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01/27/2022

Tractor Supply in strong Q4; details 2022 store expansion, remodels

Marianne Wilson
Editor-in-Chief
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Tractor Supply Co. will open 75 to 80 new stores in 2022.

Tractor Supply Co. finished the year strong, beating fourth-quarter estimates, raising its dividend and giving upbeat fiscal 2022 guidance.

The rural lifestyle retailer plans to open approximately 75 to 80 stores and remodel more than 150 stores in 2022, and transform the side lots in approximately 100 locations. The company also will expand its small-box Petsense format with 10 new locations, and open its ninth distribution center

In addition, Tractor Supply will begin construction of its tenth distribution center, located in Maumelle, Ark., in mid-year. The facility, in Maumelle, Ark., is expected to open in late 2022.

Tractor Supply posted another strong quarter, with net income of $221.3 million, or $1.93 a share, for the quarter ended Dec.25, up from $135.9 million, or $1.15 a share, in the year-ago period. Analysts had expected earnings per share of $1.85.

Sales rose 15.3% to $3.32 billion, beating estimates of $3.23 billion.  E-commerce sales saw “strong double-digit growth” for the 38th consecutive quarter.

Comparable store sales increased 12.7%, driven by comparable average ticket growth and comparable average transaction count growth of 10.3% and 2.4%, respectively.

Net sales for the full year increased 19.9% to $12.73 billion. Comparable store sales increased 16.9%.

“Tractor Supply had an outstanding fourth quarter, capping off a record year of sales and earnings in 2021,” said Hal Lawton, president and CEO Tractor Supply. “Today, our business is substantially stronger than before the pandemic. Our resilient and differentiated business model has allowed us to capitalize on the structural consumer trends benefiting our business, and we believe we have a long growth runway ahead of us. We have strong momentum in our business, and our results demonstrate that our multiyear Life Out Here strategy is working.”

The retailer raising its quarterly dividend by 77% to $0.92 a share, to be payable March 8 to shareholders of record as of Feb. 21. Its board has approved an additional $2 billion to be added to its share buyback authorization

“The combination of the strong cash generation of Tractor Supply’s business and our Board’s confidence in our outlook positions us to return capital to shareholders through the largest dividend increase in our history and an expanded share repurchase authorization,” Lawton said. “We believe we are well-positioned to continue to drive profitable growth and enhance value for our shareholders.”

In November, Lawton noted that Tractor Supply’s business has “never been stronger.”

The company ended its fiscal year with current cash and cash equivalents of approximately $878 million and no amounts drawn on its $500 million revolving credit facility.

Tractor Supply said it now expects fiscal 2022 earnings per share of $9.20 to $9.50 and sales of $13.6 billion to $13.8 billon. Analysts’ estimates are for earnings per share of $8.80 and sales of $13.3 billion

The retailer said its outlook for fiscal 2022 does not contemplate the impact of the pending acquisition of Orscheln Farm and Home.

As of December 25, 2021, Tractor Supply operated 2,003 Tractor Supply stores in 49 states and178 Petsense stores in 23 states.