Eight things to know about TSCO
Coming off its 75th anniversary, Tractor Supply is the only publicly traded farm-and-ranch retailer. Here are eight other things you should know about the Brentwood, Tenn.-based retailer, as gathered by reporters listening in on the company’s recent fourth-quarter earnings call.
1. Double-digit momentum: For the fourth quarter, sales were up 10% and net income grew 20.6%. Meanwhile, quarterly comps increased for the 17th straight quarter, and comp transactions increased 5.1%. “We are very pleased with our ability to continue driving increased foot traffic through our doors,” said CEO Greg Sandfort.
2. Focus: Sandfort described his focus this way: “We are driven to be the most dependable supplier of basic maintenance needs to recreational farmers, ranchers and rural consumers.”
3. Heating products and cat litter: Companies often resist broadcasting in-aisle success stories, but Tractor Supply let slip a couple. The retailer said it refined its heating products assortment in the fall, gaining positive results. Also, the retailer is expanding its assortment of cat littler in certain areas of the country.
4. Customer retention: Sandfort said the company was “progressing thoughtfully” with the development of a customer affinity program. He added that the company has made improvements in Customer Relationship Management. “There is still a lot more to learn and do,” he said.
5. Fewer big tickets: While sales and traffic were up, average comp ticket decreased by 1.5%. Two reasons for this were cited: deflation and unfavorable comparisons with last year’s run of major purchases induced by Hurricane Sandy.
6. Exclusivity: Fourth-quarter sales of exclusive branded products were up 19% compared with the same quarter last year. Exclusive brand products represent about 30% of the chain’s sales.
7. Expansion: Thirty-one stores opened in the fourth quarter of 2013, compared with 25 in the prior-year period. Tractor opened 102 stores last year — including stores in new states Arizona, Nevada and Wyoming. It expects to open 102 to 106 in 2013.
8. Capital expenditures: Capital expenditures are growing from $153 million in 2012 to $218 million last year. Tractor estimates $250 million in capital expenditures in each of the next several years.