Tractor Supply Company (NASDAQ: TSCO), the largest
rural lifestyle retailer in the United States, today announced
financial results for its third quarter ended September 28, 2019.
“Tractor Supply once again delivered strong
results in the third quarter, driven by the strength of our team’s
execution and their ability to be nimble through varying seasonal
conditions. Our solid comparable store sales growth of 2.9%
for the third quarter was in line with our expectations, with
improvements in both our comparable average ticket and transaction
count. Importantly, our operating profit margin improved in
the third quarter through gross margin expansion initiatives.
We have updated our full year guidance for 2019 and are on track to
deliver against our commitments. We remain excited about the
opportunities ahead to meet our customers’ needs and deliver
increased value for our shareholders,” said Greg Sandfort, Tractor
Supply’s Chief Executive Officer.
Third Quarter 2019 ResultsNet
sales for the third quarter 2019 increased 5.4% to $1.98 billion
from $1.88 billion in the third quarter of 2018. Comparable
store sales increased 2.9%, as compared to an increase of 5.1% in
the prior year’s third quarter. The comparable store sales
results included increases in comparable average ticket of 2.3% and
comparable transaction count of 0.6%. Comparable store sales
growth was geographically broad-based, driven primarily by strength
in everyday merchandise, along with growth across spring and summer
seasonal categories.
Gross profit increased 6.3% to $694.2 million
from $653.1 million in the prior year’s third quarter, and gross
margin increased 28 basis points to 35.0% from 34.7% in the prior
year’s third quarter. The increase in gross margin resulted
primarily from the strength of the Company’s price management
program and a reduction in freight expense as a percent of net
sales.
Selling, general and administrative (SG&A)
expenses, including depreciation and amortization, increased 6.5%
to $532.4 million from $500.0 million in the prior year’s third
quarter. As a percent of net sales, SG&A expenses
increased 26 basis points to 26.8% from 26.6% in the third quarter
of 2018. The increase in SG&A as a percent of net sales
was primarily attributable to incremental costs associated with the
new distribution facility in Frankfort, N.Y., an executive
transition agreement and, to a lesser extent, investment in store
team member wages. These SG&A increases were partially
offset by lower year-over-year incentive compensation as a
percentage of net sales, as well as leverage in occupancy and other
costs from the increase in comparable store sales. The impact
of the executive transition agreement in the third quarter of 2019
was approximately $2.9 million or 15 basis points, as a percent of
net sales. Excluding the impact of the executive transition
agreement, adjusted SG&A expenses were $529.5 million, an 11
basis point increase in SG&A expenses as a percent of net sales
compared to the third quarter of 2018.
The effective income tax rate in the third
quarter was 22.2% compared to 21.5% in the prior year’s third
quarter.
Net income increased 4.6% to $122.1 million from
$116.8 million, and diluted earnings per share increased 7.4% to
$1.02 from $0.95 in the third quarter of 2018. Excluding the
after-tax impact of the executive transition agreement of
approximately $2.3 million, or $0.02 per diluted share, adjusted
net income for the third quarter of 2019 was $124.4 million, or
$1.04 per diluted share.
The Company opened 25 new Tractor Supply stores
and one new Petsense store and closed one Tractor Supply store and
two Petsense stores in the third quarter of 2019.
First Nine Months of Fiscal 2019
ResultsNet sales for the first nine months of 2019
increased 6.6% to $6.16 billion from $5.78 billion in the first
nine months of 2018. Comparable store sales increased 3.6%
versus a 4.9% increase in the first nine months of 2018.
Gross profit increased 7.2% to $2.13 billion from $1.99
billion, and gross margin was 34.6%, compared to 34.4% in the first
nine months of 2018.
SG&A expenses, including depreciation and
amortization, increased 7.7% to $1.58 billion and increased as a
percent of net sales to 25.6% compared to 25.4% for the first nine
months of 2018. Adjusted SG&A expenses as a percent of
net sales for the first nine months of 2019, which excludes the
impact of the executive transition agreement, were also
25.6%.
The effective income tax rate in the first nine
months was 22.2% compared to 22.1% in the first nine months of
2018.
