Tractor Supply Company today announced financial results for its third quarter ended September 26, 2015.

Third Quarter Results

Net sales increased 8.5% to $1.48 billion from $1.36 billion in the prior year's third quarter. Comparable store average transaction counts increased for the 30^th consecutive quarter. Comparable store sales increased 2.9% from the prior year's third quarter driven by strong performance in consumable, usable and edible (C.U.E.) products, principally in the pet and animal categories, and increased sales in certain spring and summer categories such as trailers and fencing. The strong sales results in these categories were partially offset by softness in the fall seasonal sales cycle later in the quarter due to warmer weather in the north.

Gross profit increased 10.4% to $512.2 million from $464.1 million in the prior year's third quarter. As a percent of sales, gross margin increased 60 basis points to 34.7%. The increase in gross margin resulted from strong price and markdown management, as well as lower fuel costs, which more than offset the stem mile increase from the company's western store expansion.

Selling, general and administrative (SG&A) expenses, including depreciation and amortization, increased 9.1% to $373.0 million compared to prior year's third quarter. As a percent of sales, SG&A expenses increased 10 bps to 25.3%. This increase was mainly related to deleverage in rent and other occupancy costs at the stores and incremental costs associated with two new mixing centers and a new distribution facility in Casa Grande, Arizona.

Net income increased 14.0% to $87.3 million from $76.6 million and diluted earnings per share increased 16.4% to $0.64 from $0.55 in the third quarter of the prior year.

The company opened 30 new stores and closed three stores, two of which were Del's stores, in the third quarter of 2015 compared to 30 new store openings and no store closures in the prior year's third quarter.

Greg Sandfort, President and Chief Executive Officer, stated, "Overall, we are pleased with our third quarter results, particularly with our performance in C.U.E. products. The past two years of strong spring and summer sales presented us with a challenging quarter, but once again, our team did a great job of positioning the assortments to take advantage of the extended season. The warmer temperatures in early fall did impact late third quarter sales; however, we believe we have the appropriate assortments and marketing plans in place to meet our customers' needs as the winter season progresses."

First Nine Months Results

Net sales increased 11.0% to $4.58 billion from $4.13 billion in the first nine months of 2014. Comparable store sales increased 4.7% versus a 3.2% increase in the first nine months of 2014. Gross profit increased 12.1% to $1.58 billion from $1.41 billion and gross margin increased 30 basis points to 34.5% of sales from 34.2% of sales in the first nine months of 2014.

Selling, general and administrative expenses, including depreciation and amortization, increased 10.6% to $1.10 billion, and decreased as a percent of sales to 24.1% compared to 24.2% for the first nine months of 2014.

Net income increased 15.4% to $298.7 million from $258.8 million and net income per diluted share increased 17.8% to $2.18 from $1.85 for the first nine months of 2014.

The company opened 88 new stores and closed five stores, three of which were Del's stores, in the first nine months of 2015 compared to 85 new store openings and no store closures during the first nine months of 2014.

Fiscal 2015 Outlook

Based upon third quarter results, the Company is tightening its fiscal 2015 guidance ranges as follows:

The Company continues to expect capital expenditures to be consistent with the prior quarter guidance ranging between $220 million and $230 million. Capital expenditures include spending to support approximately 114 new store openings and construction of a new Southwest distribution center in Casa Grande, Arizona which began receiving product in October 2015 and will begin shipping to stores in late 2015.

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