2024-07-25 | Tractor Supply Company Reports Second Quarter 2024 Financial Results; Updates Fiscal 2024 Financial Outlook | NDAQ:TSCO | Press Release (2024)

Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States (the “Company”), today reported financial results for its second quarter ended June 29, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240725392237/en/

  • Net Sales Increase of 1.5% to $4.25 Billion
  • Comparable Store Sales Decrease of 0.5%
  • Diluted Earnings per Share (“EPS”) of $3.93
  • Company Updates 2024 Financial Outlook

“We are pleased with our second quarter EPS results that were in line with our outlook. My sincere appreciation goes out to our more than 50,000 Team Members for living our Mission and Values every day as we focus on taking care of our customers and each other. The team continued to execute extremely well, upholding the high standards we set for ourselves every day. At the halfway point of the year, we have made significant progress on our Life Out Here strategy. We continue to create more separation between us and our competition, thanks to our Team Members and the meaningful relationships they have with our customers,” said Hal Lawton, President and Chief Executive Officer of Tractor Supply.

Lawton continued, “We are confident that we have the right plans in place to win with our customers given the strength of our second half operational initiatives. We remain excited about the significant market share growth opportunities ahead of us as we focus on the continued creation of long-term value for our shareholders.”

Second Quarter 2024 Results

Net sales for the second quarter of 2024 increased 1.5% to $4.25 billion from $4.18 billion in the second quarter of 2023. The increase in net sales was driven by new store openings, partially offset by the decline in comparable store sales. Comparable store sales decreased 0.5%, as compared to an increase of 2.5% in the prior year’s second quarter, driven by a comparable average transaction count decline of 0.6%, partially offset by a comparable average ticket increase of 0.1%. Comparable store sales results reflect strength in seasonal merchandise including big ticket, partially offset by declines in year-round discretionary categories. As expected, consumable, usable and edible products were modestly negative with positive unit growth offset by average unit price pressure.

Gross profit increased 2.7% to $1.56 billion from $1.51 billion in the prior year’s second quarter, and gross margin increased 43 basis points to 36.6% from 36.2% in the prior year’s second quarter. The gross margin rate increase was primarily attributable to ongoing lower transportation costs along with disciplined product cost management and the continued execution of an everyday low price strategy. These improvements in gross margin rate were partially offset by growth in big ticket categories, which have below chain-average margins.

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 4.1% to $994.2 million from $955.4 million in the prior year’s second quarter. As a percentage of net sales, SG&A expenses increased 58 basis points to 23.4% from 22.8% in the second quarter of 2023. The increase in SG&A as a percent of net sales was primarily attributable to planned growth investments, which included the onboarding of a new distribution center and higher depreciation and amortization, as well as modest deleverage of the Company’s fixed costs given the decline in comparable store sales. These factors were partially offset by productivity improvements and strong cost control. During the second quarter of 2024, the Company’s ongoing sale-leaseback strategy benefited SG&A by approximately 12 basis points, net of transaction and repair costs, from the sale of two Tractor Supply locations.

Operating income was $561.5 million in the second quarter of 2024 compared to $559.3 million in the second quarter of 2023.

The effective income tax rate was 22.7% compared to 23.0% in the second quarter of 2023.

Net income increased 0.9% to $425.2 million from $421.2 million. Diluted EPS increased 2.6% to $3.93 compared to $3.83 in the second quarter of 2023.

The Company repurchased approximately 0.5 million shares of its common stock for $139.2 million and paid quarterly cash dividends totaling $118.5 million, returning a total of $257.7 million of capital to shareholders in the second quarter of 2024.

The Company opened 21 new Tractor Supply stores and three new Petsense by Tractor Supply stores in the second quarter of 2024.

Fiscal Year 2024 Financial Outlook

Based on year-to-date performance and its outlook, Tractor Supply is updating its financial guidance. For fiscal year 2024, the Company now expects the following:

Updated

Previous

Net Sales

$14.8 billion to $15.0 billion

$14.7 billion to $15.1 billion

Comparable Store Sales

(0.5%) to +1.0%

(1.0%) to +1.5%

Operating Margin Rate

9.8% to 10.1%

9.7% to 10.1%

Net Income

$1.08 billion to $1.12 billion

$1.06 billion to $1.13 billion

Earnings per Diluted Share

$10.00 to $10.40

$9.85 to $10.50

Conference Call Information

Tractor Supply Company will hold a conference call today, Thursday, July 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 293 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 June 29, 2024, the Company operated 2,254 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 June 29, 2024, the Company operated 205 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, value creation, customer trends, new stores and distribution centers, property development plans, return of capital, and financial guidance for 2024, including net sales, comparable store sales, operating margin rates, net income, earnings per diluted 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, including our upcoming Quarterly Report on Form 10-Q for the quarter ended June 29, 2024, which will describe additional risks relating to the scrutiny of our social and environmental strategies, initiatives and targets and our policies related thereto, which could adversely affect public perception of our business, employee morale, customer or stockholder support and have a material adverse effect on our business, liquidity, financial condition, and/or results of operations. 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, upcoming Quarterly Report on Form 10-Q for the quarter ended June 29, 2024, 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

