Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Jan. 27, 2018 | Jul. 01, 2017 | |
Entity Information [Line Items] | |||
Entity Registrant Name | TRACTOR SUPPLY CO /DE/ | ||
Entity Central Index Key | 916,365 | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,200,000,000 | ||
Entity Common Stock, Shares Outstanding | 125,116,910 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 30, 2017 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 7,256,382 | $ 6,779,579 | $ 6,226,507 |
Cost of merchandise sold | 4,764,417 | 4,454,377 | 4,083,333 |
Gross profit | 2,491,965 | 2,325,202 | 2,143,174 |
Selling, general and administrative expenses | 1,639,749 | 1,488,164 | 1,369,097 |
Depreciation and amortization | 165,834 | 142,958 | 123,569 |
Operating income | 686,382 | 694,080 | 650,508 |
Interest expense, net | 13,859 | 5,810 | 2,891 |
Income before income taxes | 672,523 | 688,270 | 647,617 |
Income tax expense | 249,924 | 251,150 | 237,222 |
Net income | $ 422,599 | $ 437,120 | $ 410,395 |
Net income per share – basic | $ 3.31 | $ 3.29 | $ 3.03 |
Net income per share – diluted | $ 3.30 | $ 3.27 | $ 3 |
Weighted average shares outstanding | |||
Basic | 127,588 | 132,905 | 135,582 |
Diluted | 128,204 | 133,813 | 136,845 |
Dividends declared per common share outstanding | $ 1.05 | $ 0.92 | $ 0.76 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Interest Rate Swap [Abstract] | |||
Net income | $ 422,599 | $ 437,120 | $ 410,395 |
Change in fair value of interest rate swaps, net of taxes | 1,371 | 1,392 | 0 |
Total other comprehensive income | 1,371 | 1,392 | 0 |
Total comprehensive income | $ 423,970 | $ 438,512 | $ 410,395 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 109,148 | $ 53,916 |
Inventories | 1,453,208 | 1,369,656 |
Prepaid expenses and other current assets | 88,252 | 90,557 |
Income taxes receivable | 4,760 | 3,680 |
Total current assets | 1,655,368 | 1,517,809 |
Property and equipment: | ||
Land | 99,336 | 94,940 |
Buildings and improvements | 1,037,730 | 965,582 |
Furniture, fixtures and equipment | 605,957 | 567,653 |
Computer software and hardware | 266,898 | 224,370 |
Construction in progress | 83,816 | 21,320 |
Property and equipment, gross | 2,093,737 | 1,873,865 |
Accumulated depreciation and amortization | (1,049,234) | (911,557) |
Property and equipment, net | 1,044,503 | 962,308 |
Goodwill and other intangible assets | 124,492 | 125,717 |
Deferred income taxes | 18,494 | 45,218 |
Other assets | 25,912 | 23,890 |
Total assets | 2,868,769 | 2,674,942 |
Current liabilities: | ||
Accounts payable | 576,568 | 519,522 |
Accrued employee compensation | 31,673 | 25,246 |
Other accrued expenses | 201,656 | 215,650 |
Current portion of long-term debt | 25,000 | 10,000 |
Current portion of capital lease obligations | 3,545 | 1,294 |
Income taxes payable | 10,772 | 5,482 |
Total current liabilities | 849,214 | 777,194 |
Long-term debt | 401,069 | 263,850 |
Capital lease obligations, less current maturities | 32,617 | 25,919 |
Deferred rent | 105,906 | 100,078 |
Other long-term liabilities | 61,290 | 54,683 |
Total liabilities | 1,450,096 | 1,221,724 |
Stockholders' equity: | ||
Preferred Stock, $1.00 par value; 40 shares authorized; no shares issued | 0 | 0 |
Common Stock, $0.008 par value; 400,000 shares authorized at December 30, 2017 and December 31, 2016; 170,375 shares issued and 125,303 shares outstanding at December 30, 2017 and 169,943 shares issued and 130,795 shares outstanding at December 31, 2016 | 1,363 | 1,360 |
Additional paid-in capital | 716,228 | 671,515 |
Treasury stock, at cost, 45,072 shares at December 30, 2017 and 39,148 shares at December 31, 2016 | (2,130,901) | (1,761,498) |
Accumulated other comprehensive income | 2,763 | 1,392 |
Retained earnings | 2,829,220 | 2,540,449 |
Total stockholders' equity | 1,418,673 | 1,453,218 |
Total liabilities and stockholders' equity | $ 2,868,769 | $ 2,674,942 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred Stock, Shares Authorized | 40 | 40 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, authorized | 400,000 | 400,000 |
Common stock, par value (in dollars per share) | $ 0.008 | $ 0.008 |
Common stock, issued (in shares) | 170,375 | 169,943 |
Common stock, outstanding (in shares) | 125,303 | 130,795 |
Treasury stock, at cost (in shares) | 45,072 | 39,148 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings |
Shares, Outstanding | 136,382 | |||||
Stockholders' equity at Dec. 27, 2014 | $ 1,293,561 | $ 1,342 | $ 510,997 | $ (1,137,085) | $ 0 | $ 1,918,307 |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock under employee stock purchase plan | 4,710 | $ 1 | 4,709 | |||
Issuance of common stock under employee stock purchase plan, shares | 68 | |||||
Exercise of stock options and restricted stock units | 36,979 | $ 9 | 36,970 | |||
Exercise of stock options and restricted stock units, shares | 1,190 | |||||
Share-based compensation | 19,420 | 19,420 | ||||
Tax benefit of stock options exercised | 27,032 | 27,032 | ||||
Repurchase of shares to satisfy tax obligations | (2,997) | |||||
Repurchase of common stock, shares | (3,416) | |||||
Repurchase of common stock | (292,705) | (292,705) | ||||
Dividends paid | (103,101) | (103,101) | ||||
Net income | 410,395 | 410,395 | ||||
Stockholders' equity at Dec. 26, 2015 | 1,393,294 | $ 1,352 | 596,131 | (1,429,790) | 0 | 2,225,601 |
Shares, Outstanding | 134,224 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock under employee stock purchase plan | 4,809 | $ 1 | 4,808 | |||
Issuance of common stock under employee stock purchase plan, shares | 70 | |||||
Exercise of stock options and restricted stock units | 36,201 | $ 7 | 36,194 | |||
Exercise of stock options and restricted stock units, shares | 899 | |||||
Share-based compensation | 23,554 | 23,554 | ||||
Tax benefit of stock options exercised | 11,671 | 11,671 | ||||
Repurchase of shares to satisfy tax obligations | (843) | |||||
Repurchase of common stock, shares | (4,398) | |||||
Repurchase of common stock | (331,708) | (331,708) | ||||
Dividends paid | (122,272) | (122,272) | ||||
Change in fair value of interest rate swap, net of taxes | 1,392 | 1,392 | ||||
Net income | 437,120 | 437,120 | ||||
Stockholders' equity at Dec. 31, 2016 | 1,453,218 | $ 1,360 | 671,515 | (1,761,498) | 1,392 | 2,540,449 |
Shares, Outstanding | 130,795 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock under employee stock purchase plan | 4,283 | $ 1 | 4,282 | |||
Issuance of common stock under employee stock purchase plan, shares | 83 | |||||
Exercise of stock options and restricted stock units | 12,047 | $ 2 | 12,045 | |||
Exercise of stock options and restricted stock units, shares | 349 | |||||
Share-based compensation | 29,202 | 29,202 | ||||
Repurchase of shares to satisfy tax obligations | (816) | |||||
Repurchase of common stock, shares | (5,924) | |||||
Repurchase of common stock | (369,403) | (369,403) | ||||
Dividends paid | (133,828) | (133,828) | ||||
Change in fair value of interest rate swap, net of taxes | 1,371 | 1,371 | ||||
Net income | 422,599 | 422,599 | ||||
Stockholders' equity at Dec. 30, 2017 | $ 1,418,673 | $ 1,363 | $ 716,228 | $ (2,130,901) | $ 2,763 | $ 2,829,220 |
Shares, Outstanding | 125,303 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 422,599 | $ 437,120 | $ 410,395 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 165,834 | 142,958 | 123,569 |
Loss on disposition of property and equipment | 460 | 579 | 315 |
Share-based compensation expense | 29,202 | 23,554 | 19,420 |
Deferred income taxes | 26,724 | 9,976 | (5,450) |
Change in assets and liabilities | |||
Inventories | (83,552) | (67,650) | (168,925) |
Prepaid expenses and other current assets | 2,305 | 1,782 | (21,066) |
Accounts payable | 57,046 | 82,477 | 56,426 |
Accrued employee compensation | 6,427 | (18,237) | 5,628 |
Other accrued expenses | (10,338) | 20,368 | 11,252 |
Income taxes | 4,210 | 11,787 | 16,282 |
Other | 10,533 | 5,997 | 8,366 |
Net cash provided by operating activities | 631,450 | 650,711 | 456,212 |
Cash flows from investing activities: | |||
Capital expenditures | (250,401) | (226,017) | (236,496) |
Proceeds from sale of property and equipment | 11,220 | 362 | 584 |
Acquisition of Petsense, net of cash acquired | 1,225 | 0 | |
Acquisition of Petsense, net of cash acquired | (143,610) | 0 | |
Net cash used in investing activities | (237,956) | (369,265) | (235,912) |
Cash flows from financing activities: | |||
Borrowings under debt facilities | 1,180,000 | 945,000 | 680,000 |
Repayments under debt facilities | (1,027,500) | (820,000) | (530,000) |
Debt issuance costs | (599) | (1,380) | 0 |
Principal payments under capital lease obligations | (2,446) | (1,150) | (507) |
Repurchase of shares to satisfy tax obligations | (816) | (843) | (2,997) |
Repurchase of common stock | (369,403) | (331,708) | (292,705) |
Net proceeds from issuance of common stock | 16,330 | 41,010 | 41,689 |
Cash dividends paid to stockholders | (133,828) | (122,272) | (103,101) |
Net cash used in financing activities | (338,262) | (291,343) | (207,621) |
Net change in cash and cash equivalents | 55,232 | (9,897) | 12,679 |
Cash and cash equivalents at beginning of year | 53,916 | 63,813 | 51,134 |
Cash and cash equivalents at end of year | 109,148 | 53,916 | 63,813 |
Cash paid during the year for: | |||
Interest | 10,481 | 6,124 | 2,283 |
Income taxes | 219,081 | 232,258 | 226,968 |
Supplemental disclosures of non-cash activities [Abstract] | |||
Property and equipment acquired through capital lease | 11,395 | 10,493 | 13,207 |
Non-cash accruals for construction in progress | $ 8,647 | $ 12,303 | $ 16,050 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies: Nature of Business Founded in 1938, Tractor Supply Company (the “Company” or “we”) is the largest operator of rural lifestyle retail stores in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers and ranchers and those who enjoy the rural lifestyle (which we refer to as the “ Out Here ” lifestyle), as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. At December 30, 2017 , the Company operated a total of 1,853 retail stores in 49 states ( 1,685 Tractor Supply and Del’s retail stores and 168 Petsense retail stores) and also offered a number of products online at TractorSupply.com and Petsense.com . Basis of Presentation In the first quarter of fiscal 2017, the Company adopted accounting guidance which affected the presentation in the statement of cash flows of excess tax benefits or deficiencies from the exercise of stock options as discussed in Note 15. The Company has elected to apply the amendments using a retrospective transition method for all periods presented and therefore the presentation of previously reported excess tax benefits on the Consolidated Statements of Cash Flows has been changed to conform to the presentation used in the current period. As a result, $11.7 million and $27.0 million of excess tax benefits related to share-based awards which were previously classified as cash flows from financing activities have been reclassified as cash flows from operating activities in the Consolidated Statement of Cash Flows for the years ended December 31, 2016 , and December 26, 2015 , respectively. Additionally, beginning in fiscal 2017, the Statement of Stockholders’ Equity is no longer impacted by the excess tax benefits or deficiencies from the exercise of stock options. Fiscal Year The Company’s fiscal year includes 52 or 53 weeks and ends on the last Saturday of the calendar year. The fiscal year ended December 30, 2017 consisted of 52 weeks, the fiscal year ended December 31, 2016 consisted of 53 weeks and the fiscal year ended December 26, 2015 consisted of 52 weeks. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Management Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) inherently requires estimates and assumptions by management of the Company that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. Actual results could differ from those estimates. Significant estimates and assumptions by management primarily impact the following key financial statement areas: Inventory Valuation Inventory Impairment Risk The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, historical and expected future sales trends, age of merchandise, overall inventory levels, current cost of inventory and other benchmarks. The Company has established an inventory valuation reserve to recognize the estimated impairment in value (i.e., an inability to realize the full carrying value) based on the Company’s aggregate assessment of these valuation indicators under prevailing market conditions and current merchandising strategies. The Company does not believe its merchandise inventories are subject to significant risk of obsolescence in the near term. However, changes in market conditions or consumer purchasing patterns could result in the need for additional reserves. Shrinkage The Company performs physical inventories at least once a year for each store that has been open more than 12 months, and the Company has established a reserve for estimating inventory shrinkage between physical inventory counts. The reserve is established by assessing the chain-wide average shrinkage experience rate, applied to the related periods’ sales volumes. Such assessments are updated on a regular basis for the most recent individual store experiences. The estimated store inventory shrink rate is based on historical experience. The Company believes historical rates are a reasonably accurate reflection of future trends. Vendor Funding The Company receives funding from substantially all of its significant merchandise vendors, in support of its business initiatives, through a variety of programs and arrangements, including guaranteed vendor support funds (“vendor support”) and volume-based rebate funds (“volume rebates”). The amounts received are subject to terms of vendor agreements, most of which are “evergreen,” reflecting the on-going relationship with our significant merchandise vendors. Certain of the Company’s agreements, primarily volume rebates, are renegotiated annually, based on expected annual purchases of the vendor’s product. Vendor funding is initially deferred as a reduction of the purchase price of inventory, and then recognized as a reduction of cost of merchandise as the related inventory is sold. During interim periods, the amount of vendor support and volume rebates are estimated based upon initial commitments and anticipated purchase levels with applicable vendors. The estimated purchase volume (and related vendor funding) is based on the Company’s current knowledge of inventory levels, sales trends and expected customer demand, as well as planned new store openings and relocations. Although the Company believes it can reasonably estimate purchase volume and related volume rebates at interim periods, it is possible that actual year-end results could be different from previously estimated amounts. Freight The Company incurs various types of transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories (on an aggregate basis) and recognized as a component of cost of merchandise sold as the related inventory is sold. Self-Insurance Reserves The Company self-insures a significant portion of its employee medical insurance, workers’ compensation insurance and general liability (including product liability) insurance plans. The Company has stop-loss insurance policies to protect it from individual losses over specified dollar values. For self-insured employee medical claims, we have a stop loss limit of $300,000 per person per year. Our deductible or self-insured retention, as applicable, for each claim involving workers’ compensation insurance and general liability insurance is limited to $500,000 and our Texas Work Injury Policy is limited to $750,000 . Further, we maintain a commercially reasonable umbrella/excess policy that covers liabilities in excess of the primary insurance policy limits. The full extent of certain claims, especially workers’ compensation and general liability claims, may not become fully determined for several years. Therefore, the Company estimates potential obligations based upon historical claims experience, industry factors, severity factors and other actuarial assumptions. Although the Company believes the reserves established for these obligations are reasonably estimated, any significant change in the number of claims or costs associated with claims made under these plans could have a material effect on the Company’s financial results. At December 30, 2017 , the Company had recorded net insurance reserves of $57.9 million compared to $54.3 million at December 31, 2016 . Sales Tax Audit Reserve A portion of the Company’s sales are to tax-exempt customers, predominantly agricultural-based . The Company obtains exemption information as a necessary part of each tax-exempt transaction. Many of the states in which the Company conducts business will perform audits to verify the Company’s compliance with applicable sales tax laws. The business activities of the Company’s customers and the intended use of the unique products sold by the Company create a challenging and complex tax compliance environment. These circumstances also create some risk that the Company could be challenged as to the accuracy of the Company’s sales tax compliance. The Company reviews past audit experience and assessments with applicable states to continually determine if it has potential exposure for non-compliance. Any estimated liability is based on an initial assessment of compliance risk and historical experience with each state. The Company continually reassesses the exposure based on historical audit results, changes in policies, preliminary and final assessments made by state sales tax auditors and additional documentation that may be provided to reduce the assessment. The reserve for these tax audits can fluctuate depending on numerous factors, including the complexity of agricultural-based exemptions, the ambiguity in state tax regulations, the number of ongoing audits and the length of time required to settle with the state taxing authorities. Tax Contingencies The Company’s income tax returns are periodically audited by U.S. federal and state tax authorities. These audits include questions regarding tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any time, multiple tax years are subject to audit by the various tax authorities. In evaluating the exposures associated with the Company’s various tax filing positions, the Company records a liability for uncertain tax positions taken or expected to be taken in a tax return. A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and fully resolved or clarified. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company adjusts its tax contingencies reserve and income tax provision in the period in which actual results of a settlement with tax authorities differs from the established reserve, the statute of limitations expires for the relevant tax authority to examine the tax position or when more information becomes available. The Company’s tax contingencies reserve contains uncertainties because management is required to make assumptions and apply judgment to estimate the exposures associated with the Company’s various filing positions and whether or not the minimum requirements for recognition of tax benefits have been met. The effective income tax rate is also affected by changes in tax law, the tax jurisdiction of new stores or business ventures, the level of earnings and the results of tax audits. Impairment of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When evaluating long-lived assets for potential impairment, the Company first compares the carrying value of the asset to the asset’s estimated undiscounted future cash flows. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level. The significant assumptions used to determine estimated undiscounted cash flows include cash inflows and outflows directly resulting from the use of those assets in operations, including margin on net sales, payroll and related items, occupancy costs, insurance allocations and other costs to operate a store. If the estimated future cash flows are less than the carrying value of the asset, the Company calculates an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value, which may be based on an estimated future cash flow model. The Company recognizes an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If the Company recognizes an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated (amortized) over the remaining estimated useful life of that asset. No significant impairment charges were recognized in fiscal 2017 , 2016 or 2015 . Impairment charges are included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Income. Impairment of Indefinite-Lived Intangible Assets Goodwill and other indefinite-lived intangible assets are evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In accordance with the accounting standards, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value. The quantitative impairment test for goodwill compares the fair value of a reporting unit with the carrying value of its net assets, including goodwill. If the fair value of the reporting unit is less than the carrying value of the reporting unit, an impairment charge would be recorded to the Company’s operations, for the amount, if any, in which the carrying amount exceeds the reporting unit’s fair value. We determine fair values for each reporting unit using the market approach, when available and appropriate, or the income approach, or a combination of both. If multiple valuation methodologies are used, the results are weighted appropriately. The quantitative impairment test for other indefinite-lived intangible assets involves comparing the carrying amount of the asset to the sum of the discounted cash flows expected to be generated by the asset. If the implied fair value of the indefinite-lived intangible asset is less than the carrying value, an impairment charge would be recorded to the Company’s operations. No significant impairment charges were recognized in fiscal 2017 , 2016 or 2015 . Impairment charges are included in SG&A expenses in the Consolidated Statements of Income. Revenue Recognition and Sales Returns The Company recognizes revenue at the time the customer takes possession of merchandise. If the Company receives payment before completion of its customer obligations (as per the Company’s special order and layaway programs), the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. The Company is required to collect certain taxes and fees from customers on behalf of government agencies and remit such collections to the applicable governmental agency on a periodic basis. These taxes and fees are collected from customers at the time of purchase, but are not included in net sales. The Company records a liability upon collection from the customer and relieves the liability when payments are remitted to the applicable governmental agency. The Company estimates a liability for sales returns based on a rolling average of historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. At December 30, 2017 , the Company had a liability of $3.8 million reserved for sales returns compared to $4.2 million at December 31, 2016 . The Company recognizes revenue when a gift card or merchandise return card is redeemed by the customer and recognizes income when the likelihood of the gift card or merchandise return card being redeemed by the customer is remote (referred to as “breakage”). The gift cards and merchandise return card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift cards and merchandise return cards in proportion to those historical redemption patterns. The Company recognized breakage income of $2.4 million , $1.9 million and $1.6 million in fiscal 2017 , 2016 and 2015 , respectively. Cost of Merchandise Sold Cost of merchandise sold includes the total cost of products sold; freight expenses associated with moving merchandise inventories from vendors to distribution facilities, from distribution facilities to retail stores, from one distribution facility to another, and directly to our customers; vendor support; damaged, junked or defective product; cash discounts from payments to merchandise vendors; and adjustments for shrinkage (physical inventory losses), lower of cost or net realizable value, slow moving product and excess inventory quantities. Selling, General and Administrative Expenses SG&A expenses include payroll and benefit costs for retail, distribution facility and corporate employees; share-based compensation expenses; occupancy costs of retail, distribution and corporate facilities; advertising; tender costs, including bank charges and costs associated with credit and debit card interchange fees; outside service fees; and other administrative costs, such as computer maintenance, supplies, travel and lodging. Advertising Costs Advertising costs consist of expenses incurred in connection with newspaper circulars and customer-targeted direct mail, as well as limited television, radio, digital and social media offerings and other promotions. Costs are expensed when incurred with the exception of television advertising and circular and direct mail promotions, which are expensed upon first showing. Advertising expenses for fiscal 2017 , 2016 and 2015 were approximately $81.3 million , $84.2 million and $73.9 million , respectively. Prepaid advertising costs were approximately $1.1 million and $2.1 million at December 30, 2017 , and December 31, 2016 , respectively. Warehousing and Distribution Facility Costs Costs incurred at the Company’s distribution facilities for receiving, warehousing and preparing product for delivery are expensed as incurred and are included in SG&A expenses in the Consolidated Statements of Income. Because the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Distribution facility costs including depreciation for fiscal 2017 , 2016 and 2015 were approximately $182.1 million , $166.8 million and $145.4 million , respectively. Pre-opening Costs Non-capital expenditures incurred in connection with opening new stores, primarily payroll and rent, are expensed as incurred. Pre-opening costs were approximately $10.8 million , $9.9 million and $9.6 million in fiscal 2017 , 2016 and 2015 , respectively. Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors, which include incentive and non-qualified stock options and restricted stock units. In addition, the Company offers an Employee Stock Purchase Plan (“ESPP”) to most employees that work at least 20 hours per week. The Company estimates the fair value of its stock option awards at the date of grant utilizing a Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. However, key assumptions used in the Black-Scholes model are adjusted to incorporate the unique characteristics of the Company’s stock option awards. Option pricing models and generally accepted valuation techniques require management to make subjective assumptions including expected stock price volatility, expected dividend yield, risk-free interest rate and expected life. The Company relies on historical volatility trends to estimate future volatility assumptions. The risk-free interest rates used were actual U.S. Treasury Constant Maturity rates for bonds matching the expected term of the option on the date of grant. The expected term of the option on the date of grant was estimated based on the Company’s historical experience for similar options. In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of valuation (which is based on historical experience for similar options) is a critical assumption, as it reduces expense ratably over the vesting period. The Company adjusts this estimate periodically, based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. The fair value of the Company’s restricted stock unit awards is the closing price of the Company’s common stock the day preceding the grant date, discounted for the expected dividend yield over the term of the award. The Company believes its estimates are reasonable in the context of historical experience. Future results will depend on, among other matters, levels of share-based compensation granted in the future, actual forfeiture rates and the timing of option exercises. Depreciation and Amortization Depreciation includes expenses related to all retail, distribution facility and corporate assets. Amortization includes expenses related to definite-lived intangible assets. Income Taxes The Company uses the asset and liability method to account for income taxes whereby deferred tax assets and liabilities are determined based on differences between the financial carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are anticipated to be in effect when temporary differences reverse or are settled. The effect of a tax rate change is recognized in the period in which the law is enacted in the provision for income taxes. The Company records a valuation allowance when it is more likely than not that a deferred tax asset will not be realized. Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average diluted shares outstanding. Dilutive shares are computed using the treasury stock method for stock options and restricted stock units. Cash and Cash Equivalents Temporary cash investments, with a maturity of three months or less when purchased, are considered to be cash equivalents. The majority of payments due from banks for customer credit cards are classified as cash and cash equivalents, as they generally settle within 24 - 48 hours. Sales generated through the Company’s private label credit cards are not reflected as accounts receivable. Under an agreement with Citi Cards, a division of Citigroup, consumer and business credit is extended directly to customers by Citigroup. All credit program and related services are performed and controlled directly by Citigroup. Payments due from Citigroup are classified as cash and cash equivalents as they generally settle within 24 - 48 hours. