Notable Earnings: Tractor Supply Company (NASDAQ:TSCO)

Tractor Supply Company (NASDAQ:TSCO) reported earnings for the three months ended Mar2016 on April 20, 2016. The company earned $0.5 per share on revenue of $1.47B. Analysts had been modeling earning per share of $0.46 with $1.45B in revenue.

First Quarter Results

Net sales increased 10.2% to $1.47 billion from $1.33 billion in the prior year’s first quarter. Comparable store sales increased 4.9% compared to a 5.7% increase in the prior year period. The increase in comparable store sales was driven by an increase in both traffic and ticket, with comparable store transaction count increasing 4.2% and average ticket increasing 0.7%. Sales were broad-based, with all of our major product categories and geographic regions generating positive comparable store sales. Solid performance in consumable, usable and edible (C.U.E.) products, specifically pet and livestock consumables benefited sales. Seasonal products including lawn and garden, riding lawn mowers and fencing also performed very well, driven in part by early spring weather in the first quarter of 2016.

Gross profit increased 11.2% to $494.4 million from $444.6 million in the prior year’s first quarter, and gross margin improved to 33.7% compared to 33.4% in the prior year period. The increase in gross margin was driven primarily by improved merchandise margin, which was partially offset by increased transportation costs. The improvement in merchandise margin resulted principally from our key margin initiatives of price management, imports and exclusive brands as well as cost negotiations and vendor support programs.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 9.8% to $386.2 million from $351.8 million in the prior year period. As a percent of net sales, SG&A decreased by 10 basis points to 26.3%. SG&A benefited from the strong comparable store sales increase and effective expense control and payroll management.

Net income increased 16.6% to $67.7 million from $58.0 million and diluted earnings per share increased 19.0% to $0.50 from $0.42 in the first quarter of the prior year.

Tractor Supply Company earnings per share showed an increasing trend of 12.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 399%.Analysts project EPS growth over the next 5 years at 14.83%. It has EPS annual growth over the past 5 fiscal years of 21.7% when sales grew 11.3. It reported 10.2% sales growth, and 19.2% EPS growth in the last quarter.

The stock is trading at $96.1, up 29.05% from 52-week low of $75. The stock trades down -0.93% from its peak of $97.25 and 6.02% above the consensus price target of $101.89. Its volume clocked up at 0.79 million shares which is lower than the average volume of 0.94 million shares. Its market capitalization currently stands at $12.91B.