Ohio Ag Connection - Tractor Supply e-Commerce Up; Invests in Employees, Communities

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Tractor Supply e-Commerce Up; Invests in Employees, Communities
Ohio Ag Connection - 05/28/2020

Tractor Supply Company, Brentwood, Tenn., the largest rural lifestyle retailer in the United States, today provided its financial outlook for the second quarter of 2020, along with the announcement of strategic investments in its Team Members and consumer-shopping experience.

"Over the past few months, Tractor Supply has remained focused on our Team Members, customers and communities. We have taken more than 100 actions in response to the COVID-19 pandemic with an emphasis on the health and safety of our Team Members and customers, while enhancing our capabilities to better serve the essential needs of our customers. Our outlook for record-breaking sales and earnings in the second quarter demonstrates the potential for Tractor Supply to emerge stronger than before as we continue to gain market share and build our business for the future," said Hal Lawton, Tractor Supply's president and chief executive officer.

"Today, we have a unique opportunity to grow our business as we roll out new technology and services while capitalizing on our product categories and convenient shopping format. Continuing to build our relationships across our customer base is a top priority for us as we are growing share with existing and new customers, while also reengaging lapsed customers. The investments we are making in our Team Members and new technology and services are done with a commitment to disciplined financial returns and profitable growth as we look for these strategic investments to be offset over time by increased sales, improved gross margin opportunities and cost savings in other areas."

Building on the momentum in its business in the first quarter of 2020, Tractor Supply continues to experience record sales across its channels, product categories and geographic regions. The Company's e-commerce business has experienced substantial growth quarter-to-date with many customers choosing Buy Online, Pickup At Store and the new contactless curbside delivery option. While there is still a significant portion of the second quarter ahead, the Company currently forecasts net sales growth of 24% to 29% and comparable store sales growth of 20% to 25%. The Company's gross profit performance continues to be strong with gross margin expansion anticipated for the second quarter. For the second quarter, the net incremental operating expenses related to the COVID-19 pandemic are estimated to be at the high end of the Company's previous guidance range of $30 million to $50 million. Diluted earnings per share for the second quarter is forecasted to be in the range of $2.45 to $2.65.

Tractor Supply Team Members are the heart of its relationship with its customers, and they have gone above and beyond to support one another and customers during the COVID-19 pandemic.

In this unprecedented time, Tractor Supply has taken significant actions to support its Team Members including additional COVID-19 paid medical leave, 100% coverage of COVID-19 testing and treatment under its medical plan, and the payment of incremental appreciation bonuses estimated to be approximately $30 million between March 16 to June 27. In addition, frontline Team Members at stores are on track to achieve a record payout of sales bonuses with nearly all store teams anticipated to receive sales bonuses in the quarter. As part of the Company's most ambitious hiring initiative ever, more than 4,000 new Team Member positions have been added over the last six weeks.

Tractor Supply Company also owns and operates Petsense, a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of pet products and services. At March 28, the Company operated 180 Petsense stores in 26 states.

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