BRENTWOOD, Tenn. — Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retail store chain in the United States, recently announced financial results for its second quarter ended June 27, 2015.

Second Quarter Results
Net sales increased 11.9% to $1.77 billion from $1.58 billion in the prior year's second quarter. Comparable store sales increased 5.6% versus a 1.9% increase in the prior year period. The increase in comparable store sales was broad based and driven by increases in both traffic and ticket. Comparable store transaction count increased 4.2% and average ticket increased 1.3%. The comparable store sales increase benefited from a solid performance in seasonal items, including big ticket, and consumable, usable and edible (C.U.E.) products. Seasonal and big ticket items included riding lawn mowers and trailers. C.U.E. was driven principally by strong sales in pet and animal categories. These increases were partially offset by deflation.

Gross profit increased 13.6% to $625.3 million from $550.5 million in the prior year's second quarter. As a percent of sales, gross margin increased 50 basis points to 35.3%. The increase in gross margin resulted from strong price and markdown management, as well as lower fuel costs. These favorable items were offset in part by a change in mix to more big ticket items, which typically run below chain average margin.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 12.0% to $380.2 million. As a percent of sales, SG&A expenses were relatively flat to the prior year at 21.4%. Higher year-over-year incentive compensation was partially offset by improved leverage of advertising costs, as well as certain other fixed operating costs, due to the strong comparable sales growth.

Net income increased 14.9% to $153.3 million from $133.4 million and diluted earnings per share increased 17.9% to $1.12 from $0.95 in the second quarter of the prior year.

The company opened 17 new stores and closed one store in the second quarter of 2015 compared to 23 new store openings and no store closures in the prior year's second quarter.

Greg Sandfort, president and chief executive officer, stated, "We had a solid second quarter and were pleased with the sales trends during the quarter. Our merchandise, planning and store teams did an excellent job of managing assortments and driving strong sales and margins for the quarter. Once again, sales growth was broad based across all our merchandise categories and geographic regions and we saw growth in both traffic and ticket. Continued execution of our price and inventory management strategies contributed to healthy increases in gross margin. Looking ahead, we believe our marketing and merchandising initiatives, along with our strategic investments in the business, have us well positioned for the late summer and early fall selling season."

First Six Months Results
Net sales increased 12.2% to $3.10 billion from $2.77 billion in the first six months of 2014. Comparable store sales increased 5.7% versus a 2.0% increase in the first six months of 2014. Gross profit increased 13.0% to $1.07 billion from $946.8 million and gross margin increased 30 basis points to 34.5% of sales from 34.2% of sales in the first six months of 2014.

Selling, general and administrative expenses, including depreciation and amortization, increased 11.4% to $731.9 million, and decreased as a percent of sales to 23.6% compared to 23.7% for the first six months of 2014.

Net income increased 16.0% to $211.4 million from $182.2 million and net income per diluted share increased 18.5% to $1.54 from $1.30 for the first six months of 2014.

The company opened 58 new stores and closed two stores in the first six months of 2015 compared to 55 new store openings and no store closures during the first six months of 2014.

Fiscal 2015 Outlook
Based on strong performance in the first half, the Company is raising its financial expectations for fiscal 2015. Net sales are now anticipated to range between $6.25 billion and $6.33 billion compared to the Company's previous expected range of $6.20 billion to $6.30 billion. Comparable store sales are now expected to increase 3.5% to 4.5% compared to prior expectation of an increase of 2.5% to 4.0%. The Company now anticipates net income will range from $3.00-$3.08 per diluted share compared to previous guidance of $2.95-$3.05 per diluted share. For the full year, the Company expects capital expenditures to range between $220 million and $230 million compared to its previous guidance of $240 million-$250 million. Capital expenditures include spending to support 110-115 new store openings and construction of a new southwest distribution center in Casa Grande, Ariz., scheduled to open in late fiscal 2015.

Conference Call Information
Tractor Supply Company will be hosting a conference call at 5:00 p.m. Eastern Time today to discuss the quarterly results. The call will be broadcast simultaneously over the Internet on the Company's website at TractorSupply.com and can be accessed under the link "Investor Relations." The webcast will be archived shortly after the conference call concludes and will be available through August 5, 2015.

Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast.

About Tractor Supply Company
At June 27, 2015, Tractor Supply Company operated 1,438 stores in 49 states. The company's stores are focused on supplying the lifestyle needs of recreational farmers and ranchers and others who enjoy the rural lifestyle, as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company offers the following comprehensive selection of merchandise: (1) equine, livestock, pet and small animal products, including items necessary for their health, care, growth and containment; (2) hardware, truck, towing and tool products; (3) seasonal products, including heating, lawn and garden items, power equipment, gifts and toys; (4) work/recreational clothing and footwear; and (5) maintenance products for agricultural and rural use.

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