Thursday, retail farm and ranch stores operator Tractor Supply Co. (TSCO) said it expects significantly higher net income for the third quarter compared with last year, helped by effective management of mark downs, inventories and expenses. However, the company's same store sales for the third quarter declined 5.1% year over year. The Brentwood, Tennessee-based company also lifted its earnings outlook for fiscal 2009.
Tractor Supply currently expects net income for the third quarter to be in the range of about $21.1 million - $22.2 million or $0.58 to $0.60 per share, up from $15.9 million or $0.43 per share in the corresponding period last year.
On average, 17 analysts polled by Thomson Reuters currently expect the company to earn $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the third quarter grew moderately by 1.9% to $747.7 million from $733.9 million in the same period last year, but came below the $752.72 million projected by Street analysts. Same-store sales slid 5.1%, compared with a same-store sales increase of 6.2% in the third quarter of 2008.
Commenting on the results, Jim Wright, chairman and chief executive officer, said, "We are pleased that we will achieve higher-than-expected net income for the third quarter. Our team did an outstanding job delivering gross margin improvement and strong earnings performance by managing markdowns, inventories and expenses effectively. Additionally, we reduced year-over-year per-store inventory levels for the eighth consecutive quarter."
"As we expected, difficult comparisons in emergency-response and seasonal products contributed to the same-store sales decline. However, our strategy to emphasize consumable, usable and edible merchandise categories, including animal and pet items, continued to drive business as we saw comp transaction count grow by 5.9% for the quarter," Wright noted.
Looking ahead, the company lifted its forecast for full year net income to a range of $2.88 to $2.98 per share from its prior guidance of $2.78 to $2.92 per share. Net sales are expected to be about $3.17 billion to $3.20 billion. It Tractor Supply earlier forecasted net sales of between $3.15 billion and $3.25 billion. Same-store sales for the year are expected to decrease approximately 1% to 2%.
Street analysts currently expect the company to earn $2.86 per share on sales of $3.20 billion for 2009.
The company plans to release its full third quarter 2009 results on October 21.
TSCO is currently up $2.31 or 4.55% and trades at $53.11
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