Net income increased 5.7% to $418.2 million from
$395.5 million, and diluted earnings per share increased 7.8% to
$3.45 from $3.20 for the first nine months of 2018. Excluding
the after-tax impact of the executive transition agreement of
approximately $2.3 million, or $0.02 per diluted share, adjusted
net income for the first nine months of 2019 was $420.5 million, or
$3.47 per diluted share.
Year to date through the third quarter, the
Company has repurchased approximately 4.9 million shares of its
common stock for $490.0 million and paid quarterly cash dividends
totaling $121.2 million.
During the first nine months of 2019, the
Company opened 50 new Tractor Supply stores and three new Petsense
stores and closed one Tractor Supply store and two Petsense
stores.
Fiscal 2019 OutlookBased on
year-to-date performance, the Company is providing the following
updated guidance for the expected results of operations in fiscal
2019:
- Net sales of $8.40 billion to $8.42
billion, compared to its previous expectation of $8.40 billion to
$8.46 billion
- Comparable store sales growth of 3.2%
to 3.4%, compared to its previous expectation of 3.0% to 4.0%
- Operating margin rate of 8.9% to 9.0%,
consistent with its previous guidance
- Net income of $564 million to $569
million, compared to its previous guidance of $562 million to $575
million
- Adjusted net income of $566 million to
$571 million, which excludes the after-tax impact of the executive
transition agreement
- Earnings per diluted share of $4.66 to
$4.70, compared to its previous guidance of $4.65 to $4.75
- Adjusted earnings per diluted share of
$4.68 to $4.72, which excludes the after-tax impact of the
executive transition agreement
Share repurchases for fiscal 2019 are expected
to be approximately $525 million to $550 million, compared to the
Company’s previous guidance of $350 million to $450 million.
Weighted average diluted shares outstanding for fiscal 2019
are forecasted to be approximately 121 million.
For fiscal 2019, the Company continues to
forecast capital expenditures in the range of $225 million to $250
million and plans to open approximately 80 new Tractor Supply
stores and 10 new Petsense locations.
Conference Call
InformationTractor Supply Company will be hosting a
conference call today, Thursday, October 24, 2019, at 9:00 a.m. CT
/ 10:00 a.m. ET, hosted by Greg Sandfort, Chief Executive Officer,
and Kurt Barton, Chief Financial Officer. The call will be
webcast live at IR.TractorSupply.com.
The call will be broadcast simultaneously over
the Internet on the Company’s website at
IR.TractorSupply.com. Please allow extra time prior to the
call to visit the site and download the streaming media software
required to listen to the Internet broadcast. A replay of the
webcast will also be available at IR.TractorSupply.com shortly
after the conference call concludes.
About Tractor Supply
CompanyTractor Supply Company (NASDAQ: TSCO), the largest
rural lifestyle retailer in the United States, has been passionate
about serving its unique niche, as a one-stop shop for recreational
farmers, ranchers and all those who enjoy living the rural
lifestyle, for more than 80 years. Tractor Supply offers an
extensive mix of products necessary to care for home, land, pets
and animals with a focus on product localization, exclusive brands
and legendary customer service that addresses the needs of the Out
Here lifestyle. With nearly 32,000 team members, the Company
leverages its physical store assets with digital capabilities to
offer customers the convenience of purchasing products they need
anytime, anywhere and any way they choose at the everyday low
prices they deserve. At September 28, 2019, the Company
operated 1,814 Tractor Supply stores in 49 states and an e-commerce
website at www.TractorSupply.com.
Tractor Supply Company also owns and operates
Petsense, 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 pet products and services.
At September 28, 2019, the Company operated 176 Petsense
stores in 26 states. For more information on Petsense, visit
www.Petsense.com.
Tractor Supply CompanyContacts:Mary Winn
Pilkington (615) 440-4212Marianne Denenberg (615) 440-4345
Forward Looking StatementsAs
with any business, all phases of the Company’s operations are
subject to influences outside its control. This information
contains certain forward-looking statements, including statements
regarding sales and earnings growth, estimated results of
operations, including, but not limited to, net sales, operating
margins, net income, earnings per share and comparable store sales,
and capital expenditures. Other factors affecting future
results include the amount of share repurchases, marketing,
merchandising and strategic initiatives and new store and
distribution center openings and expenses in future periods.
