- Earnings per Share Increased 129.2% to $0.55 vs. $0.24
- Sales Increased 22.0% to $1.02 Billion
- Same-Store Sales Increased 11.5%
Tractor Supply Company (NASDAQ: TSCO), the largest retail farm and ranch store chain in the United States, today announced financial results for its first fiscal quarter ended March 31, 2012.
First Quarter Results
Net sales increased 22.0% to $1.02 billion from $836.6 million in the prior year's first quarter. Same-store sales increased 11.5% with broad-based strength across all major product categories and driven, in part, by early spring weather in 2012. Inflation, principally in consumable, usable and edible (C.U.E.) categories, also contributed to the same-store sales increase. In addition to these factors, total sales benefited from new store growth and the calendar shift related to the 53rd week in fiscal 2011, which resulted in the capturing of an additional week of spring sales in the first quarter of 2012.
Each quarter of fiscal 2012 starts one week later than the same quarter of fiscal 2011 due to the Company's 2011 fiscal year having 53 weeks versus the normal 52 weeks. Reported same-store sales for the first quarter of 2012 are based on the comparable thirteen-week periods ended March 31, 2012 and April 2, 2011. Adjusting for the week shift, same-store sales for the first quarter of 2011 increased 7.6%. Same-store sales for the four quarters and full year of 2011, adjusted for the week shift, are presented in these tables of Selected Financial and Operating Information.
Gross margin dollars increased 21.6% to $332.8 million from $273.6 million in the prior year's first quarter. As a percent of sales, gross margin decreased slightly to 32.6% from 32.7% in the prior year. The decrease in gross margin as a percent of sales resulted primarily from warmer weather in January and February that necessitated markdowns to sell through winter seasonal merchandise, increased transportation costs and an increase in big ticket sales due to the early spring selling season. These decreases in gross margin were partially offset by favorable inventory shrink results.
Selling, general and administrative expenses, including depreciation and amortization, improved to 26.3% of sales compared to 29.3% of sales in the prior year's first quarter. The improvement as a percent of sales was primarily attributable to strong same-store sales growth, which enabled the Company to leverage store payroll and occupancy costs.
Net income for the quarter was $40.3 million, or $0.55 per diluted share, compared to net income of $18.3 million, or $0.24 per diluted share, in the first quarter of the prior year.
The Company opened 33 new stores and closed one store compared to 26 new store openings in the prior year's first quarter.
Jim Wright, Chairman and Chief Executive Officer, stated, "We are delighted to have reached another milestone, achieving record first quarter sales in excess of one billion dollars for the first time in Tractor Supply's history. Customers responded favorably to our spring products and the continual enhancements we have been making to our merchandise assortments. Our proactive planning allowed us to capture the earlier spring selling season in Southern markets and we reacted quickly to capitalize on the early spring weather seen in March. We continue to evolve our assortments and the in-store experience to ensure we have the right product and marketing programs in place to keep customers highly engaged throughout the spring and summer selling seasons."
Company Outlook
As reported in the Company's business update issued on April 12, 2012, for the full-year 2012, the Company expects net sales to range between $4.61 billion and $4.68 billion, same-store sales to increase 4.0% to 5.5% compared to 2011 and net income to range between $260 million and $265 million, or $3.52 to $3.60 per diluted share.
Mr. Wright concluded, "Our first quarter performance continues to demonstrate our improved agility and responsiveness. We will continue to build on the work we have accomplished in the areas of inventory management and merchandise allocation and regionalization, and believe we can continue to enhance consumer spend and attract new customers to the Tractor Supply brand. As we look to the remainder of what has started off as another exciting year for Tractor Supply Company, we are energized by the opportunities we see ahead and by our ability to capitalize on those opportunities."
As of March 31, 2012, Tractor Supply Company operated 1,117 stores in 44 states. The Company's stores are focused on supplying the lifestyle needs of recreational farmers and ranchers. The Company also serves the maintenance needs of those who enjoy the rural lifestyle, as well as tradesmen and small businesses. Stores are located in towns outlying major metropolitan markets and in rural communities. The Company offers the following comprehensive selection of merchandise: (1) equine, pet and small animal products, including items necessary for their health, care, growth and containment; (2) hardware, truck, towing and tool products; (3) seasonal products, including lawn and garden items, power equipment, gifts and toys; (4) maintenance products for agricultural and rural use; and (5) work/recreational clothing and footwear.
