contained in the Company’s Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. There can be
no assurance that the results or developments anticipated by the
Company will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on the
Company or its business and operations. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company does not undertake
any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events, except as required by law.
(Financial tables to follow)
Consolidated Statements of Income
(Unaudited)
(in thousands, except per
share and percentage data)
Three Months Ended
March 30, 2024
April 1, 2023
% of
% of
Net
Net
Sales
Sales
Net sales
$
3,394,834
100.00
%
$
3,299,225
100.00
%
Cost of merchandise sold
2,173,980
64.04
2,129,317
64.54
Gross profit
1,220,854
35.96
1,169,908
35.46
Selling, general and administrative
expenses
853,436
25.14
828,235
25.10
Depreciation and amortization
104,293
3.07
97,233
2.95
Operating income
263,125
7.75
244,440
7.41
Interest expense, net
11,902
0.35
12,680
0.38
Income before income taxes
251,223
7.40
231,760
7.03
Income tax expense
53,056
1.56
48,672
1.48
Net income
$
198,167
5.84
%
$
183,088
5.55
%
Net income per share:
Basic
$
1.84
$
1.66
Diluted
$
1.83
$
1.65
Weighted average shares
outstanding:
Basic
107,946
110,045
Diluted
108,528
110,781
Dividends declared per common share
outstanding
$
1.10
$
1.03
Note: Percent of net sales amounts may not
sum to totals due to rounding.
Consolidated Statements of Comprehensive
Income
(Unaudited)
(in thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Net income
$
198,167
$
183,088
Other comprehensive (loss) / income:
Change in fair value of interest rate
swaps, net of taxes
(731
)
(1,837
)
Total other comprehensive (loss) /
income
(731
)
(1,837
)
Total comprehensive income
$
197,436
$
181,251
Consolidated Balance Sheets
(Unaudited)
(in thousands)
March 30, 2024
April 1, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
264,085
$
190,078
Inventories
3,048,719
3,030,712
Prepaid expenses and other current
assets
206,680
235,510
Income taxes receivable
—
2,621
Total current assets
3,519,484
3,458,921
Property and equipment, net
2,496,948
2,144,769
Operating lease right-of-use assets
3,188,973
2,950,610
Goodwill and other intangible assets
269,520
253,262
Other assets
80,029
41,253
Total assets
$
9,554,954
$
8,848,815
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,515,681
$
1,526,540
Accrued employee compensation
22,880
21,507
Other accrued expenses
559,688
472,742
Current portion of finance lease
liabilities
3,359
2,818
Current portion of operating lease
liabilities
376,816
313,809
Income taxes payable
39,331
12,284
Total current liabilities
2,517,755
2,349,700
Long-term debt
1,729,715
1,601,563
Finance lease liabilities, less current
portion
30,530
33,831
Operating lease liabilities, less current
portion
2,944,002
2,751,756
Deferred income taxes
68,489
76,450
Other long-term liabilities
140,452
120,969
Total liabilities
7,430,943
6,934,269
Stockholders’ equity:
Common stock
1,422
1,417
Additional paid-in capital
1,332,608
1,262,775
Treasury stock
(5,577,398
)
(5,053,077
)
Accumulated other comprehensive income
6,062
9,438
Retained earnings
6,361,317
5,693,993
Total stockholders’ equity
2,124,011
1,914,546
Total liabilities and stockholders’
equity
$
9,554,954
$
8,848,815
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Cash flows from operating
activities:
Net income
$
198,167
$
183,088
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
104,293
97,233
Loss/(gain) on disposition of property and
equipment
1,305
(139
)
Share-based compensation expense
14,448
14,514
Deferred income taxes
9,137
45,675
Change in assets and liabilities:
Inventories
(402,865
)
(321,115
)
Prepaid expenses and other current
assets
4,320
10,166
Accounts payable
335,878
128,252
