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Tractor Supply Company Reports Second Quarter 2007 Results.

Article Excerpt
- Second Quarter Sales Increase 10.6% -

- Same-Store Sales Up 1.0% -

- Second Quarter EPS is $1.08 -

BRENTWOOD, Tenn., July 25 /PRNewswire-FirstCall/ -- Tractor Supply Company , the largest retail farm and ranch store chain in the United States, today announced financial results for its second fiscal quarter ended June 30, 2007. Additionally, the Company reaffirmed its current outlook for fiscal 2007.

Second Quarter Results

Net sales increased 10.6% to $790.9 million from $714.9 million in the prior year's second quarter. Same-store sales increased 1.0% compared with the 0.5% increase in the prior year's second quarter. Same-store sales growth was driven by the animal health and apparel categories offset by weakness in the seasonal merchandise category.

Gross margin increased 11.5% to $250.4 million, or 31.7% of sales, compared to 31.4% in the prior year's second quarter. The improvement in gross margin resulted from a more favorable product mix and better product sourcing.

Selling, general and administrative expenses increased to 21.1% of sales compared to 20.3% in the prior year's second quarter. The increase in expense as a percent of sales was primarily attributable to a shift in comparable marketing expenses from the first quarter as well as higher occupancy costs resulting from continued store expansion.

Depreciation and amortization expense increased to $12.4 million from $10.6 million in the prior year's second quarter, related directly to new store growth and capital costs for infrastructure and technology. The Company's effective income tax rate increased to 37.9% compared to 37.1% in the prior year's second quarter, primarily due to state taxes relating to the composition of income among the states and the adoption of FIN 48 relating to uncertainties in income tax positions.

Net income for the quarter was $43.8 million, or $1.08 per diluted share, compared to $42.9 million, or $1.05 per diluted share, in the prior year's second quarter. During the quarter, the Company...