Q3 2024 Tractor Supply Co Earnings Call Transcript
Key Points
- Tractor Supply Co (TSCO) reported a net sales growth of 1.6% for the third quarter, with a slight decline in comparable store sales by 0.2%, indicating resilience in a challenging retail environment.
- The acquisition of Allivet, an online pet pharmacy, is expected to expand TSCO's total addressable market by approximately $15 billion and be accretive to earnings in 2025.
- TSCO's Neighbor's Club loyalty program continues to drive customer engagement, reaching a record membership of over 37 million members, with comp sales outpacing overall sales growth.
- The company has made significant investments in its supply chain, adding 2 million square feet to distribution center capacity and improving service levels with 16 mixing centers.
- TSCO's digital sales saw double-digit growth, supported by improvements in search and checkout processes, enhancing the overall customer experience.
- Comparable store sales were slightly negative, driven by a decline in average ticket size, reflecting cautious consumer spending.
- Discretionary categories such as clothing, footwear, and outdoor living underperformed, indicating a shift in consumer priorities.
- Retail price deflation, particularly in consumable, usable, and edible products, impacted average unit retail prices and overall sales performance.
- The macro retail environment remains challenging, with a continued shift of consumer spending towards services, affecting retail sales growth.
- SG&A expenses increased as a percentage of net sales, primarily due to planned growth investments and modest deleverage of fixed costs.
Good morning, ladies and gentlemen, and welcome to Tractor Supply Company's conference call to discuss third-quarter 2024 results. (Operator Instructions)
Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Tractor Supply Company. And as a reminder, this call is being recorded.
I would now like to introduce your host for today's call, Mrs. Mary Winn Pilkington, Senior Vice President of Investor and Public Relations for Tractor Supply Company. Mary Winn, please go ahead.
Thank you, operator. Good morning, everyone. Thanks for taking the time to join us today. On the call today are Hal Lawton, our CEO; Kurt Barton, our CFO. After our prepared remarks, we'll open the call up for your questions. Seth Estep, our EVP and Chief Merchandising Officer, will join us for the question-and-answer session. Please note that we have made a supplemental slide presentation available on our website to
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