Tractor Supply Company is on a roll
In the middle of revamping the inside and outside of its stores, rural retailer Tractor Supply Company reported its sixth straight quarter of double-digit same-store sales growth, and categories with high private brand presence such as pet food and consumables outperformed for the chain.
Tractor Supply, based in Brentwood, Tenn., operating nearly 2,000 stores across the country, reported that net sales increased 15.8% and same-store sales increased 13.1% for the third quarter ending Sept. 25. On a two-year stack, the chain saw nearly 40% growth in comparable store sales.
Net sales increased to $3.02 billion from $2.6 billion in Q3 and its gross profit increased 14.9% to $1.09 billion from $948 million.
The company said during its financial webcast that consumables and edibles are driving trips to stores, headlined by poultry, dry dog food and more, performing above chain average. The chain’s 4health pet food is its largest own brand, popular for its better-for-pet ingredients, and last year it partnered with country music star Miranda Lambert on a line of exclusive food to benefit her charitable efforts.
Despite its retail success, the company did say during the call that product prices will increase due to supply chain inflation and freight costs, but will be offset by its price management program and frequent promotions.
Hal Lawton, president and CEO, Tractor Supply, said he’s very pleased with the company’s third quarter and underlying health of the business.
“Over 18 months into the pandemic, our business has never been stronger. Our growth continues to be robust. Our customer trends remain structurally sound. We are continuing to gain market share and invest in the business to capture the significant opportunities ahead of us,” he said. :As we advance our multiyear Life Out Here Strategy, we are beginning to realize the benefits from our strategic initiatives. Despite unprecedented pressures across our supply chain, we are raising our outlook for fiscal 2021 and are on track for a record year of sales and earnings,”
Two areas where the company is expecting to fuel further growth is through the completion of a store remodel called Project Fusion. In stores that have received the refreshed look, Lawton said during the call that those stores are up in the single digits in sales compared with stores not refreshed. The remodel is aimed at brining in better sightlines and merchandising strategies for shoppers and creating a more enhanced and easier shopping experience.
Lawton said the retailer is expanding its outside shopping experience, too, saying that traditionally there’s as much selling space outside than inside, and the area has been underperforming. The "Sidelot" revamp will include an expanded lawn and garden area, a new garden center and an expanded buy online and pickup service outside.