These forward-looking statements are subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and are subject to the finalization of the Company’s quarterly
financial and accounting procedures, and may be affected by certain
risks and uncertainties, any one, or a combination, of which could
materially affect the results of the Company’s operations.
These factors include, without limitation, national, regional and
local economic conditions affecting consumer spending, the timing
and acceptance of new products in the stores, the timing and mix of
goods sold, weather conditions, the seasonal nature of the
business, transportation costs, including but not limited to,
carrier rates and fuel costs, purchase price volatility (including
inflationary and deflationary pressures), the ability to increase
sales at existing stores, the ability to manage growth and identify
suitable locations, failure of an acquisition to produce
anticipated results, the ability to successfully manage expenses,
including but not limited to, increases in wages, and execute key
gross margin enhancing initiatives, the availability of favorable
credit sources, capital market conditions in general, the ability
to open new stores in the manner and number currently contemplated,
the impact of new stores on the business, competition, including
competition from online retailers, effective merchandising
initiatives and marketing emphasis, the ability to retain vendors,
reliance on foreign suppliers, the ability to attract, train and
retain qualified employees, product liability and other claims,
changes in federal, state or local regulations, potential
judgments, fines, legal fees and other costs, breach of information
systems or theft of employee or customer data, ongoing and
potential future legal or regulatory proceedings, management of the
Company’s information systems, failure to develop and implement new
technologies, the failure of customer-facing technology systems,
business disruption including from the implementation of supply
chain technologies, effective tax rate changes, including expected
effects of the Tax Cuts and Jobs Act, and results of examination by
taxing authorities, the imposition of tariffs on imported products
or the disallowance of tax deductions on imported products, the
ability to maintain an effective system of internal control over
financial reporting, and changes in accounting standards,
assumptions and estimates. Forward-looking statements made by
or on behalf of the Company are based on knowledge of its business
and the environment in which it operates, but because of the
factors listed above, actual results could differ materially from
those reflected by any forward-looking statements.
Consequently, all of the forward-looking statements made are
qualified by these cautionary statements and those contained in the
Company’s Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. There can be no assurance
that the results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have
the expected consequences to or effects on the Company or its
business and operations. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company does not undertake
any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated
events.
(Financial tables to follow)
|
|
|
|
Condensed Consolidated Statements of
Income(Unaudited)(in thousands,
except per share amounts) |
|
|
|
|
|
THIRD QUARTER ENDED |
|
NINE MONTHS ENDED |
|
September 28, 2019 |
|
September 29, 2018 |
|
September 28, 2019 |
|
September 29, 2018 |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
|
|
Net |
|
|
|
Net |
|
|
|
Net |
|
|
|
Net |
|
|
|
Sales |
|
|
|
Sales |
|
|
|
Sales |
|
|
|
Sales |
Net sales |
$ |
1,984,144 |
|
|
100.00 |
% |
|
$ |
1,881,625 |
