Tractor Supply sales move ahead in Q3
Results for Tractor Supply Company's third quarter were mixed given sales that were softer than expected, according to CEO and President Hal Lawton.
The farm and ranch retailer reported third quarter net sales increased 4.3% to $3.41 billion from sales of $3.27 billion in the third quarter 2022.
But comparable store sales fell slightly by 0.4% for the period after increasing 5.7% in the prior third quarter.
The Brentwood, Tennessee-based company said the increase in net sales was driven by contributions from the acquisition of Orscheln Farm and Home, which occurred last year, along with new store openings.
The retailer’s average comp ticket saw a decline of 0.3% for the quarter and a flat comparable average transaction count.
Tractor Supply posted a net income of $255 million for the third quarter, increasing 8.9% from a net income of $234.1 million in the third quarter 2022. The company’s operating income increased 11.3% to $340.9 million from $306.4 million in the third quarter of 2022.
Citing possible unfavorable category performance and tighter-than-expected consumer spending, Tractor Supply has revised its outlook for 2023.
The company’s updated outlook includes 2023 sales ranging between $14.5 billion and $14.6 billion compared to previous expectations of sales between $14.8 billion and $14.9 billion.
Tractor Supply has also revised its projected comp sales to be flat for the year versus a prior forecast of 1.3% to 2.5% growth. The company also expects its year-end net income to rage between $1.10 billion and $1.11 billion after previously forecasting earnings of $1.12 billion to $1.15 billion.
With the retailer approaching its 85th anniversary, it opened 17 new Tractor Supply stores and four new Petsense by Tractor Supply stores in the third quarter and closed one Petsense by Tractor Supply store.
Additionally, more than 420 stores received the addition of new garden centers during the quarter. Also during the period, Tractor Supply completed the planned sale-leaseback of 10 stores.
As of Sept. 30 the retailer operated 2,198 Tractor Supply stores in 49 states, including 81 stores acquired from Orscheln Farm and Home in 2022 that will be rebranded to Tractor Supply by the end of 2023. Tractor Supply Company also owns and operates 195 Petsense by Tractor Supply stores in 23 ,.
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The Bottom Line: Profits at Tractor Supply move ahead nearly 9% for the quarter as 4.3% increase.
What the CEO said: “We delivered solid growth in both net sales and earnings in the third quarter, although our sales performance was softer than our expectations. Given this environment, we have updated our outlook for the year to reflect continued unfavorable seasonal category performance and discerning consumer spending.” said Hal Lawton, CEO and president of Tractor Supply Company.
“As we near Tractor Supply’s 85th anniversary in December, it serves as a great reminder that we have a long track record of success as a resilient, needs-based retailer. We are committed to continuing to adapt to the current consumer landscape and controlling what we can control. We also remain committed to executing our Life Out Here strategy and laying the foundation for the next 85 years. We believe we have a robust, distinct business model in an attractive market that will continue to be a winning formula.”
Company info: Click here to read the full third quarter 2023 financial report from Tractor Supply Company.