Six Months Ended

June 29,
2024

July 1,
2023

June 29,
2024

July 1,
2023

% of

% of

% of

% of

Net

Net

Net

Net

Sales

Sales

Sales

Sales

Net sales

$

4,246,622

100.00

%

$

4,184,695

100.00

%

$

7,641,456

100.00

%

$

7,483,920

100.00

%

Cost of merchandise sold

2,690,996

63.37

2,669,926

63.80

4,864,976

63.67

4,799,243

64.13

Gross profit

1,555,626

36.63

1,514,769

36.20

2,776,480

36.33

2,684,677

35.87

Selling, general and administrative expenses

884,903

20.84

853,158

20.39

1,738,338

22.75

1,681,393

22.47

Depreciation and amortization

109,265

2.57

102,279

2.44

213,558

2.79

199,512

2.67

Operating income

561,458

13.22

559,332

13.37

824,584

10.79

803,772

10.74

Interest expense, net

11,612

0.27

12,343

0.30

23,514

0.31

25,023

0.33

Income before income taxes

549,846

12.95

546,989

13.07

801,070

10.48

778,749

10.41

Income tax expense

124,650

2.94

125,755

3.01

177,707

2.33

174,427

2.33

Net income

$

425,196

10.01

%

$

421,234

10.07

%

$

623,363

8.16

%

$

604,322

8.07

%

Net income per share:

Basic

$

3.95

$

3.85

$

5.78

$

5.51

Diluted

$

3.93

$

3.83

$

5.75

$

5.47

Weighted average shares outstanding:

Basic

107,730

109,426

107,838

109,735

Diluted

108,235

110,041

108,381

110,411

Dividends declared per common share outstanding

$

1.10

$

1.03

$

2.20

$

2.06

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

Six Months Ended

June 29,
2024

July 1,
2023

June 29,
2024

July 1,
2023

Net income

$

425,196

$

421,234

$

623,363

$

604,322

Other comprehensive (loss) / income:

Change in fair value of interest rate swaps, net of taxes

(1,382

)

778

(2,113

)

(1,059

)

Total other comprehensive (loss) / income

(1,382

)

778

(2,113

)

(1,059

)

Total comprehensive income

$

423,814

$

422,012

$

621,250

$

603,263

Consolidated Balance Sheets

(Unaudited)

(in thousands)

June 29,
2024

July 1,
2023

ASSETS

Current assets:

Cash and cash equivalents

$

394,748

$

620,031

Inventories

3,000,033

2,660,052

Prepaid expenses and other current assets

244,844

297,191

Total current assets

3,639,625

3,577,274

Property and equipment, net

2,566,723

2,185,476

Operating lease right-of-use assets

3,225,156

2,957,792

Goodwill and other intangible assets

269,520

267,088

Other assets

83,500

45,193

Total assets

$

9,784,524

$

9,032,823

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

1,436,520

$

1,272,232

Accrued employee compensation

69,920

66,181

Other accrued expenses

557,721

464,267

Current portion of finance lease liabilities

3,405

2,860

Current portion of operating lease liabilities

382,111

317,730

Income taxes payable

94,858

114,194

Total current liabilities

2,544,535

2,237,464

Long-term debt

1,730,467

1,727,504

Finance lease liabilities, less current portion

29,661

32,999

Operating lease liabilities, less current portion

2,980,876

2,762,877

Deferred income taxes

54,418

59,157

Other long-term liabilities

139,235

125,670

Total liabilities

7,479,192

6,945,671

Stockholders’ equity:

Common stock

1,423

1,418

Additional paid-in capital

1,349,198

1,283,589

Treasury stock

(5,717,944

)

(5,210,524

)

Accumulated other comprehensive income

4,680

10,216

Retained earnings

6,667,975

6,002,453

Total stockholders’ equity

2,305,332

2,087,152

Total liabilities and stockholders’ equity

$

9,784,524

$

9,032,823

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

Six Months Ended

June 29,
2024

July 1,
2023

Cash flows from operating activities:

