Tractor Supply Company Reports Second Quarter 2024 Financial Results; Updates Fiscal 2024 Financial Outlook
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240725392237/en/
-
Net Sales Increase of 1.5% to
$4.25 Billion - Comparable Store Sales Decrease of 0.5%
-
Diluted Earnings per Share (“EPS”) of
$3.93 - Company Updates 2024 Financial Outlook
“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. The team continued to execute extremely well, upholding the high standards we set for ourselves every day. At the halfway point of the year, we have made significant progress on our Life Out Here strategy. We continue to create more separation between us and our competition, thanks to our Team Members and the meaningful relationships they have with our customers,” said
Lawton continued, “We are confident that we have the right plans in place to win with our customers given the strength of our second half operational initiatives. We remain excited about the significant market share growth opportunities ahead of us as we focus on the continued creation of long-term value for our shareholders.”
Second Quarter 2024 Results
Net sales for the second quarter of 2024 increased 1.5% to
Gross profit increased 2.7% to
Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 4.1% to
Operating income was
The effective income tax rate was 22.7% compared to 23.0% in the second quarter of 2023.
Net income increased 0.9% to
The Company repurchased approximately 0.5 million shares of its common stock for
The Company opened 21 new
Fiscal Year 2024 Financial Outlook
Based on year-to-date performance and its outlook,
|
Updated |
Previous |
|
|
|
Comparable Store Sales |
(0.5%) to +1.0% |
(1.0%) to +1.5% |
Operating Margin Rate |
9.8% to 10.1% |
9.7% to 10.1% |
Net Income |
|
|
Earnings per Diluted Share |
|
|
Conference Call Information
Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the webcast.
A replay of the webcast will also be available at IR.TractorSupply.com shortly after the conference call concludes.
About
For more than 85 years,
As of
Forward-Looking Statements
This press release contains certain forward-looking statements, including statements regarding market share gains, value creation, customer trends, new stores and distribution centers, property development plans, return of capital, and financial guidance for 2024, including net sales, comparable store sales, operating margin rates, net income, earnings per diluted share, capital expenditures and plans, share repurchase, and sale-leaseback transactions. All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, 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. Forward-looking statements are usually identified by or are associated with such words as “will,” “would,” “intend,” “expect,” “continue,” “believe,” “anticipate,” “optimistic,” “forecasted” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. As with any business, all phases of our operations are subject to facts outside of our control. These factors include, without limitation, those factors discussed in the “Risk Factors” section of the Company’s Annual Reports or Form 10-K and other filings with the
(Financial tables to follow)
Consolidated Statements of Income (Unaudited) (in thousands, except per share and percentage data) |
|||||||||||||||||||||||||||
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Three Months Ended |
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Six Months Ended |
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||||||||||||||||||||
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% of |
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% of |
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% of |
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% of |
||||||||||||
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Net |
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|
