Tractor Supply continues strong performance in Q2; raises guidance

Tractor Supply Co. beat analyst expectations for same-store sales in the second quarter of fiscal 2021, and is increasing its guidance for the full fiscal year.

The largest rural lifestyle retailer in the U.S. increased net sales 13.4% to $3.6 billion from $3.18 billion in the second quarter of fiscal 2020. Net income increased 9.3% to $370 million from $338.7 million in the second quarter of 2020, and diluted earnings per share increased 10% to $3.19 from $2.90 in the prior year’s second quarter.

Same-store sales increased 10.5%, driven by comparable transaction count and comparable average ticket growth of 4.5% and 6%. Analyst consensus had been for a 1.9% same-store sales decline.

According to Tractor Supply Co., the increase in same-store sales was driven by robust growth in everyday merchandise, including consumable, usable and edible (“C.U.E.”) products, and solid demand for spring and summer seasonal categories. All geographic regions and major merchandising categories of the company reported same-store sales growth. In addition, the company experienced a record sales quarter in its e-commerce business.

During the second quarter of 2021, the company opened 11 new Tractor Supply stores and one new Petsense store, and closed four Petsense stores. During the first six months of 2021, the company opened 32 new Tractor Supply stores and three new Petsense stores and closed 11 Petsense stores. Tractor Supply still expects to open approximately 80 new Tractor Supply and 10 new Petsense store openings in its current fiscal year.

Tractor Supply updated its guidance for fiscal 2021 based on its latest encouraging quarter. The company updated net sales guidance to a range of $12.1 billion - $12.3 billion from $11.4 billion - $11.7 billion. Net income expectations have been raised to $895 million - $930 million from $820 million - $860 million, and earnings per diluted share are now projected to be $7.70 - $8.00, up from $7.05 to $7.40. Same-store sales growth guidance is now +11% - +13%, up from +5% - +8%.

Tractor Supply’s outlook for fiscal 2021 does not contemplate the impact of the pending acquisition of Orscheln Farm and Home previously announced on February 17, 2021.

“For both the second quarter and first half of the year, the Tractor Supply team delivered exceptionally strong performance as we successfully managed through challenging comparisons from the prior year,” said Hal Lawton, Tractor Supply Co. president and CEO. “We are increasing our earnings guidance given our strong results and the outlook for our customer trends and ongoing market share gains. With a resilient business model, ongoing market share growth and strategic investments to transform the company, we are excited about the significant opportunities ahead of us and remain committed to disciplined financial returns and sustained profitable growth.”