Tractor Supply shows gains, despite headwinds

Tractor Supply Company is feeling the effects of the depressed economic conditions in the energy producing and agricultural markets, but the retailer still grew net sales and net income in the third quarter.

The nation’s largest farm and ranch retailer reported third quarter net sales of $1.54 billion, up 4.5% from $1.48 billion in the same quarter last year. Net income increased 2.4% to $89.4 million.

Comparable store sales declined 0.6%, while comparable average ticket decreased 1.1%.

The official word from CEO Greg Sandfort suggests that the company is not losing market share.

"Our third quarter sales performance was significantly influenced by economic headwinds in our energy and agricultural markets and lower pre-season demand for cold weather and heating products,” Sandfort said. “We do not believe the current trends are the result of significant changes in the competitive landscape or market share. During this more challenging environment, our teams are focused on driving sales and managing controllable items such as inventory and expenses. Over the long-term, we remain focused on enhancing our merchandise offerings, systems, people and processes to better meet the evolving needs of our customers, drive profitable growth and return value to our shareholders."

On a category basis, the company said it continued to see strong demand for many everyday basic items, with the Livestock and Pet category generating a mid-single digit comparable store sales increase.

Tractor Supply announced the acquisition of 136-store Petsense last month.

The company opened 34 new stores and closed one store, a Del's store, in the third quarter of 2016 compared to 30 new store openings and three store closures, two of which were Del's stores, in the prior year period.