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Net |
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Net |
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|
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Net |
||||||||||||
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|
Sales |
|
|
|
Sales |
|
|
|
Sales |
|
|
|
Sales |
||||||||||||
Net sales |
$ |
4,246,622 |
|
100.00 |
% |
|
$ |
4,184,695 |
|
100.00 |
% |
|
$ |
7,641,456 |
|
100.00 |
% |
|
$ |
7,483,920 |
|
100.00 |
% |
||||
Cost of merchandise sold |
|
2,690,996 |
|
|
63.37 |
|
|
|
2,669,926 |
|
|
63.80 |
|
|
|
4,864,976 |
|
|
63.67 |
|
|
|
4,799,243 |
|
|
64.13 |
|
Gross profit |
|
1,555,626 |
|
|
36.63 |
|
|
|
1,514,769 |
|
|
36.20 |
|
|
|
2,776,480 |
|
|
36.33 |
|
|
|
2,684,677 |
|
|
35.87 |
|
Selling, general and administrative expenses |
|
884,903 |
|
|
20.84 |
|
|
|
853,158 |
|
|
20.39 |
|
|
|
1,738,338 |
|
|
22.75 |
|
|
|
1,681,393 |
|
|
22.47 |
|
Depreciation and amortization |
|
109,265 |
|
|
2.57 |
|
|
|
102,279 |
|
|
2.44 |
|
|
|
213,558 |
|
|
2.79 |
|
|
|
199,512 |
|
|
2.67 |
|
Operating income |
|
561,458 |
|
|
13.22 |
|
|
|
559,332 |
|
|
13.37 |
|
|
|
824,584 |
|
|
10.79 |
|
|
|
803,772 |
|
|
10.74 |
|
Interest expense, net |
|
11,612 |
|
|
0.27 |
|
|
|
12,343 |
|
|
0.30 |
|
|
|
23,514 |
|
|
0.31 |
|
|
|
25,023 |
|
|
0.33 |
|
Income before income taxes |
|
549,846 |
|
|
12.95 |
|
|
|
546,989 |
|
|
13.07 |
|
|
|
801,070 |
|
|
10.48 |
|
|
|
778,749 |
|
|
10.41 |
|
Income tax expense |
|
124,650 |
|
|
2.94 |
|
|
|
125,755 |
|
|
3.01 |
|
|
|
177,707 |
|
|
2.33 |
|
|
|
174,427 |
|
|
2.33 |
|
Net income |
$ |
425,196 |
|
|
10.01 |
% |
|
$ |
421,234 |
|
|
10.07 |
% |
|
$ |
623,363 |
|
|
8.16 |
% |
|
$ |
604,322 |
|
|
8.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
$ |
3.95 |
|
|
|
|
$ |
3.85 |
|
|
|
|
$ |
5.78 |
|
|
|
|
$ |
5.51 |
|
|
|
||||
Diluted |
$ |
3.93 |
|
|
|
|
$ |
3.83 |
|
|
|
|
$ |
5.75 |
|
|
|
|
$ |
5.47 |
|
|
|
||||
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Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
|
107,730 |
|
|
|
|
|
109,426 |
|
|
|
|
|
107,838 |
|
|
|
|
|
109,735 |
|
|
|
||||
Diluted |
|
108,235 |
|
|
|
|
|
110,041 |
|
|
|
|
|
108,381 |
|
|
|
|
|
110,411 |
|
|
|
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|
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|
|
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|
|
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Dividends declared per common share outstanding |
$ |
1.10 |
|
|
|
|
$ |
1.03 |
|
|
|
|
$ |
2.20 |
|
|
|
|
$ |
2.06 |
|
|
|
||||
Note: Percent of net sales amounts may not sum to totals due to rounding. |
Consolidated Statements of Comprehensive Income (Unaudited) (in thousands) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
425,196 |
|
|
$ |
421,234 |
|
$ |
623,363 |
|
|
$ |
604,322 |
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) / income: |
|
|
|
|
|
|
|
||||||||
Change in fair value of interest rate swaps, net of taxes |
|
(1,382 |
) |
|
|
778 |
|
|
|
(2,113 |
) |
|
|
(1,059 |
) |
Total other comprehensive (loss) / income |
|
(1,382 |
) |
|
|
778 |
|
|
|
(2,113 |
) |
|
|
(1,059 |
) |
Total comprehensive income |
$ |
423,814 |
|
|
$ |
422,012 |
|
|
$ |
621,250 |
|
|
$ |
603,263 |
|
Consolidated Balance Sheets (Unaudited) (in thousands) |
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|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
394,748 |
|
|
$ |
620,031 |
|
Inventories |
|
3,000,033 |
|
|
|
2,660,052 |
|
Prepaid expenses and other current assets |
|
244,844 |
|
|
|
297,191 |
|
Total current assets |
|
3,639,625 |
|
|
|
3,577,274 |
|
Property and equipment, net |
|
2,566,723 |
|
|
|
2,185,476 |
|
Operating lease right-of-use assets |
|
3,225,156 |
|
|
|
2,957,792 |
|
|
|
269,520 |
|
|
|
267,088 |
|
Other assets |
|
83,500 |
|
|
|
45,193 |
|
Total assets |
$ |
9,784,524 |
|
|