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments and interest rate swaps. Due to their short-term nature, the carrying values of cash and cash equivalents, short-term receivables and trade payables approximate current fair value at each balance sheet date. The Company had $427.5 million in borrowings under our debt facilities (as discussed in Note 5) at December 30, 2017 , and $275.0 million in borrowings as of December 31, 2016 . Based on current market interest rates (Level 2 inputs), the carrying value of our borrowings under our debt facilities approximates fair value for each period reported. The fair value of the Company’s interest rate swaps is determined based on the present value of expected future cash flows using forward rate curves (a Level 2 input). As described in further detail in Note 6, the fair value of the interest rate swaps, excluding accrued interest, was a $5.2 million asset at December 30, 2017 , and was a $2.8 million asset at December 31, 2016 . Derivative Financial Instruments The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards. Inventories Inventories are stated at the lower of cost, as determined by the average cost method, or net realizable value. Inventory cost consists of the direct cost of merchandise including freight. Inventories are net of shrinkage, obsolescence, other valuations and vendor allowances. Property and Equipment Property and equipment are carried at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Improvements to leased premises are amortized using the straight-line method over the initial term of the lease or the useful life of the improvement, whichever is less. The following estimated useful lives are generally applied: Life Buildings 30 – 35 years Leasehold and building improvements 1 – 35 years Furniture, fixtures and equipment 5 – 10 years Computer software and hardware 3 – 5 years The Company entered into agreements with various governmental entities in the states of Kentucky, Georgia and Tennessee to implement tax abatement plans related to its distribution center in Franklin, Kentucky (Simpson County), its distribution center in Macon, Georgia (Bibb County), and its Store Support Center in Brentwood, Tennessee (Williamson County). The tax abatement plans provide for reduction of real property taxes for specified time frames by legally transferring title to its real property in exchange for industrial revenue bonds. This property was then leased back to the Company. No cash was exchanged. The lease payments are equal to the amount of the payments on the bonds. The tax abatement period extends through the term of the lease, which coincides with the maturity date of the bonds. At any time, the Company has the option to purchase the real property by paying off the bonds, plus $1 . The terms and amounts authorized and drawn under each industrial revenue bond agreement are outlined as follows, as of December 30, 2017 : Bond Term Bond Authorized Amount (in millions) Amount Drawn (in millions) Franklin, Kentucky Distribution Center 30 years $54.0 $51.8 Macon, Georgia Distribution Center 15 years $58.0 $49.9 Brentwood, Tennessee Store Support Center 10 years $78.0 $75.3 Due to the form of these transactions, the Company has not recorded the bonds or the lease obligation associated with the sale lease-back transaction. The original cost of the Company’s property and equipment is recorded on the balance sheet and is being depreciated over its estimated useful life. Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to five years. Computer software consists of software developed for internal use and third-party software purchased for internal use. A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software’s functionality or extends its useful life. These costs are included in computer software and hardware in the accompanying Consolidated Balance Sheets. Certain software costs not meeting the criteria for capitalization are expensed as incurred. Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those that are under-performing. The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes. Store closing costs were not significant to the results of operations for any of the fiscal years presented. Leases Assets under capital leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter, and the related charge to operations is included in depreciation expense in the Consolidated Statements of Income. Certain operating leases include rent increases during the lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the expense charged to operations and amounts paid as a deferred rent liability. The Company occasionally receives reimbursements from landlords to be used towards improving the related store to be leased. Leasehold improvements are recorded at their gross costs, including items reimbursed by landlords. Related reimbursements are deferred and amortized on a straight-line basis as a reduction of rent expense over the applicable lease term. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 30, 2017 | |
Share-based Compensation [Abstract] | |
Share-based compensation expense | Share-Based Compensation: Share-based compensation includes stock option and restricted stock unit awards and certain transactions under the Company’s ESPP. Share-based compensation expense is recognized based on the grant date fair value of all stock option and restricted stock unit awards plus a discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the purchase date market value and the employee’s purchase price. There were no significant modifications to the Company’s share-based compensation plans during fiscal 2017 . At December 30, 2017 , the Company had approximately 2.3 million shares available for future equity awards under the Company’s 2009 Stock Incentive Plan. Share-based compensation expense, including changes in expense for modifications of awards, was $29.2 million , $23.6 million and $19.4 million for fiscal 2017 , 2016 and 2015 , respectively. Stock Options Under the Company’s 2009 Stock Incentive Plan, options may be granted to current or prospective officers or employees, non-employee directors and consultants. The per share exercise price of options granted shall not be less than the fair market value of the stock on the date of grant and such options will expire no later than ten years from the date of grant. Vesting of options commences at various anniversary dates following the dates of grant. The fair value is separately estimated for each option grant. The fair value of each option is recognized as compensation expense ratably over the vesting period. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying a Black-Scholes pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The ranges of key assumptions used in determining the fair value of options granted during fiscal 2017 , 2016 and 2015 , as well as a summary of the methodology applied to develop each assumption, are as follows: Fiscal Year 2017 2016 2015 Expected price volatility 25.1 - 26.0% 25.5 - 27.9% 27.3 – 28.8% Risk-free interest rate 1.7 - 1.9% 0.9 - 1.3% 1.2 – 1.5% Weighted average expected lives (in years) 4.4 4.4 4.5 Forfeiture rate 7.2 % 7.1 % 6.9% Dividend yield 1.3 % 0.9 % 1.0% Expected Price Volatility — This is a measure of the amount by which a price has fluctuated or is expected to fluctuate. The Company applies a historical volatility rate. To calculate historical changes in market value, the Company uses daily market value changes from the date of grant over a past period generally representative of the expected life of the options to determine volatility. The Company believes the use of historical price volatility provides an appropriate indicator of future volatility. An increase in the expected volatility will increase compensation expense. Risk-Free Interest Rate — This is the U.S. Treasury Constant Maturity rate over a term equal to the expected life of the option. An increase in the risk-free interest rate will increase compensation expense. Weighted Average Expected Lives — This is the period of time over which the options granted are expected to remain outstanding and is based on historical experience. Options granted generally have a maximum term of ten years. An increase in the expected life will increase compensation expense. Forfeiture Rate — This is the estimated percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. This estimate is based on historical experience. An increase in the forfeiture rate will decrease compensation expense. Dividend Yield —This is the estimated dividend yield for the weighted average expected life of the option granted. An increase in the dividend yield will decrease compensation expense. The Company issues shares for options when exercised. A summary of stock option activity is as follows: Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( in thousands) Outstanding December 27, 2014 4,083,426 $ 41.93 7.2 $ 146,967 Granted 1,080,490 83.70 $ 19.53 Exercised (1,116,828 ) 33.11 Canceled (185,582 ) 67.28 Outstanding December 26, 2015 3,861,506 $ 54.95 7.1 $ 119,050 Granted 1,150,941 86.05 $ 19.27 Exercised (851,118 ) 42.53 Canceled (187,582 ) 80.01 Outstanding December 31, 2016 3,973,747 $ 65.43 6.9 $ 59,601 Granted 1,625,140 72.11 $ 14.56 Exercised (309,904 ) 38.87 Canceled (290,457 ) 79.08 Outstanding December 30, 2017 4,998,526 $ 68.46 6.9 $ 50,145 Exercisable at December 30, 2017 2,582,283 $ 60.46 5.3 $ 45,939 The aggregate intrinsic values in the table above represent the total difference between the Company’s closing stock price at each year-end and the option exercise price, multiplied by the number of in-the-money options at each year-end. As of December 30, 2017 , total unrecognized compensation expense related to non-vested stock options was approximately $19.8 million with a weighted average expense recognition period of 1.9 years. There were no material modifications to options in fiscal 2017 , 2016 or 2015 . Other information relative to option activity during fiscal 2017 , 2016 and 2015 is as follows (in thousands): 2017 2016 2015 Total fair value of stock options vested $ 15,996 $ 15,184 $ 13,207 Total intrinsic value of stock options exercised $ 9,237 $ 39,696 $ 60,082 Restricted Stock Units The Company issues shares for restricted stock unit awards once vesting occurs and related restrictions lapse. The units vest over a one to four -year term; some plan participants have elected to defer receipt of shares of common stock upon vesting of restricted stock units, and as a result, shares are not issued until a later date. The status of restricted stock units is presented below: Restricted Stock Units Shares Weighted Average Grant Date Fair Value Restricted at December 27, 2014 277,347 $ 42.64 Granted 56,052 84.86 Exercised (107,548 ) 25.97 Forfeited (6,234 ) 63.57 Restricted at December 26, 2015 219,617 $ 60.99 Granted 59,586 83.22 Exercised (58,503 ) 52.51 Forfeited (26,669 ) 76.51 Restricted at December 31, 2016 194,031 $ 68.04 Granted 85,049 66.34 Exercised (51,069 ) 64.64 Forfeited (4,781 ) 79.65 Restricted at December 30, 2017 223,230 $ 67.92 Other information relative to restricted stock unit activity during fiscal 2017 , 2016 and 2015 is as follows (in thousands): 2017 2016 2015 Total grant date fair value of restricted stock units vested and issued $ 3,301 $ 3,072 $ 2,793 Total intrinsic value of restricted stock units vested and issued $ 3,465 $ 5,104 $ 9,139 For the majority of restricted stock units granted, the number of shares issued on the date the restricted stock units vest is net of shares withheld by the Company for the minimum statutory tax withholding requirements, which the Company pays on behalf of its employees. The Company issued 39,314 , 48,267 and 72,206 shares as a result of vested restricted stock units during fiscal 2017 , 2016 and 2015 , respectively. Although shares withheld are not issued, they are treated similar to common stock repurchases as they reduce the number of shares that would have been issued upon vesting. The amounts are net of 11,755 , 10,236 and 35,342 shares withheld to satisfy $0.8 million of employees’ tax obligations during both fiscal 2017 and 2016 , and $3.0 million during fiscal 2015 . There were no material modifications to restricted stock units in fiscal 2017 , 2016 or 2015 . As of December 30, 2017 , total unrecognized compensation expense related to non-vested restricted stock units was approximately $4.3 million with a weighted average expense recognition period of 1.6 years. Employee Stock Purchase Plan The ESPP provides Company employees the opportunity to purchase, through payroll deductions, shares of common stock at a 15% discount. Pursuant to the terms of the ESPP, the Company issued 83,155 , 69,562 and 68,428 shares of common stock during fiscal 2017 , 2016 and 2015 , respectively. The total cost related to the ESPP, including the compensation expense calculations, was approximately $1.0 million in fiscal 2017 and $1.1 million in both fiscal 2016 and 2015 . There is a maximum of 16.0 million shares of common stock that are reserved under the ESPP. At December 30, 2017 , there were approximately 12.0 million remaining shares of common stock reserved for future issuance under the ESPP. |
Acquisition of Petsense
Acquisition of Petsense | 12 Months Ended |
Dec. 30, 2017 | |
Acquisition of Petsense [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisition of Petsense: On September 29, 2016 , the Company completed the acquisition of Petsense. Headquartered in Scottsdale, Arizona, Petsense is a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of pet products and services. Pursuant to the agreement governing the transaction, the Company acquired all the outstanding equity interests in Petsense for an all-cash purchase price which was financed with cash on-hand and revolver borrowings under the 2016 Senior Credit Facility (as defined in Note 5). The total consideration transferred in connection with the Petsense acquisition has been allocated to the assets acquired and liabilities assumed based upon their respective fair values. The fair value of the assets acquired and liabilities assumed is estimated based on either one or a combination of the following methodologies: the income approach, the cost approach or the market approach as determined based on the nature of the asset or liability and the level of inputs available. With respect to assets and liabilities, the determination of fair value requires management to make subjective judgments as to projections of future operating performance, the appropriate discount rate to apply, long-term growth rates, etc. (i.e. unobservable inputs classified as Level 3 inputs under the fair value hierarchy), which affect the amounts recorded in the purchase price allocation. The excess of the consideration transferred over the fair value of the identifiable assets, net of liabilities, is recorded as goodwill, which is indicative of the expected continued growth and development of the pet specialty retail business acquired. The table below summarizes the consideration transferred and allocation of the purchase price for the Petsense acquisition (in thousands): Consideration transferred $ 144,476 Assets acquired: Current assets $ 21,875 Property and equipment 25,519 Other intangible assets - tradename 31,300 Other assets 428 Liabilities assumed: Current liabilities (12,091 ) Long-term liabilities (5,489 ) Total identifiable net assets acquired 61,542 Excess of consideration transferred over identifiable net assets acquired (goodwill) $ 82,934 In September 2017, the Company finalized the working capital settlement pursuant to the agreement governing the transaction. As a result, the values of the consideration transferred, assets acquired and liabilities assumed as reflected in the table above are considered final. The working capital settlement reduced both the consideration transferred and goodwill by $1.2 million from the preliminary values. The resulting goodwill of $ 82.9 million and tradename of $ 31.3 million are amortized for income tax purposes. The results of operations of Petsense have been included in the Consolidated Financial Statements since the date of acquisition. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Other Intangible Assets: Goodwill The Company had approximately $ 93.2 million and $94.4 million of goodwill at December 30, 2017 and December 31, 2016 , respectively. The changes in the carrying amount of goodwill for the years ended December 30, 2017 and December 31, 2016 are as follows (in thousands): 2017 2016 Balance, beginning of year $ 94,417 $ 10,258 Goodwill acquired as part of acquisition — 84,159 Working capital settlement (1,225 ) — Impairment loss — — Balance, end of year $ 93,192 $ 94,417 Goodwill is allocated to each identified reporting unit, which is defined as an operating segment or one level below the operating segment. Goodwill is not amortized, but is evaluated for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company completes its impairment evaluation by performing valuation analyses and considering other publicly available market information, as appropriate. The test used to identify the potential for goodwill impairment compares the fair value of a reporting unit with its carrying value. An impairment charge would be recorded to the Company’s operations for the amount, if any, in which the carrying value exceeds the fair value. In the fourth quarter of fiscal 2017 , the Company completed its annual impairment testing of goodwill and no impairment was identified. The Company determined that the fair value of each reporting unit (including goodwill) was in excess of the carrying value of the respective reporting unit. In reaching this conclusion, the fair value of each reporting unit was determined based on either a market or an income approach. Under the market approach, the fair value is based on observed market data. Other Intangible Assets The Company had approximately $ 31.3 million of intangible assets other than goodwill at December 30, 2017 and December 31, 2016 . The intangible asset balance represents the estimated fair value of the Petsense tradename, which is not subject to amortization as it has an indefinite useful life on the basis that it is expected to contribute cash flows beyond the foreseeable horizon. With respect to intangible assets, we evaluate for impairment annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We recognize an impairment loss only if the carrying amount is not recoverable through its discounted cash flows and measure the impairment loss based on the difference between the carrying value and fair value. In the fourth quarter of fiscal 2017 , the Company completed its annual impairment testing of intangible assets and no impairment was identified. |
