Tractor Supply Co. bullish on Q2; details new tech upgrades, employee benefits
Most retailers are withdrawing their second-quarter outlooks due to uncertainty caused by COVID-19. Not Tractor Supply Co., which said it expects record-breaking sales and earnings.
Following a strong first quarter, the nation’s largest rural lifestyle retailer said it expects second-quarter net sales growth of 24% to 29%, with a 20% to 25% increase in same-store sales. Tractor Supply, whose stores have remained open during the pandemic, forecast earnings per share of $2.45 to $2.65, topping Street expectations of $2.32.
Operating expenses for the second quarter will be at the high end of its previous guidance of $30 to $50 million, which Tractor Supply credited primarily to its response to the COVID-19 crisis.
Last month Tractor Supply reported that its first-quarter net sales increased 7.5% to $1.96 billion. Same-store sales were up 4.3% while net income rose 9% to $83.8 million.
“We have taken more than 100 actions in response to the COVID-19 pandemic with an emphasis on the health and safety of our team members and customers, while enhancing our capabilities to better serve the essential needs of our customers,” said president and CEO Hal Lawton. “Our outlook for record-breaking sales and earnings in the second quarter demonstrates the potential for Tractor Supply to emerge stronger than before as we continue to gain market share and build our business for the future. Today, we have a unique opportunity to grow our business as we roll out new technology and services while capitalizing on our product categories and convenient shopping format.”
Tractor Supply also announced that it would be unveiling a revamped website during the second quarter. The company said the new website is designed to position it for rapid digital growth by leveraging a modern web architecture including a docker and containerization strategy that will be enabled by Microsoft Azure, HCL, Redhat and SOLR.
“The new website will enhance and simplify the e-commerce journey for the customer and give Tractor Supply the ability to introduce new digital capabilities into the market much more quickly,” the company stated.
And for employees, the company will extend the $2-per-hour bonus for frontline workers through June 27 with managers getting incremental $1,000 bonuses, put a permanent wage increase of at least $1 into effect starting June 28, and give salaried managers at various levels annual restricted stock units.
In addition, Tractor Supply said it will launch its first mobile app in late June. The app will be built in a React Native open source mobile application framework that was initially created by Facebook.
“The benefit of the solution will support the ability to deploy a common code base across Android and iOS devices, which will allow Tractor Supply to improve its time to market with new capabilities,” the company explained.
The app features the company’s Neighbor’s Club loyalty program with a focus on personalized and more intuitive shopping experiences, including integration of contactless curbside pickup for buy online, pickup at store.
Tractor Supply has also announced wage increases for employees, including appreciation bonuses of $2 per hour for all frontline workers in stores and distribution centers. The increase will be continued through June 27 with store managers receiving an incremental $1,000 bonus.
Additionally, a permanent $1 per hour raise for all hourly employees at the company’s near 2,100 Tractor Supply and Petsense stores, along with its eight distribution centers, will go into effect on June 28. At the same time, more than 2,000 salaried managers will receive annual restricted stock units, Tractor Supply said.
A new benefit package is also being offered to part-time employees. It includes medical, vision, dental, paid sick time and life insurance.
In total, Tractor Supply said the benefit changes will be approximately $55 million in incremental compensation annually. Tractor Supply has about 33,000 employees.
At March 28, the company operated 1,863 Tractor Supply stores in 49 states and 180 Petsense stores in 26 states.