Tractor Supply digs up profitable Q1

Brentwood, Tennessee-based rural lifestyle chain Tractor Supply Company saw net income, net sales and same-store sales all rise in the first quarter of fiscal 2016, compared to the prior-year period.



Net income increased 17% to $67.7 million from $58 million, despite a 10% increase in selling, general and administrative (SG&A) expenses to $386.2 million from $351.8 million. Higher gross profit and pretax income helped boost net income.



Net sales increased 10% to $1.47 billion from $1.33 billion, and same-store sales increased 4.9%. The increase in same-store sales was driven by an increase in both traffic and ticket, with same-store transaction count increasing 4.2% and average ticket increasing 0.7%.



Sales were broad-based, with all of Tractor Supply’s major product categories and geographic regions generating positive same-store sales. Solid performance in consumable, usable and edible (C.U.E.) products, specifically pet and livestock consumables, benefited sales. Seasonal products including lawn and garden, riding lawn mowers and fencing also performed very well, driven in part by early spring weather in first quarter 2016.



“We know the seasons and weather can influence the timing of when our customers buy certain products, but we also know it is our job to manage the business accordingly,” said Greg Sandfort, president and CEO. “Once again, the team did an excellent job and we believe our first quarter results demonstrate the resiliency of our business model."



Looking ahead, Sandfort said the spring selling season will be very important to Tractor Supply’s first-half performance. For full fiscal year 2016, the retailer expects net income of $455 million - $467 million, net sales of $6.9 billion - 7 billion, and same-store sales growth of 3.5% - 5%.