Tractor Supply Company
) reported second-quarter 2013 earnings of $1.75 per share, which
came ahead of the year-over-year earnings of $1.45 by 20.7%.
Moreover, it beat the Zacks Consensus Estimate of $1.71 by 2.3%.
Results benefited mainly from an improvement in the top line as
well as margins.
BUILD-A-BEAR WK (BBW): Free Stock Analysis
BIG 5 SPORTING (BGFV): Free Stock Analysis
FIVE BELOW INC (FIVE): Free Stock Analysis
TRACTOR SUPPLY (TSCO): Free Stock Analysis
To read this article on Zacks.com click here.
Net sales in the quarter improved 12.7% to $1,455.8 million from
$1,291.9 million in the prior-year quarter. Further, total
revenue beat the Zacks Consensus Estimate of $1,444.0 million.
Tractor Supply reported same-store sales increase of 7.2%
compared with 3.2% in the prior-year quarter. The rise was driven
by robust performances in core consumable, usable and edible
(C.U.E) products and seasonal merchandise.
Gross profit rose 12.1% to $506.1 million, compared with $451.5
million in the prior-year quarter. Gross margin contracted 10
basis points (bps) to 34.8% from 34.9% in the year-ago quarter,
impacted by the mix shift to low-margin C.U.E products and higher
transportations costs, partly offset by the company's key
Robust growth of same-store sales, better cost containment
related to store operating expenditure, and lower incentive
compensation expenses resulted in a 60 bps improvement in
selling, general and administrative expenses (SG&A),
including depreciation and amortization, as a percentage of
sales, to 21.2%.
Consequently, operating margin during the quarter rose 50 bps to
13.6%, against 13.1% in the prior-year period. Operating income
jumped 16.6% to nearly $198.0 million from $169.8 million
recorded in the prior-year quarter.
Tractor Supply ended the year with cash and cash equivalents of
$55.7 million, compared with $179.1 million at the end of the
year-ago quarter. As of Jun 29, 2013, stockholders' equity was
$1,143.7 million, compared with $1,067.1 million as of Jun 30,
In the quarter, Tractor Supply opened 26 new stores, compared
with 18 stores in the prior-year quarter. As of Jun 29, 2013, the
company operated a total of 1,223 stores in 46 states.
Tractor Supply raised its 2013 net sales guidance, projecting
sales in the range of $5.10-$5.17 billion, with comps expected to
improve 4%−5%. The company anticipates 2013 earnings in the range
of $4.36−$4.44 per share. The Zacks Consensus Estimate remains in
line with the higher end of the company's guidance range. The
projected earnings includes estimated costs of 6-7 cents per
share pertaining to relocation of its distribution center in the
Southeast and its corporate data center.
Other Stocks to Consider
Tractor Supply currently carries a Zacks Rank #2 (Buy). Other
companies performing well in the retail space include
Big 5 Sporting Goods Corporation
Build-A-Bear Workshop Inc.
Five Below, Inc.
). Big 5 Sporting carries a Zacks Rank #1(Strong Buy), while
Build-A-Bear and Five Below carry a Zacks Rank #2.