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Tractor Supply Co. Reports $54.8 million Profit in 2Q

BRENTWOOD, Tenn. -- Tractor Supply Co. reported a $54.8 million profit in the second quarter, an increase of 26%. The Brentwood, Tenn.-based retailer said it was able to gain more profits than expected, despite weaker sales at its stores by managing inventory and costs well.

Overall sales increased 5.4% in the second quarter to $946.5 million, Tractor Supply Co. said in a release sent after the stock market closed on July 22.

"We are pleased with our success in driving strong operating performance, which allowed us to achieve higher than expected net income during the quarter," said Jim Wright, chairman and chief executive officer.

Some of the cost management initiatives the company has taken is reallocating money in its advertising budget, Wright said in a conference call with investors on Wednesday afternoon. Wright said the company eliminated its television advertisement spending for the year in part because it hasn't been able to correlate the commercials with increasing sales and bringing customers into the stores.

Despite the increase in profits, the retailer's stores were affected by consumers purchasing fewer big ticket and discretionary products, the company said. Sales at Tractor Supply Stores opened at least a year declined 2.7% in the second quarter, compared to a 3.4% gain a year ago, the company said. Sales of its "core consumables categories" which include animal and pet-related products remained strong, Tractor Supply Co. said.

The company raised its estimates for fiscal 2009, with net sales to range from $3.15 billion to $3.25 billion and same-store sales to range from flat to down two percent. Net income for the year is expected to be $2.78 to $2.92 per diluted share, the company said.

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