Tractor Supply off to strong start in Q1; 90 new stores, 150 to 200 remodels on tap

Tractor Supply Co. reported better-than-expected first-quarter earnings and sales amid a “record” performance and raised its guidance for the year.

The nation’s largest rural lifestyle retailer expects approximately 80 new Tractor Supply and 10 new Petsense store openings in its current fiscal year. The company also plans 150 to 200 “project fusion” remodels of existing locations.

“Our Project Fusion remodel program is designed to drive space productivity, and to enhance the customer experience in our mature store base,” Tractor Supply president and CEO Hal Lawton explained on the company’s earnings call in December. “It is a combination of both changes in the store layout and imagery that creates a greater lifestyle impression, and drives space allocation for product assortment. Fusion stores help create a more welcoming destination and offer a compelling showcase for our brands.”

In addition, Tractor Supply will execute 150 to 200 “side lot” transformations. The side lot program involves a full transformation of the space, from primarily a storage location for agriculture equipment to a state-of-the-art outside garden, feed and farm shopping center. It also allows for expanded buy-online-pickup-in-store capabilities. 

The retailer reported net income of $181.4 million, or $1.55 per share, for the quarter ended March 27, up from $83.8 million, or $0.71 per share, for the year-ago period. Analysts had expected earnings per share of $0.98.

Net sales jumped 42.5% to $2.79 billion, also beating estimates, from $1.96 billion in the first quarter of 2020. Comparable sales increased 38.%, with an increase in comparable average transaction count and ticket of 21.0% and 17.6%, respectively.

In addition, e-commerce sales experienced triple-digit percentage growth for the fourth consecutive quarter. 

“The Tractor Supply team delivered an exceptionally strong start to the year, and our comparable store sales growth exceeded our expectations,” Lawton. “This record performance was achieved by the more than 42,000 Tractor Supply Team Members who are committed to taking care of each other and our customers as the dependable supplier of the Out Here lifestyle.”

The company said it raised its financial outlook for the year based on its strong performance in the first quarter, “the positive macro factors and robust customer retention trends.”

“We believe our resilient business model with a differentiated and loyal customer base, our strategic investments to capture growth opportunities and the strength of our balance sheet position us to capitalize on the momentum in our business in 2021 and beyond,” said Lawton. 

Tractor Supply expects earnings per share of $7.05 to $7.40 for 2021, up from its previous guidance for $6.50 to $6.90. Sales are expected to be $11.4 billion to $11.7 billion, up from $10.7 billion to $11.0 billion previously. 

Tractor Supply ended its fiscal year current cash and cash equivalents of approximately $1.15 billion and no amounts drawn on its $500 million revolving credit facility.  

As of March 27, 2021, the company operated 1,944 Tractor Supply stores in 49 states and 177 Petsense stores in 23 states. (Petsense is a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of products and services.)