• Net Sales Growth (Q4): 3.1% increase.
• Comparable Store Sales (Q4): 0.6% increase.
• Diluted EPS (Q4): $0.44.
• Net Sales (Fiscal Year 2024): Nearly $14.9 billion, 2.2% growth from 2023.
• Comparable Store Sales (Fiscal Year 2024): 0.2% increase.
• Diluted EPS (Fiscal Year 2024): $2.04 on a split adjusted basis.
• Digital Sales (Fiscal Year 2024): Over $1.1 billion.
• Operating Cash Flow (Fiscal Year 2024): $1.4 billion.
• New Store Openings (2024): 80 Tractor Supply stores and 11 Petsense stores.
• Dividend Growth: 15th consecutive year.
• Gross Margin (Q4): 35.2%, a decrease of 9 basis points.
• SG&A Expenses (Q4): Increased 60 basis points to 26.8% of net sales.
• Operating Margin (Q4): 8.4%, a decline of 69 basis points.
• Net Sales Forecast (2025): $15.6 billion to $15.9 billion, 5% to 7% growth.
• Comparable Store Sales Forecast (2025): 1% to 3% increase.
• Capital Expenditures (2025): $650 million to $725 million.
• Share Repurchases (2025): $525 million to $600 million.

• Warning! GuruFocus has detected 7 Warning Sign with TSCO.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tractor Supply Co (NASDAQ:TSCO) achieved record financial results for the fiscal year 2024, with net sales nearly reaching $14.9 billion and a record diluted EPS of $2.04.
• The company opened 80 new Tractor Supply stores and 11 Petsense stores in 2024, demonstrating strong expansion efforts.
• Tractor Supply Co (NASDAQ:TSCO) returned over $1 billion to shareholders through dividends and share repurchases for the fourth consecutive year.
• The Neighbor's Club loyalty program continues to grow, with membership now exceeding 38 million and representing 80% of sales.
• The acquisition of Allivet is expected to expand Tractor Supply Co (NASDAQ:TSCO)'s total addressable market by $15 billion, enhancing its offerings to pet owners.

Negative Points

• Comparable store sales growth was modest at 0.2% for the fiscal year, indicating challenges in driving same-store sales.
• The company faced a 69 basis point decline in operating margin for the fourth quarter, attributed to planned growth investments and modest deleverage of fixed costs.
• Deflation in key product categories, particularly commodity-based products, posed a headwind, with an estimated 100 basis point drag on comp sales performance in the quarter.
• The warm weather in November and December negatively impacted winter seasonal business, affecting sales in categories like insulated outerwear and heating.
• Tractor Supply Co (NASDAQ:TSCO) anticipates continued SG&A deleverage in 2025 due to increased depreciation and investments in strategic initiatives.

Q & A Highlights

Q: Can you talk about the breadth of comp transactions geographically and across store maturity? A: Harry Lawton, CEO: We were pleased with our comp transaction growth in Q4, which was widespread across categories and geographies. Areas with weather activity saw stronger comp transactions. Our new stores are performing in line with expectations, contributing to new customer counts and incremental transactions.

Q: Can you elaborate on the localization initiatives and the Field & Stream partnership? A: Jonathan Estep, Chief Merchandising Officer: Localization remains consistent with our strategy, aiming for a low single-digit lift by adjusting 25% of floor plans. The Field & Stream partnership will enhance our wildlife and hunting categories, starting midyear, with plans to expand into apparel and other products.

Q: Is the rising egg price driving acceleration in the backyard poultry category? A: Jonathan Estep, Chief Merchandising Officer: Backyard poultry is core to our customers, with one in five participating in the hobby. Rising egg prices have historically driven interest, and we expect this year's Chick Days to attract both current and new customers, deepening their relationship with Tractor Supply.

Q: Can you discuss the macro headwinds and their impact on Tractor Supply's business? A: Harry Lawton, CEO: We've faced headwinds from shifts in personal consumption, deflation in commodity-related items, and stabilization in the pet category. We expect these to moderate in 2025, with potential tailwinds from commodity prices. Our guidance reflects a 1% to 3% comp growth, with sequential improvement expected.

Q: How should we interpret the operating margin guidance for 2025? A: Kurt Barton, CFO: Our operating margin is expected to be in line with 2024, centered around 9.6% to 10%. The range reflects our comp sales guidance of 1% to 3%. We're investing in strategic initiatives while maintaining gross margin expansion and cost efficiencies.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.