Net income

$

623,363

$

604,322

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

213,558

199,512

(Gain)/loss on disposition of property and equipment

(4,210

)

(474

)

Share-based compensation expense

25,124

30,179

Deferred income taxes

(10,712

)

30,916

Change in assets and liabilities:

Inventories

(354,179

)

34,626

Prepaid expenses and other current assets

(33,345

)

(22,439

)

Accounts payable

256,717

(126,400

)

Accrued employee compensation

(21,558

)

(56,795

)

Other accrued expenses

19,996

(26,994

)

Income taxes

97,319

104,723

Other

5,270

11,145

Net cash provided by operating activities

817,343

782,321

Cash flows from investing activities:

Capital expenditures

(349,818

)

(349,586

)

Proceeds from sale of property and equipment

18,487

761

Proceeds from Orscheln acquisition net working capital settlement

4,310

Net cash used in investing activities

(331,331

)

(344,515

)

Cash flows from financing activities:

Borrowings under debt facilities

335,000

1,767,000

Repayments under debt facilities

(335,000

)

(1,195,000

)

Debt discounts and issuance costs

(9,729

)

Principal payments under finance lease liabilities

(864

)

(2,805

)

Repurchase of shares to satisfy tax obligations

(22,717

)

(23,121

)

Repurchase of common stock

(255,756

)

(345,653

)

Net proceeds from issuance of common stock

28,349

15,252

Cash dividends paid to stockholders

(237,347

)

(226,221

)

Net cash used in financing activities

(488,335

)

(20,277

)

Net (decrease)/increase in cash and cash equivalents

(2,323

)

417,529

Cash and cash equivalents at beginning of period

397,071

202,502

Cash and cash equivalents at end of period

$

394,748

$

620,031

Supplemental disclosures of cash flow information:

Cash paid during the period for:

Interest, net of amounts capitalized

$

30,203

$

20,462

Income taxes cash paid

89,875

36,226

Supplemental disclosures of non-cash activities:

Non-cash accruals for property and equipment

$

61,418

$

27,031

Increase of operating lease assets and liabilities from new or modified leases

272,524

260,268

Increase of finance lease assets and liabilities from new or modified leases

450

Selected Financial and Operating Information

(Unaudited)

Three Months Ended

Six Months Ended

June 29,
2024

July 1,
2023

June 29,
2024

July 1,
2023

Sales Information:

Comparable store sales (decrease)/increase

(0.5

)%

2.5

%

0.2

%

2.3

%

New store sales (% of total sales)

2.0

%

4.8

%

2.0

%

4.5

%

Average transaction value

$

63.46

$

63.56

$

61.24

$

61.44

Comparable store average transaction value (decrease)/increase (a)

0.1

%

0.6

%

(0.1

)%

1.6

%

Comparable store average transaction count (decrease)/increase

(0.6

)%

1.8

%

0.3

%

0.7

%

Total selling square footage (000’s)

38,383

37,809

38,383

37,809

Exclusive brands (% of total sales)

26.7

%

28.0

%

28.1

%

29.8

%

Imports (% of total sales)

10.9

%

11.5

%

11.0

%

11.5

%

Store Count Information:

Tractor Supply

Beginning of period

2,233

2,164

2,216

2,147

New stores opened

21

17

38

34

Stores closed

End of period

2,254

2,181

2,254

2,181

Petsense by Tractor Supply

Beginning of period

202

189

198

186

New stores opened

3

3

7

6

Stores closed

End of period

205

192

205

192

Consolidated end of period

2,459

2,373

2,459

2,373

Pre-opening costs (000’s)

$

2,251

$

4,878

$

4,613

$

7,942

Balance Sheet Information:

Average inventory per store (000’s) (b)

$

1,138.0

$

1,032.9

$

1,138.0

$

1,032.9

Inventory turns (annualized)

3.64

3.92

3.41

3.57

Share repurchase program:

Cost (000’s) (c)

$

140,546

$

157,448

$

259,089

$

354,616

Average purchase price per share

$

272.52

$

222.42

$

254.81

$

225.34

(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

Six Months Ended

June 29, 2024

July 1, 2023

June 29, 2024

July 1, 2023

Capital Expenditures (millions):

Existing stores

$

76.4

$

79.1

$

134.2

$

162.1

New stores, relocated stores and stores not yet opened

58.0

28.3

119.7

61.5

Information technology

35.7

29.2

60.1

51.1

Distribution center capacity and improvements

19.1

54.1

32.2

73.7

Corporate and other

3.4

1.0

3.6

1.2

Total

$

192.6

$

191.7

$

349.8

$

349.6

2024-07-25 | Tractor Supply Company Reports Second Quarter 2024 Financial Results; Updates Fiscal 2024 Financial Outlook | NDAQ:TSCO | Press Release (1)

