BRENTWOOD, Tenn. - Tractor Supply Company (NASDAQ:TSCO), the largest rural lifestyle retailer in the United States, reported a first-quarter earnings beat but issued guidance that failed to meet analyst expectations, sending its shares down by 2.3%.
For the first quarter ended March 30, 2024, the company posted diluted earnings per share (EPS) of $1.83, exceeding the analyst estimate of $1.71. This figure represents a 10.9% increase from the $1.65 reported in the same quarter last year. Net sales saw a modest rise of 2.9% to reach $3.39 billion, although this was slightly below the consensus estimate of $3.4 billion.
Tractor Supply's President and CEO, Hal Lawton, attributed the company's solid financial performance to positive comparable store sales and robust earnings growth, driven by transaction growth and ongoing market share gains. Despite a slight decline in comparable average ticket, the company saw strength in big ticket sales and seasonal merchandise.
However, the company's forward-looking guidance dampened investor sentiment. Tractor Supply forecasts full-year 2024 EPS to be in the range of $9.85 to $10.50, with the midpoint below the analyst consensus of $10.24. Revenue projections for the same period are expected to be between $14.7 billion and $15.1 billion, with the midpoint slightly above the consensus estimate of $14.98 billion.
The company's gross profit increased by 4.4% to $1.22 billion, with a gross margin rate increase primarily due to lower transportation costs and disciplined product cost management. Selling, general, and administrative expenses rose by 3.5% to $957.7 million, attributed to planned growth investments.
During the quarter, Tractor Supply opened 17 new stores and continued its capital investment plans, which include opening approximately 80 new stores throughout the fiscal year, alongside Project Fusion remodels and garden center transformations.
Despite the positive aspects of the report, the market's response focused on the future, with shares dropping 4.5% following the release. The company remains committed to disciplined investments to capture long-term growth opportunities, as stated by CEO Lawton, who expressed confidence in the outlook for 2024 and the health and engagement of the customer base.
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