Accrued employee compensation
(68,598
)
(98,796
)
Other accrued expenses
20,193
(39,243
)
Income taxes
41,792
191
Other
(662
)
(272
)
Net cash provided by operating
activities
257,408
19,554
Cash flows from investing
activities:
Capital expenditures
(157,199
)
(157,943
)
Proceeds from sale of property and
equipment
4,943
259
Net cash used in investing activities
(152,256
)
(157,684
)
Cash flows from financing
activities:
Borrowings under debt facilities
150,000
747,000
Repayments under debt facilities
(150,000
)
(310,000
)
Principal payments under finance lease
liabilities
(1,203
)
(1,631
)
Repurchase of shares to satisfy tax
obligations
(22,001
)
(21,643
)
Repurchase of common stock
(117,843
)
(183,196
)
Net proceeds from issuance of common
stock
21,718
8,623
Cash dividends paid to stockholders
(118,809
)
(113,447
)
Net cash (used in)/provided by financing
activities
(238,138
)
125,706
Net decrease in cash and cash
equivalents
(132,986
)
(12,424
)
Cash and cash equivalents at beginning of
period
397,071
202,502
Cash and cash equivalents at end of
period
$
264,085
$
190,078
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest, net of amounts capitalized
$
3,903
$
9,274
Income taxes cash paid
1,775
1,955
Supplemental disclosures of non-cash
activities:
Non-cash accruals for property and
equipment
$
65,821
$
45,178
Increase of operating lease assets and
liabilities from new or modified leases
139,094
84,740
Increase of finance lease assets and
liabilities from new or modified leases
—
450
Selected
Financial and Operating Information
(Unaudited)
Three Months Ended
March 30, 2024
April 1, 2023
Sales Information:
Comparable store sales increase
1.1
%
2.1
%
New store sales (% of total sales)
1.8
%
4.3
%
Average transaction value
$
58.66
$
58.92
Comparable store average transaction value
(decrease)/increase (a)
(0.2
)%
2.8
%
Comparable store average transaction count
(decrease)/increase
1.3
%
(0.7
)%
Total selling square footage (000’s)
38,136
37,532
Exclusive brands (% of total sales)
29.7
%
31.1
%
Imports (% of total sales)
11.4
%
11.0
%
Store Count Information:
Tractor
Supply
Beginning of period
2,216
2,147
New stores opened
17
17
Stores closed
—
—
End of period
2,233
2,164
Petsense by Tractor
Supply
Beginning of period
198
186
New stores opened
4
3
Stores closed
—
—
End of period
202
189
Consolidated end of period
2,435
2,353
Pre-opening costs (000’s)
$
2,362
$
3,064
Balance Sheet Information:
Average inventory per store (000’s)
(b)
$
1,184.0
$
1,229.8
Inventory turns (annualized)
3.13
3.14
Share repurchase program:
Cost (000’s) (c)
$
118,543
$
197,168
Average purchase price per share
$
236.57
$
227.67
(a)
Comparable store average transaction value
changes include the impact of transaction value changes achieved on
the current period change in transaction count.
(b)
Assumes average inventory cost, excluding
inventory in transit.
(c)
Effective January 1, 2023, the Company’s
share repurchases are subject to a 1% excise tax as a result of the
Inflation Reduction Act of 2022. Excise taxes incurred on share
repurchases represent direct costs of the repurchase and are
recorded as a part of the cost basis of the shares within treasury
stock.
Note: Comparable store metrics percentages
may not sum to total due to rounding.
Three Months Ended
March 30, 2024
April 1, 2023
Capital Expenditures
(millions):
New stores, relocated stores and stores
not yet opened
$
61.7
$
33.2
Existing stores
57.8
83.0
Information technology
24.4
21.9
Distribution center capacity and
improvements
13.1
19.6
Corporate and other
0.2
0.2
Total
$
157.2
$
157.9
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425331896/en/
Mary Winn Pilkington (615) 440-4212 Joseph Underwood (615)
440-4658 investorrelations@tractorsupply.com
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