Provides robust fiscal 2023 outlook
Brentwood – One of Tennessee’s top companies recently announced a successful fourth quarter and strong outlook for 2023. Tractor Supply Co. (TSC) recently expanded reach to Sparta. TSC is the largest retailer of its kind in the United States and operates over 2,000 stores in 49 states with locations throughout the Upper Cumberland.
“Tractor Supply had another remarkable year in 2022 as we continued to gain market share and advance our strategic initiatives. For the fourth quarter, while we had an incremental benefit from the late Dec. winter storm, our underlying results were at the high end of our expectations,” said Hal Lawton, chief executive officer of TSC. “Strong results throughout 2022 are directly attributable to the dedication of the more than 50,000 Tractor Supply team members who are passionate about life out here. The team achieved significant milestones ….”
Fourth Quarter 2022 Results
Net sales for the fourth quarter of 2022 increased 20.7% to $4.01B from $3.32B in the fourth quarter of 2021. The fourth quarter included an extra sales week as part of the Company’s 53-week calendar in 2022, which represented 6.8 percentage points of the 20.7% sales growth.
Comparable store sales increased 8.6%, as compared to an increase of 12.7% in the prior year’s fourth quarter, driven by comparable average ticket growth of 6.3% and comparable average transaction count increase of 2.3%.
“Tractor Supply’s needs-based, demand-driven business model has stood the test of time with consistent and sustainable growth,” said Lawton. “As we celebrate our 85th anniversary this year, our future couldn’t be brighter. With a solid foundation, we plan to build on our momentum in 2023. We believe we have the right strategies to manage through the near-term and to deliver long-term compounding growth and value creation.”
Fiscal 2022 Results
Net sales for fiscal 2022 increased 11.6% to $14.20B from $12.73B in fiscal 2021. The fiscal year included an extra sales week as part of the Company’s 53-week calendar in 2022, which represented 1.8 percentage points of the 11.6% sales growth. Comparable store sales increased 6.3% versus a 16.9% increase in fiscal 2021.
Gross profit increased 11.1% to $4.97B from $4.48B in fiscal 2021, and gross margin decreased 17 basis points to 35.0% from 35.2% in fiscal 2021.
SG&A expenses, including depreciation and amortization, increased 11.6% to $3.54B from $3.17B in fiscal 2021. As a percent of net sales, SG&A expenses were flat at 24.9% compared to fiscal 2021.
Operating income increased 9.8% to $1.43B compared to $1.31B in fiscal 2021.
During fiscal 2022, the Company opened 63 new TSC stores and nine new Petsense by TSC stores and closed one Petsense by TSC store. In October 2022, TSC acquired 81 stores from Orscheln Farm and Home that will be rebranded to TSC by the end of 2023.
Fiscal 2023 Financial Outlook
The Company is providing its financial guidance for fiscal 2023, a 52-week year compared to fiscal 2022, a 53-week year. This outlook is based on what the Company can reasonably predict at this time.
For fiscal 2023, the Company expects the following:
|Net Sales||$15.0B to $15.3B|
|Comparable Store Sales||+3.5% to +5.5%|
|Operating Margin Rate||10.1% to 10.3%|
|Net Income||$1.13B to $1.17B|
|Earnings per Diluted Share||$10.30 to $10.60|
|Capital Expenditures||$700M to $775M|
|Share Repurchases||$575M to $675M|
Anticipated capital expenditures include plans in 2023 to open approximately 70 TSC stores, complete the Orscheln Farm and Home conversions to TSC, continue the Project Fusion remodels and garden center transformations, and open 10 to 15 new Petsense by TSC stores. Additionally, the Company celebrated the grand opening of its ninth distribution center Jan. 18 and anticipates the build-out of its 10th distribution center in 2023, beginning operations in the spring of 2024.
Image by Oleksandr Ryzhkov on Freepik.