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Farm, pet and ranch chain Tractor Supply Co. announced its Q3 2023 financial report Thursday, noting 4.3% sales growth year over year for the quarter to $3.41 billion and slight decline in comparable store sales.
“We delivered solid growth in both net sales and earnings in the third quarter, although our sales performance was softer than our expectations. Given this environment, we have updated our outlook for the year to reflect continued unfavorable seasonal category performance and discerning consumer spending,” says president and chief executive officer Hal Lawton. “We are confident in our ability to navigate in the near-term and remain as excited as ever about our bright future. I would like to thank our team for their dedication to our Mission and Values, as this continues to be the key to our customers’ strong loyalty.”
The company partially attributes the the increase in net sales to the acquisition of 83 Orscheln Farm and Home locations in October 2022 and new store openings. (Read more about Bomgaars and Buchheit acquisitions of the remaining Orscheln locations.) The decrease in comparable store sales 0.4% is attributed to comparable average ticket decline of 0.3% and a flat comparable average transaction count.
Core year-round merchandise, including consumable, usable and edible products “significantly outpaced the chain average,” which contributed to sales growth. The company noted lesser demand for seasonal goods and big-ticket items.
Gross margin increased 36.7% from 35.6% in the prior year’s third quarter. The company attributed that growth to “continued execution of an everyday low price strategy, complemented by the use of its Neighbor’s Club loyalty program as a value driver in a sustained higher-cost environment.”
During the quarter, Tractor Supply Co. opened 17 new stores and four new Petsense by Tractor Supply stores and closed one Petsense by Tractor Supply store. The company will celebrate its 85th anniversary in December.
