Tractor Supply produces impressive Q3; enters Wyoming
Brentwood, Tenn. – Tractor Supply Company reported that net income for the third quarter was $64.8 million, up almost 30% from net income of $50 million in the same quarter a year earlier. The company also announced the opening of its first store in Wyoming, as it continues to expand into the Western region of the country
Net sales increased 13.4% to $1.21 billion from $1.07 billion in the prior year’s third quarter. Same-store sales increased 7.5%. 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 also benefited from an extended spring selling season that resulted from mild temperatures through much of the quarter. The company opened 23 new stores and closed one store in third quarter 2013.
Tractor Supply opened its first store in the state of Wyoming, in Rawlins, Wy, on Oct. 19. The retailer now operates more than 1,200 stores in 48 states.
Red Plum shines amid grim showing by Valassis
Free standing inserts remain a popular promotional vehicle, but weakness in other aspects of the Valassis business model have CEO Rob Mason vowing major changes after a third quarter sales decline.
Valassasis, best known by consumers for its Red Plum branded inserts in Sunday newspapers, said revenues for the quarter ended September 30, declined 6.6% to $524 million and earnings declined 24.5% to $27.7 million including $600,000 of restructuring costs. The company’s free-standing inserts, or FSI, business saw revenue increase 4.6% to $75.5 million due to growth in page volume.
The company said its overall weakness was attributed to a an anticipated decline in revenues in its Neighborhood Targeted segment resulting from the change in certain client contracts to a fee-based media placement model, as well as the discontinuance of the sampling and solo direct mail products. Without the effect of these changes, the company said its third quarter revenues would have increased 4.3%.
"Given our year-to-date results, I recognize a clear need for change. We are executing our plan to strategically refocus, restructure and right-size our company," said Rob Mason, Valassis president and CEO. "We project this plan will deliver approximately $28 million in annualized cost savings, putting our company in a better position to jumpstart and accelerate growth moving forward."
Until then, the company said it was lowering its profit forecast to a range of $2.74 and $2.84 a share from earlier guidance of between $3.05 and $3.20 a share.
Digital initiatives cause for optimism at Vantiv
A unique perspective into the holiday season was provided by leading payments processor Vantiv when the company reported strong third quarter results but expressed reservations about the volume of activity during the fourth quarter.
The company said its third quarter revenues increase 14% to $532 million and net income on an adjusted basis increase 17% to $80 million compared to $68.1 million while adjusted earnings per share increased 25% to 40 cents from 32 cents.
"Our double-digit growth in the third quarter demonstrates the strength of our business model," said Charles Drucker, president and chief executive officer at Vantiv. "We continue to win in the market and invest for growth – including the successes in our direct merchant, ecommerce, and technology partner channels. Looking ahead, we will continue to set a high-bar for success. By executing our strategy, Vantiv will continue to grow and win share in the payments market."
The company went on to say that based on the current level of consumer spending activity as well as the current level of new business activity, net revenue for its fourth quarter is expected to be $303 to $308 million and pro forma adjusted net income is expected to be between 43 cents and 45 cents a share. Those figures were below analysts’ estimates. The company said its outlook for the fourth quarter includes negative impacts related to lower consumer spending trends, delays in large client conversions, as well as slower ramping of new business and related impacts.