Tractor Supply lowers guidance amid soft Q3 sales
![Tractor Supply has set a long-term target of 3,000 stores.](jpg/tractor-supply_066a8.jpg)
Tractor Supply Co. reported a mixed third quarter, with earnings that exceeded expectations but sales that fell short.
The nation’s largest rural lifestyle retailer reported that its net income rose 8.9% to $255 million, or $2.33 a share, for the quarter ended Sept. 30, up from $234.1 million, or $2.10 a share, in the year-age period. Analysts had expected earnings of $2.29 per share.
Sales rose 4.3% to $3.41 billion, missing estimates of $3.47 billion. The increase in net sales was driven by contributions from the acquisition of Orscheln Farm and Home and new store openings.
Comparable store sales decreased 0.4%, driven by a comparable average ticket decline of 0.3% and a flat comparable average transaction count. Comp store sales performance reflects continued strength in core year-round merchandise, including consumable, usable and edible products which significantly outpaced the chain average, the company said. This performance largely offset declines in demand for seasonal goods and big-ticket items.
In a statement, Tractor Supply CEO Hal Lawton said the chain delivered solid growth in both net sales and earnings in the third quarter, but its sales performance was softer than it expected.
“Given this environment, we have updated our outlook for the year to reflect continued unfavorable seasonal category performance and discerning consumer spending,” he said. “Our consistent market share expansion and positive customer trends underscore the enduring strength of our business. We are confident in our ability to navigate in the near-term and remain as excited as ever about our bright future.”
The company is now expecting full-year earnings per share of $10.00 to $10.10, down from its prior guidance of $10.20 to $10.40. Sales are expected to range from $14.5 billion to $14.6 billion, down from prior guidance of $14.8 billion to $14.9 billion. Same-store sales are expected to be flat, versus prior guidance of a 1.3% to 2.5% increase.
As of September 30, 2023, the company operated 2,198 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.
Tractor Supply Company also owns and operates small-box pet specialty supply retailer Petsense by Tractor Supply. As of Sept. 30, 2023, there were operated 195 Petsense by Tractor Supply stores in 23 state.