Tractor Supply Raises Guidance as Growth Continues

Tractor Supply (US:TSCO) shares slipped on Thursday as investors digested an earnings report and positive company guidance and tried to figure out the implications of declining sales but rising individual ticket prices.

The garden and farming supply chain raised its revenue outlook and now sees full year revenue of $14.06 billion to $14.2 billion, compared to its previous $13.95 billion to $14.05 billion estimate.

Earnings are now forecast to be between $9.55 to $9.63 a share, compared with previous guidance of $9.48 to $9.60 a share. It also raised the lower end of its same-store sales outlook by a fifth of a percentage point to 5.4%.

Third quarter same store sales rose 5.7%. That accounts for a seven percent average ticket value growth and a 1.3% transaction drop.

The company reported Thursday that its third quarter earnings topped Wall Street profit estimates but missed their revenue target.

Net income rose to $234.1 million, or $2.10 a share, from $224.4 million, or $1.95 a share, in the year-ago period. The consensus on Wall Street was $2.08. Sales rose 8.4% to $3.27 billion, compared with the $3.28 billion analyst consensus.

Earlier this month, the Federal Trade Commission cleared its acquisition of Orscheln Farm & Home, a smaller peer. The $320 million deal took a year and a half to win approval.

As part of an agreement with the regulator, Tractor Supply will retain 81 Orschlen stores and sell the others.

It agreed to sell 12 locations to Buchheits, a home-improvement store chain, and 73 sites to Bomgaars, another retailer, the company said at the time. It will get $72 million from the sale.

Tractor Supply grew during the pandemic, and the purchases reflect continued growth plans at the company.

It said earlier this month that I would spend up to $1 million per location to upgrade the Orschlen store next year.

This article originally appeared on Fintel

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