Tractor Supply is reporting robust sales in its outlook for the second quarter, and the company is planning strategic investments in its team members and consumer-shopping experience.
Building on the momentum in its business in the first quarter of 2020, Tractor Supply said it continues to experience record sales across its channels, product categories and geographic regions. The company’s e-commerce business has experienced substantial growth quarter-to-date with many customers choosing buy online, pickup at store and the new contactless curbside delivery option. While there is still a significant portion of the second quarter ahead, the company currently forecasts net sales growth of 24% to 29% and comparable store sales growth of 20% to 25%. For the second quarter, the net incremental operating expenses related to the COVID-19 pandemic are estimated to be at the high end of the Company’s previous guidance range of $30 million to $50 million. Diluted earnings per share for the second quarter is forecasted to be in the range of $2.45 to $2.65.
As part of the company’s hiring initiative, more than 4,000 new team member positions have been added over the last six weeks. In addition, the company’s appreciation bonuses of $2 per hour for all frontline hourly team members in stores and distribution centers will be continued through June 27, and store managers will receive an incremental $1,000 bonus. Permanent wage increases will go into effect on June 28, including a minimum of $1 per hour raise for all hourly team members.
Tractor Supply has also accelerated previously planned investments in technology to provide a more convenient omnichannel shopping experience through its redesigned e-commerce site and a new mobile app. The new website will enhance and simplify the e-commerce journey for the customer and give Tractor Supply the ability to introduce new digital capabilities into the market more quickly.
Additionally, Tractor Supply will launch its first-ever mobile app in late June. The app features the company’s Neighbor’s Club loyalty program with a focus on personalized and more intuitive shopping experiences, including integration of contactless curbside pickup for buy online, pickup at store.
Hal Lawton, Tractor Supply’s president and CEO, said, “Today, we have a unique opportunity to grow our business as we roll out new technology and services while capitalizing on our product categories and convenient shopping format. Continuing to build our relationships across our customer base is a top priority for us as we are growing share with existing and new customers, while also reengaging lapsed customers. The investments we are making in our team members and new technology and services are done with a commitment to disciplined financial returns and profitable growth as we look for these strategic investments to be offset over time by increased sales, improved gross margin opportunities and cost savings in other areas.”