Debt
Debt | 12 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt: The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): December 30, December 31, Senior Notes $ 150.0 $ — Senior Credit Facility: February 2016 Term Loan 180.0 190.0 June 2017 Term Loan 97.5 — Revolving credit loans — 85.0 Total outstanding borrowings 427.5 275.0 Less: unamortized debt issuance costs (1.4 ) (1.1 ) Total debt 426.1 273.9 Less: current portion of long-term debt (25.0 ) (10.0 ) Long-term debt $ 401.1 $ 263.9 Outstanding letters of credit $ 39.6 $ 44.3 Senior Notes On August 14, 2017, the Company entered into a note purchase and private shelf agreement (the “Note Purchase Agreement”), pursuant to which the Company agreed to sell $150 million aggregate principal amount of senior unsecured notes due August 14, 2029 (the “2029 Notes”) in a private placement. The 2029 Notes bear interest at 3.70% per annum with interest payable semi-annually in arrears on each annual and semi-annual anniversary of the issuance date. The obligations under the Note Purchase Agreement are unsecured, but guaranteed by each of the Company’s material subsidiaries. The Company may from time to time issue and sell additional senior unsecured notes (the “Shelf Notes”) pursuant to the Note Purchase Agreement, in an aggregate principal amount of up to $150 million . The Shelf Notes will have a maturity date of no more than 12 years after the date of original issuance and may be issued through August 14, 2020 , unless earlier terminated in accordance with the terms of the Note Purchase Agreement. Pursuant to the Note Purchase Agreement, the 2029 Notes and any Shelf Notes (collectively, the "Notes") are redeemable by the Company, in whole at any time or in part from time to time, at 100% of the principal amount of the Notes being redeemed, together with accrued and unpaid interest thereon and a make whole amount calculated by discounting all remaining scheduled payments on the Notes by the yield on the U.S. Treasury security with a maturity equal to the remaining average life of the Notes plus 0.50% . Senior Credit Facility On February 19, 2016, the Company entered into a senior credit facility (the “2016 Senior Credit Facility”) consisting of a $200 million term loan (the “February 2016 Term Loan”) and a $500 million revolving credit facility (the “Revolver”) with a sublimit of $50 million for swingline loans. This agreement is unsecured. On February 16, 2018, the maturity date was extended from February 19, 2021 to February 19, 2022. On June 15, 2017, pursuant to an accordion feature available under the 2016 Senior Credit Facility, the Company entered into an incremental term loan agreement (the “June 2017 Term Loan”) which increased the term loan capacity under the 2016 Senior Credit Facility by $100 million . This agreement is unsecured and matures on June 15, 2022 . The February 2016 Term Loan of $200 million requires quarterly payments totaling $10 million per year in years one and two and $20 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of February 19, 2022 . The June 2017 Term Loan of $100 million requires quarterly payments totaling $5 million per year in years one and two and $10 million per year in years three through the maturity date, with the remaining balance due in full on the maturity date of June 15, 2022 . The 2016 Senior Credit Facility also contains a $500 million revolving credit facility (with a sublimit of $50 million for swingline loans). Borrowings under the February 2016 Term Loan and Revolver bear interest at either the bank’s base rate ( 4.500% at December 30, 2017 ) or the London Inter-Bank Offer Rate (“LIBOR”) ( 1.564% at December 30, 2017 ) plus an additional amount ranging from 0.500% to 1.125% per annum ( 0.750% at December 30, 2017 ), adjusted quarterly based on our leverage ratio. The Company is also required to pay, quarterly in arrears, a commitment fee for unused capacity ranging from 0.075% to 0.200% per annum ( 0.125% at December 30, 2017 ), adjusted quarterly based on the Company’s leverage ratio. Borrowings under the June 2017 Term Loan bear interest at either the bank’s base rate ( 4.500% at December 30, 2017 ) or LIBOR ( 1.564% at December 30, 2017 ) plus an additional 1.000% per annum. As further described in Note 6, the Company has entered into interest rate swap agreements in order to hedge our exposure to variable rate interest payments associated with each of the term loans under the 2016 Senior Credit Facility. Proceeds from the 2016 Senior Credit Facility may be used for working capital, capital expenditures, dividends, share repurchases, and other matters. There are no compensating balance requirements associated with the 2016 Senior Credit Facility. Covenants and Default Provisions of the Debt Agreements The 2016 Senior Credit Facility and the Note Purchase Agreement (collectively, the “Debt Agreements”) require quarterly compliance with respect to two material covenants: a fixed charge coverage ratio and a leverage ratio. Both ratios are calculated on a trailing twelve-month basis at the end of each fiscal quarter. The fixed charge coverage ratio compares earnings before interest, taxes, depreciation, amortization, share-based compensation and rent expense (“consolidated EBITDAR”) to the sum of interest paid and rental expense (excluding any straight-line rent adjustments). The fixed charge coverage ratio shall be greater than or equal to 2.00 to 1.0 as of the last day of each fiscal quarter. The leverage ratio compares rental expense (excluding any straight-line rent adjustments) multiplied by a factor of six plus total debt to consolidated EBITDAR. The leverage ratio shall be less than or equal to 4.00 to 1.0 as of the last day of each fiscal quarter. The Debt Agreements also contain certain other restrictions regarding additional indebtedness, capital expenditures, business operations, guarantees, investments, mergers, consolidations and sales of assets, transactions with subsidiaries or affiliates, and liens. As of December 30, 2017 , the Company was in compliance with all debt covenants. The Debt Agreements contain customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, certain events of bankruptcy and insolvency, material judgments, certain ERISA events and invalidity of loan documents. Upon certain changes of control, payment under the Debt Agreements could become due and payable. In addition, under the Note Purchase Agreement, upon an event of default or change of control, the make whole payment described above may become due and payable. The Note Purchase Agreement also requires that, in the event the Company amends its 2016 Senior Credit Facility, or any subsequent credit facility of $100 million or greater, such that it contains covenant or default provisions that are not provided in the Note Purchase Agreement or that are similar to those contained in the Note Purchase Agreement but which contain percentages, amounts, formulas or grace periods that are more restrictive than those set forth in the Note Purchase Agreement or are otherwise more beneficial to the lenders thereunder, the Note Purchase Agreement shall be automatically amended to include such additional or amended covenants and/or default provisions. |
Interest Rate Swaps
Interest Rate Swaps | 12 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps | Interest Rate Swaps: The Company entered into an interest rate swap agreement which became effective on March 31, 2016 , with a maturity date of February 19, 2021 . The notional amount of this swap agreement began at $197.5 million (the principal amount of the February 2016 Term Loan borrowings as of March 31, 2016) and will amortize at the same time and in the same amount as the February 2016 Term Loan borrowings as described in Note 5, up to the maturity date of the interest rate swap agreement on February 19, 2021. As of December 30, 2017 , the notional amount of the interest rate swap was $180.0 million . The Company entered into a second interest rate swap agreement which became effective on June 30, 2017 , with a maturity date of June 15, 2022 . The notional amount of this swap agreement began at $100 million (the principal amount of the June 2017 Term Loan borrowings as of June 30, 2017) and will amortize at the same time and in the same amount as the June 2017 Term Loan borrowings as described in Note 5. As of December 30, 2017 , the notional amount of the interest rate swap was $97.5 million . The Company’s interest rate swap agreements are executed for risk management and are not held for trading purposes. The objective of the interest rate swap agreements is to mitigate interest rate risk associated with future changes in interest rates. To accomplish this objective, the interest rate swap agreements are intended to hedge the variable cash flows associated with the variable rate term loan borrowings under the 2016 Senior Credit Facility. Both interest rate swap agreements entitle the Company to receive, at specified intervals, a variable rate of interest based on LIBOR in exchange for the payment of a fixed rate of interest throughout the life of the agreement, without exchange of the underlying notional amount. The Company has designated its interest rate swap agreements as cash flow hedges and accounts for the underlying activity in accordance with hedge accounting. The interest rate swaps are presented within the consolidated balance sheets at fair value. In accordance with hedge accounting, the effective portion of gains and losses on interest rate swaps that are designated and qualify as cash flow hedges are recorded as a component of Other Comprehensive Income (Loss) (“OCI” or “OCL”, respectively) and reclassified into earnings in the period during which the hedged transactions affect earnings. The ineffective portion of gains and losses on interest rate swaps, if any, are recognized in current earnings. The assets and liabilities measured at fair value related to the Company’s interest rate swaps, excluding accrued interest, were as follows (in thousands): Balance Sheet Location 2017 2016 Interest rate swaps (short-term portion) Other current assets / (Other accrued expenses) $ 900 $ (398 ) Interest rate swaps (long-term portion) Other assets 4,252 3,215 Total net assets $ 5,152 $ 2,817 The offset to the interest rate swap asset or liability is recorded as a component of equity, net of deferred taxes, in Accumulated Other Comprehensive Income (Loss) (“AOCI” or “AOCL,” respectively), and will be reclassified into earnings over the term of the underlying debt as interest payments are made. The following table summarizes the changes in AOCI/AOCL, net of tax, related to the Company’s interest rate swaps (in thousands): 2017 2016 Beginning fiscal year AOCI balance $ 1,392 $ — Current fiscal period gain recognized in OCI 1,371 1,392 Amounts reclassified from AOCI (AOCL) into current fiscal period earnings — — Other comprehensive gain, net of tax 1,371 1,392 Ending fiscal period AOCI balance $ 2,763 $ 1,392 As of December 30, 2017 , the estimated pre-tax portion of AOCI that is expected to be reclassified into earnings over the next twelve months is $0.9 million . Cash flows related to the interest rate swaps are included in operating activities on the consolidated statements of cash flows. The following table summarizes the impact of pre-tax gains and losses derived from the Company’s interest rate swaps (in thousands): Financial Statement Location 2017 2016 2015 Effective portion of gains recognized in OCI during the period Other comprehensive income $ 2,240 $ 2,283 $ — Amounts reclassified from AOCI (AOCL) into earnings Interest expense, net — — — Ineffective portion of gains recognized in earnings during the period Interest expense, net 95 534 — The following table summarizes the impact of taxes affecting AOCI/AOCL as a result of the Company’s interest rate swaps (in thousands): 2017 2016 Income tax expense of interest rate swaps on AOCI $ 869 $ 891 Credit-risk-related contingent features In accordance with the underlying interest rate swap agreements, the Company could be declared in default on its interest rate swap obligations if repayment of the underlying indebtedness (i.e., the Company’s term loan) is accelerated by the lender due to the Company's default on such indebtedness. If the Company had breached any of the provisions in the underlying agreements at December 30, 2017 , it could have been required to post full collateral or settle its obligations under the Company’s interest rate swap agreements. However, as of December 30, 2017 , the Company had not breached any of these provisions or posted any collateral related to the underlying interest rate swap agreements. Further, as of December 30, 2017 , the net balance of each of the Company’s interest rate swaps were in a net asset position and therefore the Company would have no obligation upon default. |
Leases
Leases | 12 Months Ended |
Dec. 30, 2017 | |
Leases [Abstract] | |
