Why Rural Goods Retailer Tractor Supply's Stock Is Sliding Today

Tractor Supply Company TSCO reported third-quarter FY23 sales growth of 4.3% year-on-year to $3.41 billion, missing the consensus of $3.47 billion.

EPS of $2.33 beat the Wall Street view of $2.29.

Comparable store sales decreased by 0.4%, driven by a comparable average ticket decline of 0.3% and a flat comparable average transaction count. 

Gross profit increased 7.3% to $1.25 billion from $1.17 billion in the prior year's third quarter. Gross margin expanded 101 basis points to 36.7% from 35.6% in the prior year's third quarter.

The gross margin rate increase was primarily attributable to lower transportation costs driven by improvement in the global supply chain and efficiencies from a new distribution center, modestly offset by a negative product mix.

Operating income increased 11.3% to $340.9 million from $306.4 million in the third quarter of 2022.

Tractor Supply exited the quarter with $421.69 million in cash and equivalents. The company's long-term debt stands at $1.73 billion.

TSCO repurchased approximately 0.6 million shares of its common stock for $135.4 million and paid quarterly cash dividends totaling $112.0 million, returning $247.4 million of capital to shareholders in the third quarter of 2023.

Lowers FY23 Outlook: The company expects adjusted EPS of $10.00- $10.10 versus the $10.22 estimate (prior view: $10.20 - $10.40 ).

The company sees revenue of $14.5 billion-$14.6 billion versus the $14.82 billion estimate (prior view: $14.8 billion-$14.9 billion).

Price Action: TSCO shares are trading lower by 5.68% at $186.82 on the last check Thursday.