Tractor Supply Company reported strong sales in its first quarter, as the rural lifestyle retailer benefited from essential needs purchasing during the pandemic.
For the first quarter of 2020, net sales increased 7.5% to $1.96 billion from $1.82 billion in the first quarter of 2019. Comparable store sales increased 4.3% compared to a 5% increase in the prior year’s first quarter. Starting in early March, the company benefited from strong sales as consumers stocked up on core everyday consumable, usable and edible merchandise categories related to the COVID-19 pandemic. This stock up activity more than offset the decline in cold-weather seasonal categories sales in January and February resulting from generally warmer weather conditions. For the March period, overall comparable store sales increased 12% above the prior year with key consumable categories up more than 20%, offset by declines in discretionary categories such as clothing, footwear, toys and gift items. The company’s e-commerce business also experienced significant growth in March.
As a result, the company expects diluted earnings per share for the first quarter to be between $0.69 and $0.71.
Hal Lawton, Tractor Supply’s president and CEO, said, “As we progressed through the first quarter, our comparable store sales growth tracked in line with our expectations. Beginning in early March as the COVID-19 crisis evolved, we saw a significant increase in our comparable store sales with a focus in our consumable categories such as companion animal food, livestock feed and heating fuel and other core categories like agricultural fencing, safes, generators and sustainable living.”
For the second quarter of 2020, the net incremental costs of doing business as an essential retailer are currently anticipated to be in the range of $30 million to $50 million.
Kurt Barton, Tractor Supply’s chief financial officer, added, “At Tractor Supply, we have a strong balance sheet with significant financial flexibility and cash flow. Nevertheless, we are taking steps to further enhance the company’s financial flexibility. We are reprioritizing capital expenditures and deferring certain investments while accelerating investments in some of the key strategic initiatives to respond to COVID-19, such as increased delivery options, additional mobile point of sale technology and contactless curbside delivery. While we are adapting to the current operating environment, we continue to invest in our long-term growth opportunities.”