Leases | Leases: The Company leases the majority of its retail store locations, two distribution sites, its Merchandise Innovation Center, transportation equipment and other equipment under various non-cancellable operating leases. The leases have varying terms and expire at various dates through 2037 . Store leases typically have initial terms of between 10 and 15 years, with two to four optional renewal periods of five years each. Some leases require the payment of contingent rent that is based upon store sales above agreed-upon sales levels for the year. The sales levels vary for each store and are established in the lease agreements. Generally, most of the leases also require that the Company pays associated taxes, insurance and maintenance costs. Total rent expense for fiscal 2017 , 2016 and 2015 was approximately $319.5 million , $293.0 million and $262.1 million , respectively. Total contingent rent expense for fiscal 2017 , 2016 and 2015 was insignificant. Future minimum payments, by year and in the aggregate, under leases with initial or remaining terms of one year or more consist of the following (in thousands): Capital Leases Operating Leases 2018 $ 5,201 $ 324,813 2019 5,215 315,062 2020 5,234 296,773 2021 5,294 273,932 2022 4,172 251,059 Thereafter 23,149 1,219,048 Total minimum lease payments 48,265 $ 2,680,687 Amount representing interest (12,103 ) Present value of minimum lease payments 36,162 Less: current portion (3,545 ) Long-term capital lease obligations $ 32,617 Assets under capital leases were as follows (in thousands): 2017 2016 Building and improvements, gross $ 29,324 $ 29,324 Computer software and hardware 11,388 — Less: accumulated depreciation and amortization (6,462 ) (3,381 ) Assets under capital lease, net $ 34,250 $ 25,943 |
Capital Stock and Dividends
Capital Stock and Dividends | 12 Months Ended |
Dec. 30, 2017 | |
Equity [Abstract] | |
Capital Stock and Dividends | Capital Stock and Dividends: Capital Stock The authorized capital stock of the Company consists of common stock and preferred stock. The Company is authorized to issue 400 million shares of common stock. The Company is also authorized to issue 40,000 shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Board of Directors. Dividends During fiscal 2017 and 2016 , the Company’s Board of Directors declared the following cash dividends: Date Declared Dividend Amount Per Share Stockholders of Record Date Date Paid November 6, 2017 $0.27 November 20, 2017 December 5, 2017 August 7, 2017 $0.27 August 21, 2017 September 6, 2017 May 8, 2017 $0.27 May 22, 2017 June 6, 2017 February 8, 2017 $0.24 February 27, 2017 March 14, 2017 October 31, 2016 $0.24 November 14, 2016 November 29, 2016 August 1, 2016 $0.24 August 15, 2016 August 30, 2016 May 2, 2016 $0.24 May 16, 2016 June 1, 2016 February 3, 2016 $0.20 February 22, 2016 March 8, 2016 It is the present intention of the Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Board of Directors in its sole discretion and will depend upon the earnings, financial condition and capital needs of the Company, as well as other factors which the Board of Directors deem relevant. On February 7, 2018 , the Company’s Board of Directors declared a quarterly cash dividend of $0.27 per share of common stock. The dividend will be paid on March 13, 2018 , to stockholders of record as of the close of business on February 26, 2018 . |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 30, 2017 | |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | |
Treasury Stock | Treasury Stock: The Company’s Board of Directors has authorized common stock repurchases under a share repurchase program of up to $3 billion , exclusive of any fees, commissions or other expenses related to such repurchases through December 31, 2020 . The repurchases may be made from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. Repurchased shares are accounted for at cost and will be held in treasury for future issuance. The program may be limited or terminated at any time without prior notice. The Company repurchased approximately 5.9 million , 4.4 million and 3.4 million shares of common stock under the share repurchase program at a total cost of $369.4 million , $331.7 million and $292.7 million in fiscal 2017 , 2016 and 2015 , respectively. As of December 30, 2017 , the Company had remaining authorization under the share repurchase program of $0.9 billion , exclusive of any fees, commissions or other expenses. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share: Net income per share is calculated as follows (in thousands, except per share amounts): 2017 Net Income Shares Per Share Amount Basic net income per share $ 422,599 127,588 $ 3.31 Dilutive stock options and restricted stock units outstanding — 616 (0.01 ) Diluted net income per share $ 422,599 128,204 $ 3.30 2016 Net Income Shares Per Share Amount Basic net income per share $ 437,120 132,905 $ 3.29 Dilutive stock options and restricted stock units outstanding — 908 (0.02 ) Diluted net income per share $ 437,120 133,813 $ 3.27 2015 Net Income Shares Per Share Amount Basic net income per share $ 410,395 135,582 $ 3.03 Dilutive stock options and restricted stock units outstanding — 1,263 (0.03 ) Diluted net income per share $ 410,395 136,845 $ 3.00 Anti-dilutive stock options excluded from the above calculations totaled approximately 3.9 million , 1.9 million and 0.9 million in fiscal 2017 , 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The provision for income taxes consists of the following (in thousands): 2017 2016 2015 Current tax expense: Federal $ 207,986 $ 221,207 $ 225,253 State 14,516 20,858 17,419 Total current 222,502 242,065 242,672 Deferred tax expense (benefit): Federal 22,469 12,256 (7,017 ) State 4,953 (3,171 ) 1,567 Total deferred 27,422 9,085 (5,450 ) Total provision $ 249,924 $ 251,150 $ 237,222 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities are as follows (in thousands): 2017 2016 Tax assets: Inventory valuation $ 13,029 $ 19,713 Accrued employee benefits costs 7,092 14,120 Accrued sales tax audit reserve 3,479 4,317 Rent expenses in excess of cash payments required 24,728 35,391 Deferred compensation 20,299 23,978 Workers’ compensation insurance 9,153 13,565 General liability insurance 4,265 5,332 Lease exit obligations 1,829 2,617 Income tax credits 4,206 4,265 Other 6,997 7,311 95,077 130,609 Tax liabilities: Inventory basis difference (4,141 ) (4,600 ) Prepaid expenses (1,423 ) (2,912 ) Depreciation (65,650 ) (73,336 ) Amortization (3,818 ) (2,419 ) Other (1,551 ) (2,124 ) (76,583 ) (85,391 ) Net deferred tax asset $ 18,494 $ 45,218 On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Under the provisions of the Act, the U.S. corporate income tax rate decreased from 35% to 21% effective for tax years beginning after December 31, 2017. This change required the Company to remeasure our deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which generally is 21% for federal income tax purposes. We have made a reasonable estimate of the effects on our existing deferred tax balances as of December 30, 2017, and recognized a provisional expense amount of $4.9 million , which is included as a component of income tax expense from continuing operations. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances. We will recognize any changes to this provisional amount as we refine our estimates of our cumulative temporary differences as well as interpretations of the application of the Act. The Company has evaluated the need for a valuation allowance for all or a portion of the deferred tax assets. The Company believes that all of the deferred tax assets will more likely than not be realized through future earnings. The Company had state tax credit carryforwards of $5.1 million and $7.5 million as of December 30, 2017 and December 31, 2016 , respectively, with varying dates of expiration between 2017 and 2030. The Company provided no valuation allowance as of December 30, 2017 and December 31, 2016 for state tax credit carryforwards, as the Company believes it is more likely than not that all of these credits will be utilized before their expiration dates. A reconciliation of the provision for income taxes to the amounts computed at the federal statutory rate is as follows (in thousands): 2017 2016 2015 Tax provision at statutory rate $ 235,383 $ 240,894 $ 226,666 Tax effect of: State income taxes, net of federal tax benefits 14,320 15,527 13,976 Tax credits, net of federal tax benefits (5,060 ) (7,227 ) (3,763 ) Stock-based compensation programs (1,040 ) — — Enactment of tax legislation 4,856 — — Other 1,465 1,956 343 Total income tax expense $ 249,924 $ 251,150 $ 237,222 The Company and its affiliates file income tax returns in the U.S. and various state and local jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years before 2012. Various states have completed an examination of our income tax returns for 2011 through 2014 with minimal adjustments. The total amount of unrecognized tax positions that, if recognized, would decrease the effective tax rate, is $1.7 million at December 30, 2017 . In addition, the Company recognizes current interest and penalties accrued related to these uncertain tax positions as interest expense, and the amount is not material to the Consolidated Statements of Income. The Company has considered the reasonably possible expected net change in uncertain tax positions during the next 12 months and does not expect any material changes to our liability for uncertain tax positions through December 29, 2018. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (exclusive of interest and penalties) is as follows (in thousands): 2017 2016 2015 Balance at beginning of year $ 1,579 $ 2,922 $ 3,500 Additions based on tax positions related to the current year 527 460 869 Additions for tax positions of prior years 14 139 — Reductions for tax positions of prior years (127 ) (1,829 ) (1,447 ) Reductions due to audit results — (113 ) — Balance at end of year $ 1,993 $ 1,579 $ 2,922 |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefit Plans | Retirement Benefit Plans: The Company has a defined contribution benefit plan, the Tractor Supply Company 401(k) Retirement Savings Plan (the “401(k) Plan”), which provides retirement benefits for eligible employees. The Company matches (in cash) 100% of the employee’s elective contributions up to 3% of eligible compensation plus 50% of the employee’s elective contributions from 3% to 6% of eligible compensation. In no event shall the total Company match made on behalf of the employee exceed 4.5% of the employee’s eligible compensation. All current contributions are immediately vested. Company contributions to the 401(k) Plan during fiscal 2017 , 2016 and 2015 , were approximately $7.4 million , $6.6 million and $5.9 million , respectively. The Company offers, through a deferred compensation program, the opportunity for certain qualifying employees to elect to defer a portion of their annual base salary and/or their annual incentive bonus. Under the deferred compensation program, a percentage of the participants’ salary deferral is matched by the Company, limited to a maximum annual matching contribution of $4,500 . The Company’s contributions, including accrued interest, during fiscal 2017 , 2016 and 2015 , were $0.5 million , $0.6 million and $0.5 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies: Construction and Real Estate Commitments At December 30, 2017 , the Company had contractual commitments of approximately $ 55 million related to the ongoing construction of its new distribution center in Frankfort, New York, and the expansion of its existing distribution center in Waverly, Nebraska. There were no material commitments related to construction projects extending greater than twelve months. Letters of Credit At December 30, 2017 , there were $39.6 million outstanding letters of credit under the 2016 Senior Credit Facility. Litigation Item 103 of SEC Regulation S-K requires disclosure of certain environmental legal proceedings if the proceeding reasonably involves potential monetary sanctions of $100,000 or more. We periodically receive information requests and notices of potential noncompliance with environmental laws and regulations from governmental agencies, which are addressed on a case-by-case basis with the relevant agency. The Company received a subpoena from the District Attorney of Yolo County, California, requesting records and information regarding its hazardous waste management and disposal practices in California. The Company and the Office of the District Attorney of Yolo County engaged in settlement discussions which resulted in the settlement of the matter. A consent decree reflecting the terms of settlement was filed with the Yolo County Superior Court on June 23, 2017. Under the settlement, the Company agreed to a compliance plan and also agreed to pay a civil penalty and fund supplemental environmental projects furthering consumer protection and environmental enforcement in California. The civil penalty did not differ materially from the amount accrued. The cost of the settlement and the compliance with the consent decree will not have a material effect on our consolidated financial position, results of operations or cash flows. The Company is also involved in various litigation matters arising in the ordinary course of business. The Company believes that any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable. Accordingly, the Company currently expects these matters will be resolved without material adverse effect on its consolidated financial position, results of operations or cash flows. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting: The Company has one reportable segment which is the retail sale of products that support the rural lifestyle. The following table indicates the percentage of net sales represented by each major product category during fiscal 2017 , 2016 , and 2015 : Percent of Net Sales Product Category: 2017 2016 2015 Livestock and Pet 47 % 46 % 44 % Hardware, Tools and Truck 22 22 23 Seasonal, Gift and Toy Products 19 19 20 Clothing and Footwear 8 8 8 Agriculture 4 5 5 Total 100 % 100 % 100 % |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New accounting pronouncements, policy | New Accounting Pronouncements: New Accounting Pronouncements Recently Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory.” This update requires an entity that determines the cost of inventory by methods other than last-in, first-out and the retail inventory method to measure inventory at the lower of cost and net realizable value. The Company adopted this guidance in the first quarter of fiscal 2017 using a prospective application. The adoption of this guidance did not have a material impact to our Consolidated Financial Statements and related disclosures. In March 2016, the FASB issued ASU 2016-04, “Liabilities - Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products.” This update requires that liabilities related to the sale of prepaid stored-value products (gift cards) be adjusted periodically to reflect breakage. The Company adopted this guidance in the first quarter of fiscal 2017. The Company was recording gift card breakage prior to the adoption of this guidance; therefore, the adoption of this guidance did not have a material impact to our Consolidated Financial Statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The update addresses several aspects of the accounting for share-based compensation transactions including: (a) income tax consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c) a policy election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess tax impacts on the statement of cash flows. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from share-based compensation awards is dependent on our stock price at the date the awards are exercised or settled. The Company adopted this guidance in the first quarter of fiscal 2017, which did not have a material impact to our Consolidated Financial Statements and related disclosures. The Company has elected to continue estimating forfeitures of share-based awards. The Company has elected to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using a retrospective transition method, and as a result, excess tax benefits related to share-based awards which had been previously classified as cash flows from financing activities will be reclassified as cash flows from operating activities. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This update clarifies and provides specific guidance on eight cash flow classification issues that are not currently addressed by U.S. GAAP and thereby reduces the current and potential future diversity in practice. The Company adopted this guidance in the first quarter of fiscal 2017. The adoption of this guidance did not impact the classification of any of the Company’s cash flow activity and therefore did not have a material impact to our Consolidated Financial Statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This update simplifies the measurement of goodwill by eliminating the second step from the goodwill impairment test, which requires the comparison of the implied fair value of goodwill with the current carrying amount of goodwill. Instead, under the amendments in this guidance, an entity shall perform a goodwill impairment test by comparing the fair value of each reporting unit with its carrying amount and an impairment charge is to be recorded for the amount, if any, in which the carrying value exceeds the reporting unit’s fair value. The Company adopted this guidance in the first quarter of fiscal 2017 using a prospective application. The adoption of this guidance did not have a material impact to our Consolidated Financial Statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” which implemented a one-year deferral of ASU 2014-09. As a result of the deferral, the amendments in ASU 2014-09 are effective for reporting periods beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which further clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” which further clarifies the aspects of (a) identifying performance obligations and (b) the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” which provides implementation guidance in regards to (a) assessing the collectability criterion, (b) the presentation of taxes collected from customers, (c) noncash consideration, (d) contract modification at transition, (e) completed contracts at transition and (f) other technical corrections. In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which is intended to clarify the codification and to correct unintended application of guidance pertaining to Topic 606 and other Topics amended by ASU 2014-09 to increase stakeholders’ awareness of the proposals and to expedite improvements to ASU 2014-09. The effective date and transition requirements for ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 are the same as the effective date and transition requirements of ASU 2014-09. Entities that transition to these standards may either retrospectively restate each prior reporting period or reflect the cumulative effect of initially applying the updates with an adjustment to retained earnings at the date of adoption. The Company will adopt this guidance in the first quarter of fiscal 2018 using the modified retrospective transition method. Based on an evaluation of the standard as a whole, the Company has identified customer incentives and principal versus agent considerations as the areas that will most likely be affected by the new revenue recognition guidance. The adoption of this guidance is not expected to have a material impact on our Consolidated Financial Statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This update requires a dual approach for lessee accounting under which a lessee will account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. A modified retrospective approach is required for all leases existing or entered into after the beginning of the earliest comparative period in the consolidated financial statements. The Company is currently assessing the impact that adoption of this guidance will have on its Consolidated Financial Statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified or (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company plans to adopt this guidance in the first quarter of fiscal 2018. The adoption of this guidance is not expected to have a material impact on our Consolidated Financial Statements and related disclosures. In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in the financial statements. This update expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. Additionally, the amendments in ASU 2017-12 provide new guidance about income statement classification and eliminates the requirement to separately measure and report hedge ineffectiveness. This guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2017-12 require that an entity with cash flow or net investment hedges existing at the date of adoption apply a cumulative-effect adjustment to eliminate the separate measurement of ineffectiveness to the opening balance of retained earnings as of the beginning of the fiscal year that the entity adopts this guidance. The amended presentation and disclosure guidance is adopted prospectively. The adoption of this guidance is not expected to have a material impact on our Consolidated Financial Statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this guidance is not expected to have a material impact on our Consolidated Financial Statements and related disclosures. |
Significant Accounting Polici23
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Founded in 1938, Tractor Supply Company (the “Company” or “we”) is the largest operator of rural lifestyle retail stores in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers and ranchers and those who enjoy the rural lifestyle (which we refer to as the “ Out Here ” lifestyle), as well as tradesmen and small businesses. Stores are located primarily in towns outlying major metropolitan markets and in rural communities. At December 30, 2017 , the Company operated a total of 1,853 retail stores in 49 states ( 1,685 Tractor Supply and Del’s retail stores and 168 Petsense retail stores) and also offered a number of products online at TractorSupply.com and Petsense.com . |
Basis of Presentation | Basis of Presentation In the first quarter of fiscal 2017, the Company adopted accounting guidance which affected the presentation in the statement of cash flows of excess tax benefits or deficiencies from the exercise of stock options as discussed in Note 15. The Company has elected to apply the amendments using a retrospective transition method for all periods presented and therefore the presentation of previously reported excess tax benefits on the Consolidated Statements of Cash Flows has been changed to conform to the presentation used in the current period. As a result, $11.7 million and $27.0 million of excess tax benefits related to share-based awards which were previously classified as cash flows from financing activities have been reclassified as cash flows from operating activities in the Consolidated Statement of Cash Flows for the years ended December 31, 2016 , and December 26, 2015 , respectively. Additionally, beginning in fiscal 2017, the Statement of Stockholders’ Equity is no longer impacted by the excess tax benefits or deficiencies from the exercise of stock options. |
Fiscal Year | Fiscal Year The Company’s fiscal year includes 52 or 53 weeks and ends on the last Saturday of the calendar year. The fiscal year ended December 30, 2017 consisted of 52 weeks, the fiscal year ended December 31, 2016 consisted of 53 weeks and the fiscal year ended December 26, 2015 consisted of 52 weeks. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. |
Management Estimates | Management Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) inherently requires estimates and assumptions by management of the Company that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. Actual results could differ from those estimates. |
Inventory Impairment Risk | Inventory Impairment Risk The Company identifies potentially excess and slow-moving inventory by evaluating turn rates, historical and expected future sales trends, age of merchandise, overall inventory levels, current cost of inventory and other benchmarks. The Company has established an inventory valuation reserve to recognize the estimated impairment in value (i.e., an inability to realize the full carrying value) based on the Company’s aggregate assessment of these valuation indicators under prevailing market conditions and current merchandising strategies. The Company does not believe its merchandise inventories are subject to significant risk of obsolescence in the near term. However, changes in market conditions or consumer purchasing patterns could result in the need for additional reserves. |
Shrinkage | Shrinkage The Company performs physical inventories at least once a year for each store that has been open more than 12 months, and the Company has established a reserve for estimating inventory shrinkage between physical inventory counts. The reserve is established by assessing the chain-wide average shrinkage experience rate, applied to the related periods’ sales volumes. Such assessments are updated on a regular basis for the most recent individual store experiences. The estimated store inventory shrink rate is based on historical experience. The Company believes historical rates are a reasonably accurate reflection of future trends. |
Vendor Funding | Vendor Funding The Company receives funding from substantially all of its significant merchandise vendors, in support of its business initiatives, through a variety of programs and arrangements, including guaranteed vendor support funds (“vendor support”) and volume-based rebate funds (“volume rebates”). The amounts received are subject to terms of vendor agreements, most of which are “evergreen,” reflecting the on-going relationship with our significant merchandise vendors. Certain of the Company’s agreements, primarily volume rebates, are renegotiated annually, based on expected annual purchases of the vendor’s product. Vendor funding is initially deferred as a reduction of the purchase price of inventory, and then recognized as a reduction of cost of merchandise as the related inventory is sold. During interim periods, the amount of vendor support and volume rebates are estimated based upon initial commitments and anticipated purchase levels with applicable vendors. The estimated purchase volume (and related vendor funding) is based on the Company’s current knowledge of inventory levels, sales trends and expected customer demand, as well as planned new store openings and relocations. Although the Company believes it can reasonably estimate purchase volume and related volume rebates at interim periods, it is possible that actual year-end results could be different from previously estimated amounts. |
Freight | Freight The Company incurs various types of transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories (on an aggregate basis) and recognized as a component of cost of merchandise sold as the related inventory is sold. |
Self-Insurance Reserves | Self-Insurance Reserves The Company self-insures a significant portion of its employee medical insurance, workers’ compensation insurance and general liability (including product liability) insurance plans. The Company has stop-loss insurance policies to protect it from individual losses over specified dollar values. For self-insured employee medical claims, we have a stop loss limit of $300,000 per person per year. Our deductible or self-insured retention, as applicable, for each claim involving workers’ compensation insurance and general liability insurance is limited to $500,000 and our Texas Work Injury Policy is limited to $750,000 . Further, we maintain a commercially reasonable umbrella/excess policy that covers liabilities in excess of the primary insurance policy limits. The full extent of certain claims, especially workers’ compensation and general liability claims, may not become fully determined for several years. Therefore, the Company estimates potential obligations based upon historical claims experience, industry factors, severity factors and other actuarial assumptions. Although the Company believes the reserves established for these obligations are reasonably estimated, any significant change in the number of claims or costs associated with claims made under these plans could have a material effect on the Company’s financial results. At December 30, 2017 , the Company had recorded net insurance reserves of $57.9 million compared to $54.3 million at December 31, 2016 . |
Sales Tax Audit Reserve | Sales Tax Audit Reserve A portion of the Company’s sales are to tax-exempt customers, predominantly agricultural-based . The Company obtains exemption information as a necessary part of each tax-exempt transaction. Many of the states in which the Company conducts business will perform audits to verify the Company’s compliance with applicable sales tax laws. The business activities of the Company’s customers and the intended use of the unique products sold by the Company create a challenging and complex tax compliance environment. These circumstances also create some risk that the Company could be challenged as to the accuracy of the Company’s sales tax compliance. The Company reviews past audit experience and assessments with applicable states to continually determine if it has potential exposure for non-compliance. Any estimated liability is based on an initial assessment of compliance risk and historical experience with each state. The Company continually reassesses the exposure based on historical audit results, changes in policies, preliminary and final assessments made by state sales tax auditors and additional documentation that may be provided to reduce the assessment. The reserve for these tax audits can fluctuate depending on numerous factors, including the complexity of agricultural-based exemptions, the ambiguity in state tax regulations, the number of ongoing audits and the length of time required to settle with the state taxing authorities. |
