Following a strong 2018, investors were looking for Tractor Supply (TSCO -0.55%) to extend its positive sales and profit momentum with its first-quarter earnings report in late April. The rural lifestyle retailer didn't disappoint on either front, as its announcement showed healthy revenue growth and stable profitability. The performance put the chain in a solid position as it enters the crucial spring selling season .


Q1 2019

Q1 2018

Year-Over-Year Change


$1.82 billion

$1.68 billion


Net income

$76.8 million

$71.4 million


Earnings per share




Data source: Tractor Supply financial filings.

What happened this quarter

Tractor Supply's sales-growth pace held steady with the results it achieved over the prior 12 months, but gains were tilted more toward higher average spending as customer traffic growth slowed. The retailer protected profitability even as it spent more on labor and in building out its online selling infrastructure.

A tractor working on a small farm.

Image source: Getty Images.

Highlights of the quarter include: 

  • Comparable-store sales growth landed at 5%, or equal to the rate of expansion for the full 2018 year. That boost counts as an acceleration over the prior-year period, though, when comps were 3.7%.
  • Growth was again balanced between increased customer traffic, higher average spending, and a rising store count. However, the relative mix of those positive trends tilted toward higher spending. Transaction value increases accounted for most of the sales gains, while customer traffic gains slowed to below 2% from slightly over 3% in 2018.
  • Tractor Supply's gross profit margin inched up as the company executed well with its pricing and stocked the right mix of seasonal product assortments. That slight uptick was offset by higher selling expenses tied to the opening of a new distribution center and rising labor costs. Overall, operating margin held steady at just under 6% of sales.

What management had to say

CEO Greg Sandfort credited Tractor Supply's store managers for helping deliver a strong start to the fiscal year. "The team worked together to ensure that our seasonal product assortments and in-store levels were appropriate to support our customers' changing needs across our regions," he said in a press release. That success, Sandfort said, reflected "balanced and broad-based sales growth across our differentiated model."

Looking forward

Executives saw no compelling reason to adjust any of their full-year operating and financial targets in conjunction with the latest report. Investors shouldn't read too much into that stable outlook, though. Tractor Supply believes its seasonal selling patterns mean the revenue cadence is better understood in two-quarter chunks than on a quarter-by-quarter basis. So management tends to resist changing its outlook until after the key spring selling season that's just getting started.

Thus, for now, the retailer is still expecting to add about 80 new locations in 2019 that, combined with a 3% comps increase at the midpoint of guidance, will deliver sales of between $8.31 billion and $8.46 billion compared with $7.9 billion last year.

Net income should rise by about 5%, Tractor Supply confirmed, to between $555 million and $575 million as operating margin stabilizes following three years of declines.