Tractor Supply provides a Q1 preview
Tractor Supply Company provided a business update on its first fiscal quarter, which pointed to a 6.6% net sales increase but a decline in comparable store sales.
Tractor Supply CEO Greg Sandfort said the upcoming spring selling season promises to be a bigger boon for seasonal merchandise sales.
"Weather can influence the demand for certain products, and while we had a challenging quarter with respect to sales and margin, our business is more accurately assessed by the halves, not the quarters," he said. "We believe seasonal merchandise sales will improve as we move further into the spring selling season."
Net sales for the first quarter ended April 1 were up 6.6% to $1.56 billion from $1.47 billion in the first quarter of 2016.
However, comparable store sales decreased 2.2% versus an increase of 4.9% in the prior year's first quarter. This was driven by decreases in comparable transaction count and average ticket of 1.4% and 0.9%, respectively, as well as lower sales of seasonal merchandise and the impact of deflation. The Northeast was particularly challenged with its weather conditions.
The company expects net income per diluted share for the first quarter to range from $0.45 to $0.46.
"We have a solid core business that is focused on a dedicated lifestyle customer who depends upon us for the products they need," added Sandfort. "Despite the challenging start to the fiscal year, we believe there is significant business ahead of us. We are excited about our upcoming merchandise initiatives and the continued execution of our cross-channel, customer centric growth strategy, which includes the recent expansion of Neighbor's Club and Buy Online Pick Up In Store."
The full first quarter results will be released after market close on Wednesday, April 26.
Axalta scoops up Valspar’s coatings business
Sherwin-Williams and Valspar have agreed to sell the assets of Valspar's North American Industrial Wood Coatings business to Axalta for $420 million in cash.
The divestment is part of a move meant to smooth the process of the proposed acquisition of Valspar by Sherwin-Williams, according to the review by the Federal Trade Commission (FTC) and Canadian Competition Bureau (CCB).
"With this agreement, we believe that we have addressed regulatory concerns appropriately and we are moving forward to obtain approval for our acquisition of Valspar," said Sherwin-Williams president and CEO John Morikis.
The wood coatings business — a provider of coatings for OEM and aftermarket Industrial Wood markets — had revenues of approximately $225 million in 2016.
"We believe that Axalta is an excellent buyer for our North American Industrial Wood Coatings business and will provide great opportunities for our talented employees," said Valspar chairman and CEO Gary Hendrickson. "Axalta is a strong cultural fit with Valspar and shares our commitment to innovation and customer service. We will work closely with Axalta to ensure a smooth transition of this business."
Fastenal moves at a nice clip in Q1
Fastenal Company rode a wave of positive momentum in the first fiscal quarter, with improvements of at least 6% in both its top and bottom line.
Net sales for the quarter ended March 31 were $1.05 billion, up 6.2% over the previous year's $986.7 million, driven primarily by higher unit sales from increases in sales at existing store locations, growth in the industrial vending business, and growth in new and existing Onsite locations.
Sales of fastener products grew 0.8%, and sales of non-fastener products grew 9.4% (and represented 64.4% of total sales during the quarter).
Net earnings came in at $134.2 million, up 6.3% over the year-ago quarter's $126.2 million.
"We are pleased with the improving pace of business growth in the first quarter of 2017," said Dan Florness, President and Chief Executive Officer. "This is a welcome sign of improving customer business activity and of the traction we are gaining in our growth drivers. Thank you to our customers for their belief in Fastenal. Go Blue Team!"
However, gross profit declined 40 basis points to 49.4% from 49.8% in the first quarter of 2016, largely due to a change in customer and product mix.