|
|
100.00 |
% |
|
$ |
6,160,146 |
|
|
100.00 |
% |
|
$ |
5,777,775 |
|
|
100.00 |
% |
Cost of merchandise sold |
1,289,904 |
|
|
65.01 |
|
|
1,228,493 |
|
|
65.29 |
|
|
4,030,177 |
|
|
65.42 |
|
|
3,791,580 |
|
|
65.62 |
|
Gross
profit |
694,240 |
|
|
34.99 |
|
|
653,132 |
|
|
34.71 |
|
|
2,129,969 |
|
|
34.58 |
|
|
1,986,195 |
|
|
34.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
482,604 |
|
|
24.32 |
|
|
454,998 |
|
|
24.18 |
|
|
1,432,603 |
|
|
23.26 |
|
|
1,333,457 |
|
|
23.08 |
|
Depreciation and
amortization |
49,819 |
|
|
2.51 |
|
|
44,986 |
|
|
2.39 |
|
|
144,584 |
|
|
2.35 |
|
|
131,383 |
|
|
2.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
161,817 |
|
|
8.16 |
|
|
153,148 |
|
|
8.14 |
|
|
552,782 |
|
|
8.97 |
|
|
521,355 |
|
|
9.03 |
|
Interest expense, net |
4,900 |
|
|
0.25 |
|
|
4,460 |
|
|
0.24 |
|
|
15,006 |
|
|
0.24 |
|
|
13,906 |
|
|
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
156,917 |
|
|
7.91 |
|
|
148,688 |
|
|
7.90 |
|
|
537,776 |
|
|
8.73 |
|
|
507,449 |
|
|
8.79 |
|
Income tax expense |
34,784 |
|
|
1.75 |
|
|
31,904 |
|
|
1.70 |
|
|
119,601 |
|
|
1.94 |
|
|
111,943 |
|
|
1.94 |
|
Net
income |
$ |
122,133 |
|
|
6.16 |
% |
|
$ |
116,784 |
|
|
6.20 |
% |
|
$ |
418,175 |
|
|
6.79 |
% |
|
$ |
395,506 |
|
|
6.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.03 |
|
|
|
|
$ |
0.96 |
|
|
|
|
$ |
3.48 |
|
|
|
|
$ |
3.22 |
|
|
|
Diluted |
$ |
1.02 |
|
|
|
|
$ |
0.95 |
|
|
|
|
$ |
3.45 |
|
|
|
|
$ |
3.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
118,956 |
|
|
|
|
121,876 |
|
|
|
|
120,180 |
|
|
|
|
122,818 |
|
|
|
Diluted |
120,058 |
|
|
|
|
122,761 |
|
|
|
|
121,239 |
|
|
|
|
123,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share outstanding |
$ |
0.35 |
|
|
|
|
$ |
0.31 |
|
|
|
|
$ |
1.01 |
|
|
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive
Income(Unaudited)(in
thousands) |
|
|
|
|
|
THIRD QUARTER ENDED |
|
NINE MONTHS ENDED |
|
September 28,2019 |
|
September 29,2018 |
|
September 28,2019 |
|
September 29,2018 |
Net income |
$ |
122,133 |
|
|
$ |
116,784 |
|
|
$ |
418,175 |
|
|
$ |
395,506 |
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss)/income: |
|
|
|
|
|
|
|
Change in fair value of interest rate swaps, net of taxes |
(809 |
) |
|
227 |
|
|
(4,458 |
) |
|
2,611 |
|
Total other comprehensive
(loss)/income |
(809 |
) |
|
227 |
|
|
(4,458 |
) |
|
2,611 |
|
Total comprehensive
income |
$ |
121,324 |
|
|
$ |
117,011 |
|
|
$ |
413,717 |
|
|
$ |
398,117 |
|
|
|
|
|
Condensed Consolidated Balance
Sheets(Unaudited)(in
thousands) |
|
|
|
|
|
September 28, 2019 |
|
September 29, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
82,640 |
|
|
$ |
71,302 |
|
Inventories |
1,812,772 |
|
|
1,737,273 |
|
Prepaid expenses and other current assets |
104,486 |
|
|
109,478 |
|
Income taxes receivable |
5,600 |
|
|
23,655 |
|
Total current assets |
2,005,498 |
|
|
1,941,708 |
|
|
|
|
|
Property and equipment,
net |
1,143,071 |
|
|
1,112,049 |
|
Operating lease right-of-use
assets |
2,133,238 |
|
|
— |
|
Goodwill and other intangible
assets |
124,492 |
|
|
124,492 |
|
Deferred income taxes |
— |
|
|
13,485 |
|
Other assets |
22,997 |
|
|
29,200 |
|
Total assets |
$ |
5,429,296 |
|
|
$ |
3,220,934 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
679,791 |
|
|
$ |
683,672 |
|
Accrued employee compensation |
49,236 |
|
|
51,673 |
|
Other accrued expenses |
218,774 |
|
|
209,199 |
|
Current portion of long-term debt |
30,000 |
|
|
26,250 |
|
Current portion of finance lease liabilities |
3,884 |
|
|
3,747 |
|
Current portion of operating lease liabilities |
270,038 |
|
|
— |
|
Total current liabilities |
1,251,723 |
|
|
974,541 |
|
|
|
|
|
Long-term debt |
613,885 |
|
|
547,505 |
|
Finance lease liabilities,
less current portion |
29,174 |
|
|
29,690 |
|
Operating lease liabilities,
less current portion |
1,966,363 |
|
|
— |
|
Deferred income taxes |
1,888 |
|
|
— |
|
Deferred rent |
— |
|
|
108,487 |
|
Other long-term
liabilities |
74,441 |
|
|
65,414 |
|
Total liabilities |
3,937,474 |
|
|
1,725,637 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock |
1,388 |
|
|
1,372 |
|
Additional paid-in capital |
950,908 |
|
|
793,090 |
|
Treasury stock |
(2,970,654 |
) |
|
(2,420,106 |
) |
Accumulated other comprehensive income |
73 |
|
|
5,969 |
|
Retained earnings |
3,510,107 |
|
|
3,114,972 |
|
Total stockholders’ equity |
1,491,822 |
|
|
1,495,297 |
|
Total liabilities and stockholders’ equity |
$ |
5,429,296 |
|
|
$ |
3,220,934 |
|
|
|
Condensed Consolidated Statements of Cash
Flows(Unaudited)(in
thousands) |
|
|
|
NINE MONTHS ENDED |
|
September 28,2019 |
|
September 29,2018 |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
418,175 |
|
|
$ |
395,506 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization |
144,584 |
|
|
131,383 |
|
Gain on disposition of property and equipment |
(262 |
) |
|
(285 |
) |
Share-based compensation expense |
25,755 |
|
|
22,787 |
|
Deferred income taxes |
8,495 |
|
|
5,009 |
|
Change in assets and liabilities: |
|
|
|
Inventories |
(223,230 |
) |
|
(284,065 |
) |
Prepaid expenses and other current assets |
9,961 |
|
|
(21,226 |
) |
Accounts payable |
59,810 |
|
|
107,104 |
|
Accrued employee compensation |
(4,810 |
) |
|
20,000 |
|
Other accrued expenses |
(21,622 |
) |
|
667 |
|
Income taxes |
(3,257 |
) |
|
(29,667 |
) |
Other |
728 |
|
|
6,206 |
|
Net cash provided by operating activities |
414,327 |
|
|
353,419 |
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(144,342 |
) |
|
(193,693 |
) |
Proceeds from sale of property and equipment |
2,317 |
|
|
2,029 |
|
Net cash used in investing activities |
(142,025 |
) |
|
(191,664 |
) |
Cash flows from
financing activities: |
|
|
|
Borrowings under debt facilities |
947,000 |
|
|
968,500 |
|
Repayments under debt facilities |
(710,750 |
) |
|
(820,750 |
) |
Debt issuance costs |
— |
|
|
(346 |
) |
Principal payments under finance lease liabilities |
(2,741 |
) |
|
(2,725 |
) |
Repurchase of shares to satisfy tax obligations |
(3,790 |
) |
|
(622 |
) |
Repurchase of common stock |
(489,977 |
) |
|
(289,205 |
) |
Net proceeds from issuance of common stock |
105,543 |
|
|
54,706 |
|
Cash dividends paid to stockholders |
(121,246 |
) |
|
(109,159 |
) |
Net cash used in financing activities |
(275,961 |
) |
|
(199,601 |
) |
Net change in cash and
cash equivalents |
(3,659 |
) |
|
(37,846 |
) |
Cash and cash equivalents at
beginning of period |
86,299 |
|
|
109,148 |
|
Cash and cash equivalents at
end of period |
$ |
82,640 |
|
|
$ |
71,302 |
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
Cash paid during the period
for: |
|
|
|
Interest |
$ |
15,189 |
|
|
$ |
15,445 |
|
Income taxes |
112,693 |
|
|
137,041 |
|
|
|
|
|
Supplemental
disclosures of non-cash activities: |
|
|
|
Non-cash accruals for construction in progress |
$ |
10,981 |
|
|
$ |
15,521 |
|
Operating lease assets and liabilities recognized upon adoption of
ASC 842 |
2,084,880 |
|
|
— |
|
Increase of operating lease assets and liabilities from new or
modified leases |
240,969 |
|
|
— |
|
Increase of finance lease assets and liabilities from new or
modified leases |
2,883 |
|
|
— |
|
|
|
|
|
|
Selected Financial and Operating
Information(Unaudited) |
|
|
|
|
|
|
|
THIRD QUARTER ENDED |
|
NINE MONTHS ENDED |
|
|
September 28,2019 |
|
September 29,2018 |
|
September 28,2019 |
|
September 29,2018 |
Sales Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales
increase |
|
|
2.9 |
% |
|
|
5.1 |
% |
|
|
3.6 |
% |
|
|
4.9 |
% |
New store sales (% of total
sales) |
|
|
2.5 |
% |
|
|
4.0 |
% |
|
|
2.9 |
% |
|
|
4.0 |
% |
Average transaction value |
|
$ |
45.97 |
|
|
$ |
44.96 |
|
|
$ |
46.56 |
|
|
$ |
45.43 |
|
Comparable store average
transaction value increase |
|
|
2.3 |
% |
|
|
3.6 |
% |
|
|
2.5 |
% |
|
|
2.7 |
% |
Comparable store average
transaction count increase |
|
|
0.6 |
% |
|
|
1.4 |
% |
|
|
1.1 |
% |
|
|
2.1 |
% |
Total selling square footage
(000’s) |
|
|
30,344 |
|
|
|
29,333 |
|
|
|
30,344 |
|
|
|
29,333 |
|
Exclusive brands (% of total
sales) |
|
|
30.8 |
% |
|
|
31.5 |
% |
|
|
31.1 |
% |
|
|
31.4 |
% |
Imports (% of total
sales) |
|
|
10.5 |
% |
|
|
11.0 |
% |
|
|
11.3 |
% |
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Count Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tractor Supply |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
1,790 |
|
|
|
1,725 |
|
|
|
1,765 |
|
|
|
1,685 |
|
New stores opened |
|
|
25 |
|
|
|
23 |
|
|
|
50 |
|
|
|
63 |
|
Stores closed |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
End of period |
|
|
1,814 |
|
|
|
1,748 |
|
|
|
1,814 |
|
|
|
1,748 |
|
Petsense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
177 |
|
|
|
174 |
|
|
|
175 |
|
|
|
168 |
|
New stores opened |
|
|
1 |
|
|
|
7 |
|
|
|
3 |
|
|
|
14 |
|
Stores closed |
|
|
(2 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(1 |
) |
End of period |
|
|
176 |
|
|
|
181 |
|
|
|
176 |
|
|
|
181 |
|
Consolidated end of
period |
|
|
1,990 |
|
|
|
1,929 |
|
|
|
1,990 |
|
|
|
1,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-opening costs (000’s) |
|
$ |
2,614 |
|
|
$ |
2,826 |
|
|
$ |
5,258 |
|
|
$ |
7,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average inventory per store
(000’s) (a) |
|
$ |
850.3 |
|
|
$ |
828.2 |
|
|
$ |
850.3 |
|
|
$ |
828.2 |
|
Inventory turns
(annualized) |
|
|
3.08 |
|
|
|
3.12 |
|
|
|
3.17 |
|
|
|
3.19 |
|
Share repurchase program: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost (000’s) |
|
$ |
155,742 |
|
|
$ |
36,660 |
|
|
$ |
489,977 |
|
|
$ |
289,205 |
|
Average purchase price per share |
|
$ |
105.97 |
|
|
$ |
81.23 |
|
|
$ |
99.46 |
|
|
$ |
67.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
(in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information technology |
|
$ |
30.9 |
|
|
$ |
23.9 |
|
|
$ |
66.5 |
|
|
$ |
62.4 |
|
New and relocated stores and
stores not yet opened |
|
|
16.3 |
|
|
|
19.3 |
|
|
|
38.6 |
|
|
|
52.1 |
|
Existing stores |
|
|
10.5 |
|
|
|
14.3 |
|
|
|
23.5 |
|
|
|
25.8 |
|
Distribution center capacity and improvements |
|
|
2.5 |
|
|
|
19.4 |
|
|
|
14.3 |
|
|
|
53.2 |
|
Corporate and other |
|
|
0.6 |
|
|
|
0.1 |
|
|
|
1.4 |
|
|
|
0.2 |
|
Total |
|
$ |
60.8 |
|
|
$ |
77.0 |
|
|
$ |
144.3 |
|
|
$ |
193.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Assumes average inventory cost, excluding inventory in
transit. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial
MeasuresTractor Supply reports its financial results in
accordance with accounting principles generally accepted in the
United States of America (U.S. GAAP). Tractor Supply also
uses certain non-GAAP measures that fall within the meaning of
Securities and Exchange Commission Regulation G and Regulation S-K
Item 10(e), which may provide users of the financial information
with additional meaningful comparison to prior reported
results. Non-GAAP measures do not have standardized
definitions and are not defined by U.S. GAAP. Therefore,
Tractor Supply’s non-GAAP measures are unlikely to be comparable to
similar measures presented by other companies. The
presentation of these non-GAAP measures should not be considered in
isolation from, as a substitute for, or as superior to the
financial information presented in accordance with U.S. GAAP.
