Tractor Supply Company, the largest retail farm and ranch store chain in the United States, today announced financial results for its third fiscal quarter ended September 28, 2013.
Third Quarter Results
Net sales increased 13.4% to $1.21 billion from $1.07 billion in the prior year's third quarter. Comparable store sales increased 7.5% versus a 2.9% increase in the prior year period.
The increase in comparable store sales was broad-based and driven by strong results in key consumable, usable and edible (C.U.E.) products as well as seasonal merchandise. Sales benefited from an extended spring selling season that resulted from mild temperatures through much of the quarter.
Gross profit increased 16.4% to $415.7 million from $357.2 million in the prior year's third quarter. As a percent of sales, gross margin increased 90 basis points to 34.4% from 33.5% in the prior year period.
The increase in gross margin resulted from the favorable impact of the Company's key gross margin enhancing initiatives as well as a strong sell-through of spring seasonal products, resulting in fewer markdowns. These increases were partially offset by the continued mix shift to lower-margin, freight-intensive C.U.E. products.
Selling, general and administrative expenses, including depreciation and amortization, improved to 26.0% of sales compared to 26.2% of sales in the prior year's third quarter. The expense leverage was primarily attributable to strong comparable store sales growth and was partially offset by 40 basis points of one-time costs related to the relocation of its Southeast distribution center and corporate data center.
Net income for the quarter was $64.8 million, or $0.46 per diluted share, compared to net income of $50.0 million, or $0.35 per diluted share, in the third quarter of the prior year. All references to per share amounts reflect a two-for-one stock split that was effective September 26, 2013.
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