Tractor Supply (NASDAQ:TSCO), a specialty retailer of agricultural supplies, hardware, and pet food, reported mixed financial results for Q3 FY2023. The company's revenue for the quarter reached $3.41 billion, marking a 4.32% increase year-on-year, but falling short of Wall Street's expectations. Despite this, the GAAP profit improved to $2.33 per share from $2.10 per share in Q3 FY2022.
The company also revised its full-year revenue guidance downwards from $14.9 billion to $14.6 billion, reflecting a decrease of 2.02%. This revision comes amidst a backdrop of lower-than-expected Same-Store Sales, which were down by 0.4% year on year. However, Tractor Supply's Free Cash Flow showed a significant improvement, moving to -$21.5 million from -$185 million in the same quarter last year.
CEO Hal Lawton acknowledged the softer sales performance but emphasized the company's consistent market share expansion and positive customer trends as indicators of the enduring strength of their business model.
Over the last 12 months, Tractor Supply has increased its number of store locations by 186 to a total of 2,393 at quarter end. This growth in physical footprint represents an average annual expansion rate of 5.48% over the last two years. Despite this increase in store count, same-store sales have grown by just an average of 5.24% year-on-year over the last two years.
The company's annualized revenue growth rate over the last four years was 15.8%. However, analysts predict a more modest sales growth of 2.8% over the next 12 months.
Following the release of these results and revised guidance, Tractor Supply's stock price fell by 4.5%, trading at $189 per share. The company's performance comes as generational shifts in the economy are leading to a surge in demand for cloud-native cybersecurity, indicating that businesses are increasingly becoming technology companies.
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