[caption id="attachment_85575" align="aligncenter" width="720"] Source: Company reports/Coresight Research[/caption]   1Q19 Results Tractor Supply reported 1Q revenues of $1.82 billion, up 8.3% year over year and marginally above the $1.81 billion consensus estimate. Comparable store sales were 5.0%, beating the 4.0% consensus estimate and comprising a 3.2% increase in average ticket and a 1.8% increase in transaction count. All geographic regions and all major product categories had positive comps. The company’s strength in everyday merchandise in the consumable, usable and edible categories drove the increase in comps, in addition to strong sales of winter and other seasonal products as well as spring merchandise sales. Strong sales of winter seasonal categories and the company’s strong price management program, partially offset by higher transport costs, boosted the gross margin. SG&A expenses grew mainly due to costs incurred in the new distribution center in Frankfort, New York, higher incentive compensation and, to a lesser extent, an investment in wages of store team members. Leverage in occupancy and other costs arising from the increase in comparable store sales partially offset the growth in expenses. EPS was $0.63, up 10.2% and beating the $0.55 consensus estimate. Details from the Quarter Management proclaimed its performance in the first quarter as “strong,” characterized by “balanced and broad-based sales growth,” and stated that it is “well-positioned to capitalize on the spring selling season” in the second quarter. Other details:

• Transaction count and average ticket increased in the first quarter with the strong growth in average ticket attributed to the strength in retail price management, product mix, big ticket growth as well as commodity inflation to an extent. The quarterly results represented the seventh consecutive quarter of comparable store sales above 3%.
• During the quarter, the company opened 10 new Tractor Supply stores and one new Petsense store, compared with the 15 new Tractor Supply stores and four new Petsense stores that it opened in the first quarter of 2018.
• The company continued to execute its ONETractor strategy initiatives, which are aligned around four key objectives:
  • Drive profitable growth
  • Build customer-centric engagement
  • Offer relevant products and services
  • Enhance the company’s core and foundational infrastructure capabilities.
• Online sales in the quarter experienced solid double-digit comps and represented the 27th consecutive quarter of strong growth.
• During the quarter, the company continued to reap rewards from its buy online pickup in store (BOPIS) capabilities with the majority of its e-commerce orders being fulfilled at its stores.
• Tractor Supply’s new distribution center in Frankfort, New York, whose construction was completed in the previous quarter, started shipping to stores in the first quarter.

Outlook In 2019, management aims to continue building on its ONETractor strategy and give customers a seamless shopping experience anytime, anywhere and in any way they choose. The company maintained the following guidance for 2019:

• Revenue to grow to $8.31–$8.46 billion.
• Comps growth in the range of 2.0%–0%.
• EPS in the range of $4.60–$4.75.
• Capital expenditure in the range of $225–$250 million.

In FY19, the consensus estimates recorded by StreetAccount call for Tractor Supply to report revenues of $8.43 billion, up 6.2%, and EPS of $4.71, up 9.3%.