Tax Contingencies | Tax Contingencies The Company’s income tax returns are periodically audited by U.S. federal and state tax authorities. These audits include questions regarding tax filing positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. At any time, multiple tax years are subject to audit by the various tax authorities. In evaluating the exposures associated with the Company’s various tax filing positions, the Company records a liability for uncertain tax positions taken or expected to be taken in a tax return. A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and fully resolved or clarified. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company adjusts its tax contingencies reserve and income tax provision in the period in which actual results of a settlement with tax authorities differs from the established reserve, the statute of limitations expires for the relevant tax authority to examine the tax position or when more information becomes available. The Company’s tax contingencies reserve contains uncertainties because management is required to make assumptions and apply judgment to estimate the exposures associated with the Company’s various filing positions and whether or not the minimum requirements for recognition of tax benefits have been met. The effective income tax rate is also affected by changes in tax law, the tax jurisdiction of new stores or business ventures, the level of earnings and the results of tax audits. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. When evaluating long-lived assets for potential impairment, the Company first compares the carrying value of the asset to the asset’s estimated undiscounted future cash flows. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level. The significant assumptions used to determine estimated undiscounted cash flows include cash inflows and outflows directly resulting from the use of those assets in operations, including margin on net sales, payroll and related items, occupancy costs, insurance allocations and other costs to operate a store. If the estimated future cash flows are less than the carrying value of the asset, the Company calculates an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value, which may be based on an estimated future cash flow model. The Company recognizes an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If the Company recognizes an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. For a depreciable long-lived asset, the new cost basis will be depreciated (amortized) over the remaining estimated useful life of that asset. No significant impairment charges were recognized in fiscal 2017 , 2016 or 2015 . Impairment charges are included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Income. |
Impairement of Indefinite-Lived Intangible Assets | Impairment of Indefinite-Lived Intangible Assets Goodwill and other indefinite-lived intangible assets are evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In accordance with the accounting standards, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value. The quantitative impairment test for goodwill compares the fair value of a reporting unit with the carrying value of its net assets, including goodwill. If the fair value of the reporting unit is less than the carrying value of the reporting unit, an impairment charge would be recorded to the Company’s operations, for the amount, if any, in which the carrying amount exceeds the reporting unit’s fair value. We determine fair values for each reporting unit using the market approach, when available and appropriate, or the income approach, or a combination of both. If multiple valuation methodologies are used, the results are weighted appropriately. The quantitative impairment test for other indefinite-lived intangible assets involves comparing the carrying amount of the asset to the sum of the discounted cash flows expected to be generated by the asset. If the implied fair value of the indefinite-lived intangible asset is less than the carrying value, an impairment charge would be recorded to the Company’s operations. No significant impairment charges were recognized in fiscal 2017 , 2016 or 2015 . Impairment charges are included in SG&A expenses in the Consolidated Statements of Income. |
Revenue Recognition | The Company recognizes revenue at the time the customer takes possession of merchandise. If the Company receives payment before completion of its customer obligations (as per the Company’s special order and layaway programs), the revenue is deferred until the customer takes possession of the merchandise and the sale is complete. |
Sales Taxes | The Company is required to collect certain taxes and fees from customers on behalf of government agencies and remit such collections to the applicable governmental agency on a periodic basis. These taxes and fees are collected from customers at the time of purchase, but are not included in net sales. The Company records a liability upon collection from the customer and relieves the liability when payments are remitted to the applicable governmental agency. |
Revenue Recognition Sales Returns | The Company estimates a liability for sales returns based on a rolling average of historical return trends, and the Company believes that its estimate for sales returns is an accurate reflection of future returns associated with past sales. However, as with any estimate, refund activity may vary from estimated amounts. At December 30, 2017 , the Company had a liability of $3.8 million reserved for sales returns compared to $4.2 million at December 31, 2016 . |
Revenue Recognition Gift Cards | The Company recognizes revenue when a gift card or merchandise return card is redeemed by the customer and recognizes income when the likelihood of the gift card or merchandise return card being redeemed by the customer is remote (referred to as “breakage”). The gift cards and merchandise return card breakage rate is based upon historical redemption patterns and income is recognized for unredeemed gift cards and merchandise return cards in proportion to those historical redemption patterns. The Company recognized breakage income of $2.4 million , $1.9 million and $1.6 million in fiscal 2017 , 2016 and 2015 , respectively. |
Cost of Merchandise Sold | Cost of Merchandise Sold Cost of merchandise sold includes the total cost of products sold; freight expenses associated with moving merchandise inventories from vendors to distribution facilities, from distribution facilities to retail stores, from one distribution facility to another, and directly to our customers; vendor support; damaged, junked or defective product; cash discounts from payments to merchandise vendors; and adjustments for shrinkage (physical inventory losses), lower of cost or net realizable value, slow moving product and excess inventory quantities. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses SG&A expenses include payroll and benefit costs for retail, distribution facility and corporate employees; share-based compensation expenses; occupancy costs of retail, distribution and corporate facilities; advertising; tender costs, including bank charges and costs associated with credit and debit card interchange fees; outside service fees; and other administrative costs, such as computer maintenance, supplies, travel and lodging. |
Advertising Costs | Advertising Costs Advertising costs consist of expenses incurred in connection with newspaper circulars and customer-targeted direct mail, as well as limited television, radio, digital and social media offerings and other promotions. Costs are expensed when incurred with the exception of television advertising and circular and direct mail promotions, which are expensed upon first showing. Advertising expenses for fiscal 2017 , 2016 and 2015 were approximately $81.3 million , $84.2 million and $73.9 million , respectively. Prepaid advertising costs were approximately $1.1 million and $2.1 million at December 30, 2017 , and December 31, 2016 , respectively. |
Warehousing and Distribution Costs | Warehousing and Distribution Facility Costs Costs incurred at the Company’s distribution facilities for receiving, warehousing and preparing product for delivery are expensed as incurred and are included in SG&A expenses in the Consolidated Statements of Income. Because the Company does not include these costs in cost of sales, the Company’s gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Distribution facility costs including depreciation for fiscal 2017 , 2016 and 2015 were approximately $182.1 million , $166.8 million and $145.4 million , respectively. |
Pre-opening Costs | Pre-opening Costs Non-capital expenditures incurred in connection with opening new stores, primarily payroll and rent, are expensed as incurred. Pre-opening costs were approximately $10.8 million , $9.9 million and $9.6 million in fiscal 2017 , 2016 and 2015 , respectively. |
Share-based Compensation | Share-Based Compensation The Company has share-based compensation plans covering certain members of management and non-employee directors, which include incentive and non-qualified stock options and restricted stock units. In addition, the Company offers an Employee Stock Purchase Plan (“ESPP”) to most employees that work at least 20 hours per week. The Company estimates the fair value of its stock option awards at the date of grant utilizing a Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. However, key assumptions used in the Black-Scholes model are adjusted to incorporate the unique characteristics of the Company’s stock option awards. Option pricing models and generally accepted valuation techniques require management to make subjective assumptions including expected stock price volatility, expected dividend yield, risk-free interest rate and expected life. The Company relies on historical volatility trends to estimate future volatility assumptions. The risk-free interest rates used were actual U.S. Treasury Constant Maturity rates for bonds matching the expected term of the option on the date of grant. The expected term of the option on the date of grant was estimated based on the Company’s historical experience for similar options. In addition to the key assumptions used in the Black-Scholes model, the estimated forfeiture rate at the time of valuation (which is based on historical experience for similar options) is a critical assumption, as it reduces expense ratably over the vesting period. The Company adjusts this estimate periodically, based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. The fair value of the Company’s restricted stock unit awards is the closing price of the Company’s common stock the day preceding the grant date, discounted for the expected dividend yield over the term of the award. The Company believes its estimates are reasonable in the context of historical experience. Future results will depend on, among other matters, levels of share-based compensation granted in the future, actual forfeiture rates and the timing of option exercises. |
Depreciation and Amortization | Depreciation and Amortization Depreciation includes expenses related to all retail, distribution facility and corporate assets. Amortization includes expenses related to definite-lived intangible assets. |
Income Tax | Income Taxes The Company uses the asset and liability method to account for income taxes whereby deferred tax assets and liabilities are determined based on differences between the financial carrying amounts of assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are anticipated to be in effect when temporary differences reverse or are settled. The effect of a tax rate change is recognized in the period in which the law is enacted in the provision for income taxes. The Company records a valuation allowance when it is more likely than not that a deferred tax asset will not be realized. |
Net Income Per Share | Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average diluted shares outstanding. Dilutive shares are computed using the treasury stock method for stock options and restricted stock units. |
Cash and Cash Equivalents | Cash and Cash Equivalents Temporary cash investments, with a maturity of three months or less when purchased, are considered to be cash equivalents. The majority of payments due from banks for customer credit cards are classified as cash and cash equivalents, as they generally settle within 24 - 48 hours. Sales generated through the Company’s private label credit cards are not reflected as accounts receivable. Under an agreement with Citi Cards, a division of Citigroup, consumer and business credit is extended directly to customers by Citigroup. All credit program and related services are performed and controlled directly by Citigroup. Payments due from Citigroup are classified as cash and cash equivalents as they generally settle within 24 - 48 hours. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments and interest rate swaps. Due to their short-term nature, the carrying values of cash and cash equivalents, short-term receivables and trade payables approximate current fair value at each balance sheet date. The Company had $427.5 million in borrowings under our debt facilities (as discussed in Note 5) at December 30, 2017 , and $275.0 million in borrowings as of December 31, 2016 . Based on current market interest rates (Level 2 inputs), the carrying value of our borrowings under our debt facilities approximates fair value for each period reported. The fair value of the Company’s interest rate swaps is determined based on the present value of expected future cash flows using forward rate curves (a Level 2 input). As described in further detail in Note 6, the fair value of the interest rate swaps, excluding accrued interest, was a $5.2 million asset at December 30, 2017 , and was a $2.8 million asset at December 31, 2016 . |
Derivative Financial Instruments | Derivative Financial Instruments The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards. |
Inventories | Inventories Inventories are stated at the lower of cost, as determined by the average cost method, or net realizable value. Inventory cost consists of the direct cost of merchandise including freight. Inventories are net of shrinkage, obsolescence, other valuations and vendor allowances. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Improvements to leased premises are amortized using the straight-line method over the initial term of the lease or the useful life of the improvement, whichever is less. The following estimated useful lives are generally applied: Life Buildings 30 – 35 years Leasehold and building improvements 1 – 35 years Furniture, fixtures and equipment 5 – 10 years Computer software and hardware 3 – 5 years The Company entered into agreements with various governmental entities in the states of Kentucky, Georgia and Tennessee to implement tax abatement plans related to its distribution center in Franklin, Kentucky (Simpson County), its distribution center in Macon, Georgia (Bibb County), and its Store Support Center in Brentwood, Tennessee (Williamson County). The tax abatement plans provide for reduction of real property taxes for specified time frames by legally transferring title to its real property in exchange for industrial revenue bonds. This property was then leased back to the Company. No cash was exchanged. The lease payments are equal to the amount of the payments on the bonds. The tax abatement period extends through the term of the lease, which coincides with the maturity date of the bonds. At any time, the Company has the option to purchase the real property by paying off the bonds, plus $1 . The terms and amounts authorized and drawn under each industrial revenue bond agreement are outlined as follows, as of December 30, 2017 : Bond Term Bond Authorized Amount (in millions) Amount Drawn (in millions) Franklin, Kentucky Distribution Center 30 years $54.0 $51.8 Macon, Georgia Distribution Center 15 years $58.0 $49.9 Brentwood, Tennessee Store Support Center 10 years $78.0 $75.3 Due to the form of these transactions, the Company has not recorded the bonds or the lease obligation associated with the sale lease-back transaction. The original cost of the Company’s property and equipment is recorded on the balance sheet and is being depreciated over its estimated useful life. |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to five years. Computer software consists of software developed for internal use and third-party software purchased for internal use. A subsequent addition, modification or upgrade to internal-use software is capitalized to the extent that it enhances the software’s functionality or extends its useful life. These costs are included in computer software and hardware in the accompanying Consolidated Balance Sheets. Certain software costs not meeting the criteria for capitalization are expensed as incurred. |