$ |
9,032,823 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
1,436,520 |
|
|
$ |
1,272,232 |
|
Accrued employee compensation |
|
69,920 |
|
|
|
66,181 |
|
Other accrued expenses |
|
557,721 |
|
|
|
464,267 |
|
Current portion of finance lease liabilities |
|
3,405 |
|
|
|
2,860 |
|
Current portion of operating lease liabilities |
|
382,111 |
|
|
|
317,730 |
|
Income taxes payable |
|
94,858 |
|
|
|
114,194 |
|
Total current liabilities |
|
2,544,535 |
|
|
|
2,237,464 |
|
Long-term debt |
|
1,730,467 |
|
|
|
1,727,504 |
|
Finance lease liabilities, less current portion |
|
29,661 |
|
|
|
32,999 |
|
Operating lease liabilities, less current portion |
|
2,980,876 |
|
|
|
2,762,877 |
|
Deferred income taxes |
|
54,418 |
|
|
|
59,157 |
|
Other long-term liabilities |
|
139,235 |
|
|
|
125,670 |
|
Total liabilities |
|
7,479,192 |
|
|
|
6,945,671 |
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Common stock |
|
1,423 |
|
|
|
1,418 |
|
Additional paid-in capital |
|
1,349,198 |
|
|
|
1,283,589 |
|
|
|
(5,717,944 |
) |
|
|
(5,210,524 |
) |
Accumulated other comprehensive income |
|
4,680 |
|
|
|
10,216 |
|
Retained earnings |
|
6,667,975 |
|
|
|
6,002,453 |
|
Total stockholders’ equity |
|
2,305,332 |
|
|
|
2,087,152 |
|
Total liabilities and stockholders’ equity |
$ |
9,784,524 |
|
|
$ |
9,032,823 |
|
Consolidated Statements of Cash Flows (Unaudited) (in thousands) |
|||||||
|
|
||||||
|
Six Months Ended |
||||||
|
|
|
|
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
623,363 |
|
|
$ |
604,322 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
213,558 |
|
|
|
199,512 |
|
(Gain)/loss on disposition of property and equipment |
|
(4,210 |
) |
|
|
(474 |
) |
Share-based compensation expense |
|
25,124 |
|
|
|
30,179 |
|
Deferred income taxes |
|
(10,712 |
) |
|
|
30,916 |
|
Change in assets and liabilities: |
|
|
|
||||
Inventories |
|
(354,179 |
) |
|
|
34,626 |
|
Prepaid expenses and other current assets |
|
(33,345 |
) |
|
|
(22,439 |
) |
Accounts payable |
|
256,717 |
|
|
|
(126,400 |
) |
Accrued employee compensation |
|
(21,558 |
) |
|
|
(56,795 |
) |
Other accrued expenses |
|
19,996 |
|
|
|
(26,994 |
) |
Income taxes |
|
97,319 |
|
|
|
104,723 |
|
Other |
|
5,270 |
|
|
|
11,145 |
|
Net cash provided by operating activities |
|
817,343 |
|
|
|
782,321 |
|
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
|
(349,818 |
) |
|
|
(349,586 |
) |
Proceeds from sale of property and equipment |
|
18,487 |
|
|
|
761 |
|
Proceeds from Orscheln acquisition net working capital settlement |
|
— |
|
|
|
4,310 |
|
Net cash used in investing activities |
|
(331,331 |
) |
|
|
(344,515 |
) |
Cash flows from financing activities: |
|
|
|
||||
Borrowings under debt facilities |
|
335,000 |
|
|
|
1,767,000 |
|
Repayments under debt facilities |
|
(335,000 |
) |
|
|
(1,195,000 |
) |
Debt discounts and issuance costs |
|
— |
|
|
|
(9,729 |
) |
Principal payments under finance lease liabilities |
|
(864 |
) |
|
|
(2,805 |
) |
Repurchase of shares to satisfy tax obligations |
|
(22,717 |
) |
|
|
(23,121 |
) |
Repurchase of common stock |
|
(255,756 |
) |
|
|
(345,653 |
) |
Net proceeds from issuance of common stock |
|
28,349 |
|
|
|
15,252 |
|
Cash dividends paid to stockholders |
|
(237,347 |
) |
|
|
(226,221 |
) |
Net cash used in financing activities |
|
(488,335 |
) |
|
|
(20,277 |
) |
Net (decrease)/increase in cash and cash equivalents |
|
(2,323 |
) |
|
|
417,529 |
|
Cash and cash equivalents at beginning of period |
|
397,071 |
|
|
|
202,502 |
|
Cash and cash equivalents at end of period |
$ |
394,748 |
|
|
$ |
620,031 |
|
|
|
|
|
||||
Supplemental disclosures of cash flow information: |
|
|
|
||||
Cash paid during the period for: |
|
|
|
||||
Interest, net of amounts capitalized |
$ |
30,203 |
|
|
$ |
20,462 |
|
Income taxes cash paid |
|
89,875 |
|
|
|
36,226 |
|
|
|
|
|
||||
Supplemental disclosures of non-cash activities: |
