Tractor Supply Company Reports First Quarter Results

BRENTWOOD, Tenn., April 24, 2013 /PRNewswire/ -- 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 30, 2013.

First Quarter Results
Net sales increased 6.4% to $1.09 billion from $1.02 billion in the prior year's first quarter.  Same-store sales increased 0.5% compared to a very strong 11.5% increase in the prior-year period.  The same-store sales increase was driven primarily by continued strong results in key consumable, usable and edible (C.U.E.) products, principally animal- and pet-related merchandise.  The Company experienced strong sales of winter seasonal merchandise due to the extended cold weather during the quarter.  These increases were principally offset by lower sales of spring seasonal merchandise as compared to the prior year's first quarter.  As stated in the prior year, the Company estimated a sales benefit of approximately $38 million in the first quarter of 2012 due to the early spring weather.

Gross margin dollars increased to $352.1 million from $332.8 million in the prior year's first quarter.  As a percent of sales, gross margin decreased slightly to 32.4% from 32.6% in the prior year.  The decrease in gross margin as a percent of sales resulted primarily from the continued mix shift to lower-margin C.U.E. products, as well as increased transportation costs.  These decreases were partially offset by the favorable impact from key margin-driving initiatives.

Selling, general and administrative expenses, including depreciation and amortization, improved to 26.1% of sales compared to 26.3% of sales in the prior year's first quarter.  The improvement as a percent of sales was attributable to lower year-over-year incentive compensation expense.

Net income for the quarter was $44.0 million, or $0.62 per diluted share, compared to net income of $40.3 million, or $0.55 per diluted share, in the first quarter of the prior year. 

The Company opened 22 new stores in the first quarter of 2013 compared to 33 new store openings in the prior year's first quarter.

Greg Sandfort, President and Chief Executive Officer, stated, "We are delighted with our ability to again deliver double-digit EPS growth on top of very strong growth during the prior year's first quarter.  While weather was not as favorable as a year ago, we planned accordingly and are pleased to have generated a same-store sales increase compared to last year's very strong 11.5% increase.  Our C.U.E. categories again posted solid increases in both sales and units, and contributed to our 20^th consecutive quarter of year-over-year transaction count increases."

Company Outlook
The Company confirmed its fiscal 2013 expectations for net sales to range between $5.07 billion and $5.17 billion, with same-store sales expected to increase 3% to 5%.  The Company projects fiscal 2013 full year net income to range from $4.32 to $4.40 per diluted share.  This projection includes estimated costs of $0.06 to $0.07 per diluted share associated with the relocation of its Southeast distribution center and its corporate data center.  For the full year, the Company expects capital expenditures to range between $240 million and $250 million including spending to support 100 to 105 new store openings and construction of the Company's Southeast distribution center expected to open in 2013 and new Store Support Center expected to open in 2014.

Mr. Sandfort concluded, "We believe we have the right product and plans in place to capitalize on the spring selling season.  The structural changes we have embedded into our daily operations continue to drive sustainable improvements for our business.  As we look to the balance of 2013, we remain optimistic regarding the opportunities ahead of us."

Conference Call Information
Tractor Supply Company will be hosting a conference call at 5:00 p.m. Eastern Time today to discuss the quarterly results. The call will be broadcast simultaneously over the Internet on the Company's website at TractorSupply.com and can be accessed under the link "Investor Relations."  The webcast will be archived shortly after the conference call concludes and will be available through May 8, 2013.

About Tractor Supply Company
At March 30, 2013, Tractor Supply Company operated 1,197 stores in 45 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.

Forward Looking Statements
As 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 estimated results of operations, capital expenditures and new store openings 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, general economic conditions affecting consumer spending, the timing and acceptance of new products in the stores, the mix of goods sold, 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, the ability to manage expenses, the availability of favorable credit sources, capital market conditions in general, failure to open new stores in the manner and number currently contemplated, the impact of new stores on our business, competition, weather conditions, the seasonal nature of our business, 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 privacy, ongoing and potential future legal or regulatory proceedings, management of our information systems, failure to secure or 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 and results of examination by taxing authorities, 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)

^(a) Assumes average inventory cost, excluding inventory in transit.

SOURCE Tractor Supply Company