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725392237/en/

2024-07-25 | Tractor Supply Company Reports Second Quarter 2024 Financial Results; Updates Fiscal 2024 Financial Outlook | NDAQ:TSCO | Press Release (2024)

FAQs

What is the revenue of Tractor Supply in 2024? ›

Tractor Supply revenue for the twelve months ending March 31, 2024 was $14.651B, a 1.18% increase year-over-year. Tractor Supply annual revenue for 2023 was $14.556B, a 2.47% increase from 2022.

What is the net worth of Tractor Supply? ›

Tractor Supply net worth as of August 02, 2024 is $27.25B.

Are Tractor Supply franchises? ›

Tractor Supply Company owns and operates all its stores. Franchising of operations is not part of the Company's growth strategy.

What is happening with TSC? ›

Tractor Supply cuts DEI, climate goals after conservative outcry The rural lifestyle retailer, with stores in 49 states, says it will withdraw its carbon emissions goals, cut its DEI roles and stop sponsoring Pride events after an online outcry from conservatives.

Why is Tractor Supply stock falling? ›

Tractor Supply Co.'s stock erased early losses to trade flat Thursday after the retailer, which is geared toward rural living, posted weaker-than-expected second-quarter sales and narrowed guidance to lower the top of its profit and sales ranges.

What is the controversy with Tractor Supply? ›

Tractor Supply (TSCO) is facing outrage from Black farmers after it made a drastic decision to appease its conservative customers. The farm supply company recently axed its diversity, equity, and inclusion initiatives and climate change advocacy.

Which tractor company sells the most? ›

Mahindra Tractor bears the distinction of being the World's Largest Tractor Company (by volume) and is sold in over 50 countries, across 6 continents under three brands.

Who owns the largest tractor in the world? ›

The tractor belongs to Rober and Randy Williams of Big Sandy, Montana, who bought it from the original owner Rossi Bros Cotton Farms in California. The Williams Bros used Big Bud 747 for cultivating until a tire suffered irreparable damage. Its original tire manufacturer, United Tire Co.

How much is the most expensive farm tractor? ›

Delving into the realm of high-priced machinery, one inevitably wonders, 'What is the most expensive tractor in the world? ' The title of the world's most expensive tractor goes to a relic of agricultural history that fetched an astounding $1,470,000 at an auction held on April 21, 2022.

Who is Tractor Supply merging with? ›

The Federal Trade Commission approved a consent order addressing FTC concerns related to Tractor Supply Company's acquisition of the rival chain Orscheln Farm and Home LLC.

What store competes with Tractor Supply? ›

Tractor Supply Company competitors include The Home Depot, Ace Hardware, Harbor Freight Tools, Lowe's Home Improvement and LL Flooring.

Does Tractor Supply do military discounts? ›

Yes, Tractor Supply Co. has a Military discount! Tractor Supply Co. is one of the hundreds of retailers offering special savings for verified Military community members through ID.me Shop.

What disease is associated with tuberous sclerosis? ›

Individuals with tuberous sclerosis complex often develop a pattern of behaviors called TSC-associated neuropsychiatric disorders (TAND). These disorders include hyperactivity, aggression, psychiatric conditions, intellectual disability, and problems with communication and social interaction (autism spectrum disorder).

What age do people with tuberous sclerosis live to? ›

Most people with TSC will live a normal life span.

What organs does TSC affect? ›

The organs most often affected by tuberous sclerosis complex (TSC) are the brain, heart, skin, kidneys, lung, and eyes. These organs exhibit the most medically and diagnostically significant symptoms of the disorder and should be closely monitored in anyone diagnosed with TSC.

What is the revenue of Tractor Supply? ›

According to Tractor Supply's latest financial reports the company's current revenue (TTM ) is $14.65 B. In 2023 the company made a revenue of $14.55 B an increase over the years 2022 revenue that were of $14.20 B. The revenue is the total amount of income that a company generates by the sale of goods or services.

What is the guidance for Tractor Supply 2024? ›

The company issued revenue guidance of $14.8-$15.0 billion, compared to the consensus revenue estimate of $14.98 billion. Tractor Supply also updated its FY 2024 guidance to 10.000-10.400 EPS.

Is Tractor Supply growing? ›

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.

Who is buying Tractor Supply? ›

In July 2016, Peavey Mart acquired a controlling stake in TSC, and later acquired the company outright.

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