Tractor Supply Q2 sales miss forecast
Brentwood, Tenn. – Tractor Supply Co. reported sales for the second quarter of fiscal 2014 increased 8.8% to $1.58 billion, from $1.46 billion in second quarter 2013. This figure was slightly below consensus analyst estimates of $1.6 billion.
In an earnings update, Tractor Supply also reported that same-store sales increased a lower-than-anticipated 1.9%, driven by continued strength of consumable, usable and edible products (C.U.E.) and solid traffic counts. This was partially offset by weaker than expected sales of certain seasonal products primarily in the Northern regions, continued softness in the safe category and deflation. As the quarter progressed, sales trends improved and weather became less of a factor. The softness in sales was principally in the first half of the quarter with the second half being consistent with Tractor Supply’s expectations.
Tractor Supply expects second quarter net income to be below previous market estimates and also anticipates its fiscal year 2014 results will be at the low end of the previously provided guidance.
"We remain pleased with many areas of the business, including our core C.U.E. offerings and several seasonal categories; however, we were not satisfied with the overall sales of spring seasonal merchandise in the second quarter,” said Greg Sandfort, president and CEO. “The challenging spring weather conditions we experienced in the first quarter persisted even later into the second quarter than the prior year. The team responded by effectively managing inventory and increasing marketing initiatives to drive sales; and sales improved as the quarter progressed into June. Despite a solid sales trend in July to date, we cannot be assured at this point that spring seasonal sales will be fully realized. By effectively managing inventory levels and working with our vendors to develop additional sales driving initiatives, we believe we are positioned to drive sales and provide great values to our customers in the back half of the year."