|
|
|
||||
Non-cash accruals for property and equipment |
$ |
61,418 |
|
|
$ |
27,031 |
|
Increase of operating lease assets and liabilities from new or modified leases |
|
272,524 |
|
|
|
260,268 |
|
Increase of finance lease assets and liabilities from new or modified leases |
|
— |
|
|
|
450 |
|
Selected Financial and Operating Information (Unaudited) |
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|
|
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|
Three Months Ended |
|
Six Months Ended |
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|
|
|
|
|
|
||||||||
Sales Information: |
|
|
|
|
|
|
|
||||||||
Comparable store sales (decrease)/increase |
|
(0.5 |
)% |
|
|
2.5 |
% |
|
|
0.2 |
% |
|
|
2.3 |
% |
New store sales (% of total sales) |
|
2.0 |
% |
|
|
4.8 |
% |
|
|
2.0 |
% |
|
|
4.5 |
% |
Average transaction value |
$ |
63.46 |
|
|
$ |
63.56 |
|
|
$ |
61.24 |
|
|
$ |
61.44 |
|
Comparable store average transaction value (decrease)/increase (a) |
|
0.1 |
% |
|
|
0.6 |
% |
|
|
(0.1 |
)% |
|
|
1.6 |
% |
Comparable store average transaction count (decrease)/increase |
|
(0.6 |
)% |
|
|
1.8 |
% |
|
|
0.3 |
% |
|
|
0.7 |
% |
Total selling square footage (000’s) |
|
38,383 |
|
|
|
37,809 |
|
|
|
38,383 |
|
|
|
37,809 |
|
Exclusive brands (% of total sales) |
|
26.7 |
% |
|
|
28.0 |
% |
|
|
28.1 |
% |
|
|
29.8 |
% |
Imports (% of total sales) |
|
10.9 |
% |
|
|
11.5 |
% |
|
|
11.0 |
% |
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
||||||||
Store Count Information: |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning of period |
|
2,233 |
|
|
|
2,164 |
|
|
|
2,216 |
|
|
|
2,147 |
|
New stores opened |
|
21 |
|
|
|
17 |
|
|
|
38 |
|
|
|
34 |
|
Stores closed |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
End of period |
|
2,254 |
|
|
|
2,181 |
|
|
|
2,254 |
|
|
|
2,181 |
|
|
|
|
|
|
|
|
|
||||||||
Beginning of period |
|
202 |
|
|
|
189 |
|
|
|
198 |
|
|
|
186 |
|
New stores opened |
|
3 |
|
|
|
3 |
|
|
|
7 |
|
|
|
6 |
|
Stores closed |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
End of period |
|
205 |
|
|
|
192 |
|
|
|
205 |
|
|
|
192 |
|
Consolidated end of period |
|
2,459 |
|
|
|
2,373 |
|
|
|
2,459 |
|
|
|
2,373 |
|
|
|
|
|
|
|
|
|
||||||||
Pre-opening costs (000’s) |
$ |
2,251 |
|
|
$ |
4,878 |
|
|
$ |
4,613 |
|
|
$ |
7,942 |
|
|
|
|
|
|
|
|
|
||||||||
Balance Sheet Information: |
|
|
|
|
|
|
|
||||||||
Average inventory per store (000’s) (b) |
$ |
1,138.0 |
|
|
$ |
1,032.9 |
|
|
$ |
1,138.0 |
|
|
$ |
1,032.9 |
|
Inventory turns (annualized) |
|
3.64 |
|
|
|
3.92 |
|
|
|
3.41 |
|
|
|
3.57 |
|
Share repurchase program: |
|
|
|
|
|
|
|
||||||||
Cost (000’s) (c) |
$ |
140,546 |
|
|
$ |
157,448 |
|
|
$ |
259,089 |
|
|
$ |
354,616 |
|
Average purchase price per share |
$ |
272.52 |
|
|
$ |
222.42 |
|
|
$ |
254.81 |
|
|
$ |
225.34 |
|
(a) |
Comparable store average transaction value changes include the impact of transaction value changes achieved on the current period change in transaction count. |
(b) |
Assumes average inventory cost, excluding inventory in transit. |
(c) |
Effective |
Note: Comparable store metrics percentages may not sum to total due to rounding. |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|
|
|
|
|
||||||||
Capital Expenditures (millions): |
|
|
|
|
|
|
|
||||||||
Existing stores |
$ |
76.4 |
|
$ |
79.1 |
|
$ |
134.2 |
|
$ |
162.1 |
||||
New stores, relocated stores and stores not yet opened |
|
58.0 |
|
|
|
28.3 |
|
|
|
119.7 |
|
|
|
61.5 |
|
Information technology |
|
35.7 |
|
|
|
29.2 |
|
|
|
60.1 |
|
|
|
51.1 |
|
Distribution center capacity and improvements |
|
19.1 |
|
|
|
54.1 |
|
|
|
32.2 |
|
|
|
73.7 |
|
Corporate and other |
|
3.4 |
|
|
|
1.0 |
|
|
|
3.6 |
|
|
|
1.2 |
|
Total |
$ |
192.6 |
|
|
$ |
191.7 |
|
|
$ |
349.8 |
|
|
$ |
349.6 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240725392237/en/
investorrelations@tractorsupply.com
Source: