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Company Overview
Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 2,233 of its namesake banners in 49 states, including 81 Orscheln Farm and Home stores (rebranded as Tractor Supply), along with 202 Petsense by Tractor Supply stores. Stores are generally concentrated in rural communities, as opposed to urban and suburban areas. In fiscal 2023, revenue consisted primarily of livestock, equine & agriculture (27%), companion animal (25%), and seasonal & recreation (22%).
Q2 2024 Financial Performance
Tractor Supply Co (TSCO, Financial) reported a net sales increase of 1.5% to $4.25 billion for the second quarter of 2024, compared to $4.18 billion in the same period last year. However, comparable store sales decreased by 0.5%, driven by a decline in the average transaction count by 0.6%, partially offset by a 0.1% increase in the average ticket.
Key Financial Metrics
Gross profit for the quarter increased by 2.7% to $1.56 billion, with a gross margin improvement of 43 basis points to 36.6%. This was primarily due to lower transportation costs and disciplined product cost management. However, SG&A expenses rose by 4.1% to $994.2 million, representing 23.4% of net sales, up from 22.8% in the prior year. This increase was attributed to planned growth investments and higher depreciation and amortization costs.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $4.25 billion | $4.18 billion |
| Gross Profit | $1.56 billion | $1.51 billion |
| SG&A Expenses | $994.2 million | $955.4 million |
| Net Income | $425.2 million | $421.2 million |
| Diluted EPS | $3.93 | $3.83 |
Performance Analysis
Tractor Supply Co (TSCO, Financial) achieved a diluted EPS of $3.93, aligning with analyst estimates. However, the company faced challenges with a slight decline in comparable store sales, reflecting mixed performance across different product categories. Seasonal merchandise showed strength, while year-round discretionary categories experienced declines.
"We are pleased with our second quarter EPS results that were in line with our outlook. My sincere appreciation goes out to our more than 50,000 Team Members for living our Mission and Values every day as we focus on taking care of our customers and each other," said Hal Lawton, President and Chief Executive Officer of Tractor Supply.
Financial Achievements and Outlook
Despite the challenges, Tractor Supply Co (TSCO, Financial) managed to increase its net income by 0.9% to $425.2 million. The company also repurchased approximately 0.5 million shares of its common stock for $139.2 million and paid quarterly cash dividends totaling $118.5 million, returning a total of $257.7 million of capital to shareholders in the second quarter of 2024.
For the fiscal year 2024, Tractor Supply Co (TSCO, Financial) updated its financial guidance, now expecting net sales between $14.8 billion and $15.0 billion, and earnings per diluted share between $10.00 and $10.40.
Tractor Supply Co (TSCO, Financial) continues to focus on its long-term strategy and operational initiatives to drive market share growth and create value for shareholders.
Explore the complete 8-K earnings release (here) from Tractor Supply Co for further details.
