Tractor Supply sees Q1 sales rise as profits fade
Tractor Supply Company reported first quarter 2023 sales increased 9.1% to $3.3 billion from first quarter 2022 sales of $3 billion.
The Brentwood, Tennessee-based farm and ranch retailer attributed the sale growth to the acquisition of Orscheln Farm and Home, new store openings, and growth in comparable store sales.
Comp store sales increased 2.1%, as compared to an increase of 5.2% in the prior year’s first quarter, driven by comparable average ticket growth of 2.8%.
The strongest regions for comp sales growth were the South Atlantic, Texas/Oklahoma and far West where there was less negative impact from seasonal shifts, the company siad. The strength of these regions was offset by pressure in the Northeast and Mid-West regions due to a mild January combined with a delay in the start of the spring selling season.
Profits declines in the quarter as Tractor Supply reported that its net income decreased 2.2% to $183.1 million from $187.2 million in the first quarter a year ago.
Operating income for the first quarter was $244.4 million, nearly flat compared to $244.3 million for the same period last year.
During the first quarter, the retailer opened 17 new Tractor Supply stores and three new Petsense by Tractor Supply stores.
In the first quarter, Tractor Supply also repurchased approximately 0.9 million shares of its common stock for $197.2 million and paid quarterly cash dividends totaling $113.4 million, returning $310.6 million of capital to shareholders.
Looking ahead, Tractor Supply expects full-year 2023 sales to be in the range of $15 billion to $15.3 billion and expects comp store sales growth to range between 3.5% and 5.5%.
As of April 1, the farm and ranch retailer operated 2,164 Tractor Supply stores in 49 states, including 81 stores acquired from Orscheln Farm and Home in 2022 that will be rebranded to Tractor Supply by the end of 2023. The company also operates 189 Petsense by Tractor Supply stores in 23 states.
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The Bottom Line: As sales move ahead 9.1% in the first quarter, Tractor Supply net earnings fade by 2.2% to $183.1 million.
What the CEO said: “While our first quarter net sales growth exceeded 9%, our comparable store sales were below our expectations, primarily due to less favorable spring weather trends,” said Hal Lawton, president and CEO of Tractor Supply. “We remain confident in our outlook given our continued share gains, the results of our year-round product categories and the scaling of our strategic investments.”
“As spring has arrived across our markets, we are pleased with the improved sales trends we are seeing,” Lawton added. “With the majority of the year ahead of us and given our track record of nimbly managing the business, we are confirming our financial outlook for fiscal 2023.”
Company info: Click here to read the full 2023 first quarter financial report from Tractor Supply Company.