We believe this information is useful in providing period-to-period
comparisons of the results of our continuing operations.
|
|
Reconciliation of Non-GAAP Financial
Measures(Unaudited)(in thousands,
except per share amounts) |
|
|
|
THIRD QUARTER ENDED |
|
September 28, 2019 |
|
Executive TransitionAgreement |
|
September 28, 2019 |
|
(As Reported) |
|
(Adjustment) |
|
(As Adjusted) |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
|
|
Net |
|
|
|
Net |
|
|
|
Net |
|
|
|
Sales |
|
|
|
Sales |
|
|
|
Sales |
Selling, general and administrative expenses |
$ |
482,604 |
|
|
24.32 |
% |
|
$ |
(2,942 |
) |
|
(0.15 |
)% |
|
$ |
479,662 |
|
|
24.17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
161,817 |
|
|
8.16 |
% |
|
$ |
2,942 |
|
|
0.15 |
% |
|
$ |
164,759 |
|
|
8.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
$ |
156,917 |
|
|
7.91 |
% |
|
$ |
2,942 |
|
|
0.15 |
% |
|
$ |
159,859 |
|
|
8.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
$ |
34,784 |
|
|
1.75 |
% |
|
$ |
652 |
|
|
0.03 |
% |
|
$ |
35,436 |
|
|
1.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
122,133 |
|
|
6.16 |
% |
|
$ |
2,290 |
|
|
0.12 |
% |
|
$ |
124,423 |
|
|
6.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share |
$ |
1.02 |
|
|
|
|
$ |
0.02 |
|
|
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE MONTHS ENDED |
|
September 28, 2019 |
|
Executive TransitionAgreement |
|
September 28, 2019 |
|
(As Reported) |
|
(Adjustment) |
|
(As Adjusted) |
|
|
|
% of |
|
|
|
% of |
|
|
|
% of |
|
|
|
Net |
|
|
|
Net |
|
|
|
Net |
|
|
|
Sales |
|
|
|
Sales |
|
|
|
Sales |
Selling, general and
administrative expenses |
$ |
1,432,603 |
|
|
23.26 |
% |
|
$ |
(2,942 |
) |
|
(0.05 |
)% |
|
$ |
1,429,661 |
|
|
23.21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
$ |
552,782 |
|
|
8.97 |
% |
|
$ |
2,942 |
|
|
0.05 |
% |
|
$ |
555,724 |
|
|
9.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
$ |
537,776 |
|
|
8.73 |
% |
|
$ |
2,942 |
|
|
0.05 |
% |
|
$ |
540,718 |
|
|
8.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
$ |
119,601 |
|
|
1.94 |
% |
|
$ |
652 |
|
|
0.01 |
% |
|
$ |
120,253 |
|
|
1.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
418,175 |
|
|
6.79 |
% |
|
$ |
2,290 |
|
|
0.04 |
% |
|
$ |
420,465 |
|
|
6.83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
share |
$ |
3.45 |
|
|
|
|
$ |
0.02 |
|
|
|
|
$ |
3.47 |
|
|
|
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