Tractor Supply Company Reports Third Quarter Results
Tractor Supply Company Reports Third Quarter Results
~ Earnings per Share Increased 19.0% to $0.69 vs. $0.58
~~ Raises Full Year 2012 EPS Guidance ~
~ Sales Increased 9.0% to $1.07 Billion and Same-Store Sales Increased 2.9%
BRENTWOOD, Tenn., Oct. 24, 2012 /PRNewswire/ -- Tractor Supply Company (NASDAQ: TSCO), the largest retail farm and ranch store chain in the United States, today announced financial results for its third fiscal quarter ended September 29, 2012.
Third Quarter Results
Net sales increased 9.0% to $1.07 billion from $977.8 million in the prior year's third quarter. Same-store sales increased 2.9% compared to a very strong 11.5% increase in the prior-year period. The same-store sales increase was driven primarily by continued strong results in key consumable, usable and edible (C.U.E.) products, principally animal- and pet-related merchandise.
Each quarter of fiscal 2012 starts one week later than the same quarter of fiscal 2011 due to the Company's 2011 fiscal year having 53 weeks versus the normal 52 weeks. Adjusting for the one-week calendar shift, same-store sales for the third quarter of 2011 increased 11.9%. Same-store sales for the four quarters and full year of 2011, adjusted for the one-week calendar shift, are presented in the attached table of Selected Financial and Operating Information.
Gross margin dollars increased 9.0% to $357.2 million from $327.6 million in the prior year's third quarter. As a percent of sales, gross margin was flat to last year, at 33.5% in the current and prior year's third quarters. Gross margin rate was favorably impacted by sales mix, as the Company sold a reduced percentage of low margin, big ticket products than in the previous year. The Company continues to benefit from key margin-driving initiatives, including strategic sourcing and price optimization. These gross margin improvements were offset by increased transportation costs related to increased imports of seasonal goods and the negative impact of the mix shift to freight-intensive C.U.E. products.
Selling, general and administrative expenses, including depreciation and amortization, improved to 26.2% of sales compared to 26.5% of sales in the prior year's third quarter. The improvement as a percent of sales was primarily attributable to lower year-over-year incentive compensation expense and expense control related to other store personnel costs.
Net income for the quarter was $50.0 million, or $0.69 per diluted share, compared to net income of $42.7 million, or $0.58 per diluted share, in the third quarter of the prior year.
The Company opened 17 new stores and closed one store in the third quarter of 2012 compared to 12 new store openings and one store closure in the prior year's third quarter.
Jim Wright, Chairman and Chief Executive Officer, stated, "We are delighted with our ability to once again generate double-digit EPS growth during the third quarter, with our team executing exceptionally well through less than ideal weather conditions. We are pleased with our same store sales gain in light of last year's very strong 11.5% comp increase and moderate inflation this year. Our core C.U.E. businesses posted solid increases above last year. Additionally, we demonstrated our ability to recognize and react quickly to the regional weather trends that developed through the quarter. As a testament to the progress we are making on our key initiatives and the stability we have built in our business, we achieved our 18th consecutive quarter of comp transaction count increases."
First Nine Months Results
Net sales increased 12.9% to $3.38 billion from $2.99 billion in the first nine months of 2011. Same-store sales increased 5.5% compared to an 8.5% increase in the first nine months of 2011. Gross margin dollars increased 13.7% to $1.14 billion, or 33.8% of sales, compared to $1.00 billion, or 33.5% of sales, in the first nine months of 2011.
Selling, general and administrative expenses, including depreciation and amortization, increased 8.8% to $829.4 million, but improved as a percent of sales to 24.6% compared to 25.5% for the first nine months of 2011.
Net income was $197.0 million, or $2.69 per diluted share, compared to net income of $152.2 million, or $2.05 per diluted share, for the first nine months of 2011.
The Company opened 68 new stores and closed two stores in the first nine months of 2012 compared to 54 new store openings and one store closure during the first nine months of 2011.
Net sales for the full-year 2012 are now expected to range between $4.61 billion and $4.65 billion compared to the Company's previously expected range of $4.58 billion and $4.65 billion. Same-store sales for the year are now expected to increase 4.0% to 5.0% compared to the prior expectation for an increase of 3.5% to 5.0%. Based on stronger than expected net income per diluted share for the third quarter, the Company now anticipates net income per diluted share for the full-year 2012 will range between $3.63 and $3.69, compared to its previous guidance of $3.58 and $3.66.
Mr. Wright continued, "Our third quarter performance highlights the underlying strength of our core businesses. We continue to demonstrate our ability to successfully navigate through a wide array of variables as we focus on managing the controllable. We continue to evolve our assortments and the in-store experience to provide customers with compelling values every day, with the right products in the right regions at the right time."
Mr. Wright concluded, "As recently announced, I will be assuming the role of Executive Chairman by the end of the year, at which point, Greg Sandfort will take on the role of Chief Executive Officer in addition to his current role as President. The succession planning process has been underway for some time and we are executing a smooth and effective transition. Tractor Supply is strongly positioned competitively, operationally and financially, and we remain energized about the opportunities ahead."
Conference Call Information
Tractor Supply Company will be hosting a conference call at 5:00 p.m. Eastern Time today