1ST QUARTER: TRACTOR SUPPLY CO'S SALES UP 42%, EARNINGS UP 118%
Apr. 26, 2021
Source: Tractor Supply Company news release
*Net Sales Increased 42.5%; Comparable Store Sales Increased 38.6%
*Diluted Earnings per Share ("EPS") Increased 118.3% to $1.55
*E-commerce Sales Grew Triple Digits for the Fourth Consecutive Quarter
*Company Raises Fiscal 2021 Diluted EPS Range to $7.05 to $7.40, Compared to Previous Range of $6.50 to $6.90
BRENTWOOD, Tenn. -- Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, today reported record financial results for its first quarter ended March 27, 2021.
First Quarter 2021 Financial Results
"The Tractor Supply team delivered an exceptionally strong start to the year, and our comparable store sales growth exceeded our expectations. This record performance was achieved by the more than 42,000 Tractor Supply Team Members who are committed to taking care of each other and our customers as the dependable supplier of the Out Here lifestyle. I continue to be incredibly proud of how the organization is responding in the current environment," said Hal Lawton, Tractor Supply's President and Chief Executive Officer.
Lawton continued, "Based on our strong performance in the first quarter, the positive macro factors and robust customer retention trends, we are raising our financial outlook for the year and now expect to deliver diluted EPS in the range of $7.05 to $7.40. We believe our resilient business model with a differentiated and loyal customer base, our strategic investments to capture growth opportunities and the strength of our balance sheet position us to capitalize on the momentum in our business in 2021 and beyond."
First Quarter Results
Net sales for the first quarter 2021 increased 42.5% to $2.79 billion from $1.96 billion in the first quarter of 2020. Comparable store sales increased 38.6% compared to an increase of 4.3% in the prior year's first quarter. The comparable store sales results included an increase in comparable average transaction count and ticket of 21.0% and 17.6%, respectively. All geographic regions of the Company had positive comparable store sales growth of at least 30%. The comparable store sales results reflect strong demand for consumable, usable and edible products and robust growth for seasonal categories. In addition, the Company's e-commerce sales experienced triple-digit percentage growth for the fourth consecutive quarter.
Gross profit increased 48.8% to $983.8 million from $661.2 million in the prior year's first quarter, and gross margin increased 148 basis points to 35.2% from 33.8% in the prior year's first quarter. The increase in gross margin was primarily attributable to a lower depth and frequency of sales promotions, less clearance activity and favorable product mix. These factors were partially offset by higher transportation costs as a percent of net sales.
Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 37.3% to $753.2 million from $548.7 million in the prior year's first quarter. As a percent of net sales, SG&A expenses improved 103 basis points to 27.0% from 28.0% in the prior year's first quarter. The improvement in SG&A as a percent of net sales was primarily attributable to leverage in occupancy and other costs from the increase in comparable store sales. Certain first quarter costs as a percent of net sales were higher than the prior year, driven by incremental costs from incentive compensation and COVID-19 such as investments in pay and benefits and other health and safety related expenses.
The effective income tax rate was 18.8% compared to 22.1% in the prior year's first quarter. The improvement in the effective income tax rate was primarily related to a discrete incremental tax benefit associated with share-based compensation compared to the first quarter of 2020.
Net income increased 116.5% to $181.4 million in the first quarter of 2021 from $83.8 million in the prior year's first quarter, and diluted EPS increased 118.3% to $1.55 from $0.71 in the first quarter of 2020.
The Company repurchased approximately 1.6 million shares of its common stock for $253.4 million and paid quarterly cash dividends totaling $60.6 million, returning $314.0 million of capital to shareholders in the first quarter of 2021.
The Company opened 21 new Tractor Supply stores and 2 new Petsense stores and closed 7 Petsense stores in the first quarter of 2021.
Fiscal 2021 Outlook
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