Net Sales Increased 9.3%;
Comparable Store Sales Increased 5.1%
Diluted Earnings Per Share
Increased 31.9% to $0.95
$398.4 Million of Capital Returned to Shareholders Year to Date
Company Raises Fiscal 2018
Financial Guidance
BRENTWOOD, Tenn., Oct. 25, 2018 (GLOBE NEWSWIRE) -- Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail chain in the United States, today announced financial results for its third quarter ended September 29, 2018.
“We are delighted with Tractor Supply’s third quarter results and are on track to deliver a strong year in 2018. Our 5.1% comparable store sales growth increase in the quarter was driven by continued execution of our ONETractor strategy that drove both average ticket and transaction count increases for the quarter. The team did a great job managing our product assortment, marketing events and store experience as we cycled a strong comparable store sales increase of 6.6% in the prior year’s third quarter. We have raised our full year outlook to reflect the strength of our business and the positive macro economic factors,” said Greg Sandfort, Tractor Supply’s Chief Executive Officer.
Third Quarter 2018 Results
Net sales for the third quarter 2018 increased 9.3% to $1.88 billion from $1.72 billion in the third quarter of 2017. Comparable store sales increased 5.1%, as compared to an increase of 6.6% in the prior year’s third quarter. The comparable store sales results included increases in comparable average ticket of 3.6% and comparable transaction count of 1.4%. 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 8.8% to $653.1 million from $600.5 million in the prior year’s third quarter, and gross margin decreased 16 basis points to 34.7% from 34.9% in the prior year’s third quarter. The slight decline in gross margin resulted primarily from an increase in freight expense due to higher carrier rates and increased diesel fuel prices, partially offset by the strength of the Company’s price management program.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 10.6% to $500.0 million from $452.2 million in the prior year’s third quarter. As a percent of net sales, SG&A expenses increased 31 basis points to 26.6% from 26.3% in the third 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, along with planned investments across infrastructure, labor wages 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 21.5% compared to 36.4% in the prior year’s third 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 and, to a lesser extent, an incremental tax benefit associated with share-based compensation compared to the third quarter of 2017.
Net income increased 27.1% to $116.8 million from $91.9 million and diluted earnings per share increased 31.9% to $0.95 from $0.72 in the third quarter of 2017.
The Company opened 23 new Tractor Supply stores and seven new Petsense stores in the third quarter of 2018.
First Nine Months of Fiscal 2018 Results
Net sales for the first nine months of 2018 increased 8.9% to $5.78 billion from $5.30 billion in the first nine months of 2017. Comparable store sales increased 4.9% versus a 2.2% increase in the first nine months of 2017. Gross profit increased 8.9% to $1.99 billion from $1.82 billion and gross margin was 34.4%, consistent with the first nine months of 2017.
SG&A expenses, including depreciation and amortization, increased 10.9% to $1.46 billion and increased as a percent of net sales to 25.4% compared to 24.9% for the first nine months of 2017.
The effective income tax rate was 22.1% compared to 36.5% in the first nine months of 2017.
Net income increased 26.4% to $395.5 million from $312.9 million and diluted earnings per share increased 31.7% to $3.20 from $2.43 for the first nine months of 2017.
Year to date through the third quarter, the Company has repurchased approximately 4.3 million shares of its common stock for $289.2 million and paid quarterly cash dividends totaling $109.2 million.
During the first nine months of 2018, the Company opened 63 new Tractor Supply stores and 14 new Petsense stores and closed one Petsense store.
Press Release | Tractor Supply Company