Store Closing Costs | Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those that are under-performing. The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes. Store closing costs were not significant to the results of operations for any of the fiscal years presented. |
Leases | Leases Assets under capital leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter, and the related charge to operations is included in depreciation expense in the Consolidated Statements of Income. Certain operating leases include rent increases during the lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis over the term of the lease (which includes the pre-opening period of construction, renovation, fixturing and merchandise placement) and records the difference between the expense charged to operations and amounts paid as a deferred rent liability. The Company occasionally receives reimbursements from landlords to be used towards improving the related store to be leased. Leasehold improvements are recorded at their gross costs, including items reimbursed by landlords. Related reimbursements are deferred and amortized on a straight-line basis as a reduction of rent expense over the applicable lease term. |
Significant Accounting Polici24
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Estimated useful lives of property, plant and equipment | Property and Equipment Property and equipment are carried at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Improvements to leased premises are amortized using the straight-line method over the initial term of the lease or the useful life of the improvement, whichever is less. The following estimated useful lives are generally applied: Life Buildings 30 – 35 years Leasehold and building improvements 1 – 35 years Furniture, fixtures and equipment 5 – 10 years Computer software and hardware 3 – 5 years |
Industrial Revenue Bonds | The terms and amounts authorized and drawn under each industrial revenue bond agreement are outlined as follows, as of December 30, 2017 : Bond Term Bond Authorized Amount (in millions) Amount Drawn (in millions) Franklin, Kentucky Distribution Center 30 years $54.0 $51.8 Macon, Georgia Distribution Center 15 years $58.0 $49.9 Brentwood, Tennessee Store Support Center 10 years $78.0 $75.3 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Share-based Compensation [Abstract] | |
Key assumptions in fair value determination | The ranges of key assumptions used in determining the fair value of options granted during fiscal 2017 , 2016 and 2015 , as well as a summary of the methodology applied to develop each assumption, are as follows: Fiscal Year 2017 2016 2015 Expected price volatility 25.1 - 26.0% 25.5 - 27.9% 27.3 – 28.8% Risk-free interest rate 1.7 - 1.9% 0.9 - 1.3% 1.2 – 1.5% Weighted average expected lives (in years) 4.4 4.4 4.5 Forfeiture rate 7.2 % 7.1 % 6.9% Dividend yield 1.3 % 0.9 % 1.0% |
Summary of stock option activity | A summary of stock option activity is as follows: Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( in thousands) Outstanding December 27, 2014 4,083,426 $ 41.93 7.2 $ 146,967 Granted 1,080,490 83.70 $ 19.53 Exercised (1,116,828 ) 33.11 Canceled (185,582 ) 67.28 Outstanding December 26, 2015 3,861,506 $ 54.95 7.1 $ 119,050 Granted 1,150,941 86.05 $ 19.27 Exercised (851,118 ) 42.53 Canceled (187,582 ) 80.01 Outstanding December 31, 2016 3,973,747 $ 65.43 6.9 $ 59,601 Granted 1,625,140 72.11 $ 14.56 Exercised (309,904 ) 38.87 Canceled (290,457 ) 79.08 Outstanding December 30, 2017 4,998,526 $ 68.46 6.9 $ 50,145 Exercisable at December 30, 2017 2,582,283 $ 60.46 5.3 $ 45,939 |
Other information relative to option activity | Other information relative to option activity during fiscal 2017 , 2016 and 2015 is as follows (in thousands): 2017 2016 2015 Total fair value of stock options vested $ 15,996 $ 15,184 $ 13,207 Total intrinsic value of stock options exercised $ 9,237 $ 39,696 $ 60,082 |
Restricted stock units activity | The status of restricted stock units is presented below: Restricted Stock Units Shares Weighted Average Grant Date Fair Value Restricted at December 27, 2014 277,347 $ 42.64 Granted 56,052 84.86 Exercised (107,548 ) 25.97 Forfeited (6,234 ) 63.57 Restricted at December 26, 2015 219,617 $ 60.99 Granted 59,586 83.22 Exercised (58,503 ) 52.51 Forfeited (26,669 ) 76.51 Restricted at December 31, 2016 194,031 $ 68.04 Granted 85,049 66.34 Exercised (51,069 ) 64.64 Forfeited (4,781 ) 79.65 Restricted at December 30, 2017 223,230 $ 67.92 |
Other information relative to restricted unit activity | Other information relative to restricted stock unit activity during fiscal 2017 , 2016 and 2015 is as follows (in thousands): 2017 2016 2015 Total grant date fair value of restricted stock units vested and issued $ 3,301 $ 3,072 $ 2,793 Total intrinsic value of restricted stock units vested and issued $ 3,465 $ 5,104 $ 9,139 |
Acquisition of Petsense Purchas
Acquisition of Petsense Purchase price allocation (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The table below summarizes the consideration transferred and allocation of the purchase price for the Petsense acquisition (in thousands): Consideration transferred $ 144,476 Assets acquired: Current assets $ 21,875 Property and equipment 25,519 Other intangible assets - tradename 31,300 Other assets 428 Liabilities assumed: Current liabilities (12,091 ) Long-term liabilities (5,489 ) Total identifiable net assets acquired 61,542 Excess of consideration transferred over identifiable net assets acquired (goodwill) $ 82,934 |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill [Line Items] | |
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill for the years ended December 30, 2017 and December 31, 2016 are as follows (in thousands): 2017 2016 Balance, beginning of year $ 94,417 $ 10,258 Goodwill acquired as part of acquisition — 84,159 Working capital settlement (1,225 ) — Impairment loss — — Balance, end of year $ 93,192 $ 94,417 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): December 30, December 31, Senior Notes $ 150.0 $ — Senior Credit Facility: February 2016 Term Loan 180.0 190.0 June 2017 Term Loan 97.5 — Revolving credit loans — 85.0 Total outstanding borrowings 427.5 275.0 Less: unamortized debt issuance costs (1.4 ) (1.1 ) Total debt 426.1 273.9 Less: current portion of long-term debt (25.0 ) (10.0 ) Long-term debt $ 401.1 $ 263.9 Outstanding letters of credit $ 39.6 $ 44.3 |
Interest Rate Swaps (Tables)
Interest Rate Swaps (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets (Liabilities) at Fair Value | The assets and liabilities measured at fair value related to the Company’s interest rate swaps, excluding accrued interest, were as follows (in thousands): Balance Sheet Location 2017 2016 Interest rate swaps (short-term portion) Other current assets / (Other accrued expenses) $ 900 $ (398 ) Interest rate swaps (long-term portion) Other assets 4,252 3,215 Total net assets $ 5,152 $ 2,817 |
Derivative Instruments, Gain (Loss) | 2017 2016 Beginning fiscal year AOCI balance $ 1,392 $ — Current fiscal period gain recognized in OCI 1,371 1,392 Amounts reclassified from AOCI (AOCL) into current fiscal period earnings — — Other comprehensive gain, net of tax 1,371 1,392 Ending fiscal period AOCI balance $ 2,763 $ 1,392 The following table summarizes the impact of pre-tax gains and losses derived from the Company’s interest rate swaps (in thousands): Financial Statement Location 2017 2016 2015 Effective portion of gains recognized in OCI during the period Other comprehensive income $ 2,240 $ 2,283 $ — Amounts reclassified from AOCI (AOCL) into earnings Interest expense, net — — — Ineffective portion of gains recognized in earnings during the period Interest expense, net 95 534 — 2017 2016 Income tax expense of interest rate swaps on AOCI $ 869 $ 891 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Leases [Abstract] | |
Future minimum payments due | Future minimum payments, by year and in the aggregate, under leases with initial or remaining terms of one year or more consist of the following (in thousands): Capital Leases Operating Leases 2018 $ 5,201 $ 324,813 2019 5,215 315,062 2020 5,234 296,773 2021 5,294 273,932 2022 4,172 251,059 Thereafter 23,149 1,219,048 Total minimum lease payments 48,265 $ 2,680,687 Amount representing interest (12,103 ) Present value of minimum lease payments 36,162 Less: current portion (3,545 ) Long-term capital lease obligations $ 32,617 |
Assets under capital leases | Assets under capital leases were as follows (in thousands): 2017 2016 Building and improvements, gross $ 29,324 $ 29,324 Computer software and hardware 11,388 — Less: accumulated depreciation and amortization (6,462 ) (3,381 ) Assets under capital lease, net $ 34,250 $ 25,943 |
Capital Stock and Dividends (Ta
Capital Stock and Dividends (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Equity [Abstract] | |
Schedule of Dividends Payable | During fiscal 2017 and 2016 , the Company’s Board of Directors declared the following cash dividends: Date Declared Dividend Amount Per Share Stockholders of Record Date Date Paid November 6, 2017 $0.27 November 20, 2017 December 5, 2017 August 7, 2017 $0.27 August 21, 2017 September 6, 2017 May 8, 2017 $0.27 May 22, 2017 June 6, 2017 February 8, 2017 $0.24 February 27, 2017 March 14, 2017 October 31, 2016 $0.24 November 14, 2016 November 29, 2016 August 1, 2016 $0.24 August 15, 2016 August 30, 2016 May 2, 2016 $0.24 May 16, 2016 June 1, 2016 February 3, 2016 $0.20 February 22, 2016 March 8, 2016 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net income per share calculation | Net income per share is calculated as follows (in thousands, except per share amounts): 2017 Net Income Shares Per Share Amount Basic net income per share $ 422,599 127,588 $ 3.31 Dilutive stock options and restricted stock units outstanding — 616 (0.01 ) Diluted net income per share $ 422,599 128,204 $ 3.30 2016 Net Income Shares Per Share Amount Basic net income per share $ 437,120 132,905 $ 3.29 Dilutive stock options and restricted stock units outstanding — 908 (0.02 ) Diluted net income per share $ 437,120 133,813 $ 3.27 2015 Net Income Shares Per Share Amount Basic net income per share $ 410,395 135,582 $ 3.03 Dilutive stock options and restricted stock units outstanding — 1,263 (0.03 ) Diluted net income per share $ 410,395 136,845 $ 3.00 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | The provision for income taxes consists of the following (in thousands): 2017 2016 2015 Current tax expense: Federal $ 207,986 $ 221,207 $ 225,253 State 14,516 20,858 17,419 Total current 222,502 242,065 242,672 Deferred tax expense (benefit): Federal 22,469 12,256 (7,017 ) State 4,953 (3,171 ) 1,567 Total deferred 27,422 9,085 (5,450 ) Total provision $ 249,924 $ 251,150 $ 237,222 |
Deferred tax assets and liabilities | Significant components of the deferred tax assets and liabilities are as follows (in thousands): 2017 2016 Tax assets: Inventory valuation $ 13,029 $ 19,713 Accrued employee benefits costs 7,092 14,120 Accrued sales tax audit reserve 3,479 4,317 Rent expenses in excess of cash payments required 24,728 35,391 Deferred compensation 20,299 23,978 Workers’ compensation insurance 9,153 13,565 General liability insurance 4,265 5,332 Lease exit obligations 1,829 2,617 Income tax credits 4,206 4,265 Other 6,997 7,311 95,077 130,609 Tax liabilities: Inventory basis difference (4,141 ) (4,600 ) Prepaid expenses (1,423 ) (2,912 ) Depreciation (65,650 ) (73,336 ) Amortization (3,818 ) (2,419 ) Other (1,551 ) (2,124 ) (76,583 ) (85,391 ) Net deferred tax asset $ 18,494 $ 45,218 |
Reconciliation of the provision for income taxes to the amounts computed at the federal statutory rate | A reconciliation of the provision for income taxes to the amounts computed at the federal statutory rate is as follows (in thousands): 2017 2016 2015 Tax provision at statutory rate $ 235,383 $ 240,894 $ 226,666 Tax effect of: State income taxes, net of federal tax benefits 14,320 15,527 13,976 Tax credits, net of federal tax benefits (5,060 ) (7,227 ) (3,763 ) Stock-based compensation programs (1,040 ) — — Enactment of tax legislation 4,856 — — Other 1,465 1,956 343 Total income tax expense $ 249,924 $ 251,150 $ 237,222 |
Reconciliation of gross unrecognized tax benefits | A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (exclusive of interest and penalties) is as follows (in thousands): 2017 2016 2015 Balance at beginning of year $ 1,579 $ 2,922 $ 3,500 Additions based on tax positions related to the current year 527 460 869 Additions for tax positions of prior years 14 139 — Reductions for tax positions of prior years (127 ) (1,829 ) (1,447 ) Reductions due to audit results — (113 ) — Balance at end of year $ 1,993 $ 1,579 $ 2,922 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Average percentage of sales by product categories (in hundredths) | The following table indicates the percentage of net sales represented by each major product category during fiscal 2017 , 2016 , and 2015 : Percent of Net Sales Product Category: 2017 2016 2015 Livestock and Pet 47 % 46 % 44 % Hardware, Tools and Truck 22 22 23 Seasonal, Gift and Toy Products 19 19 20 Clothing and Footwear 8 8 8 Agriculture 4 5 5 Total 100 % 100 % 100 % |
Significant Accounting Polici35
Significant Accounting Policies (Details) | Dec. 30, 2017USD ($)storestate | Dec. 31, 2016USD ($) | Dec. 30, 2017USD ($)storestate | Dec. 31, 2016USD ($) | Dec. 26, 2015USD ($) |
Self insurance reserves | |||||
Self-insured employee medical stop loss limit | $ 300,000 | ||||
Workers compensation and general liability deductible | 500,000 | ||||
Self-insurance reserves | $ 57,900,000 | $ 54,300,000 | $ 57,900,000 | $ 54,300,000 | |
Nature of business | |||||
Number of states in which rural lifestyle retail stores are operated by the company | state | 49 | 49 | |||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 11,700,000 | $ 27,000,000 | |||
Impairment of long-lived assets | |||||
Impairment charges | $ 0 | 0 | 0 | ||
Goodwill and other intangible assets | |||||
Goodwill and Intangible Asset Impairment | 0 | 0 | 0 | ||
Revenue recognition and sales returns | |||||
Reserve for sales returns | $ 3,800,000 | 4,200,000 | |||
Gift card revenue | 2,400,000 | 1,900,000 | 1,600,000 | ||
Advertising costs | |||||
Advertising expenses | 81,300,000 | 84,200,000 | 73,900,000 | ||
Prepaid advertising costs | 1,100,000 | 2,100,000 | 1,100,000 | 2,100,000 | |
Warehousing and distribution costs | |||||
Distribution center costs | 182,100,000 | 166,800,000 | 145,400,000 | ||
Preopening costs | |||||
Preopening costs | $ 10,800,000 | 9,900,000 | $ 9,600,000 | ||
Cash and cash equivalents | |||||
Minimum processing time for payments due from banks for customer credit card transactions | 24 | ||||
Maximum processing time for payments due from banks for customer credit card transactions | 48 | ||||
Fair value disclosures | |||||
Senior Credit Facility amount outstanding | 427,500,000 | 275,000,000 | $ 427,500,000 | 275,000,000 | |
Derivative, Fair Value, Net | 5,152,000 | $ 2,817,000 | 5,152,000 | $ 2,817,000 | |
Property and equipment | |||||
Cost of option to purchase the real property | 1 | $ 1 | |||
Franklin, KY DC | |||||
Property and equipment | |||||
Industrial Revenue Bond, Maturity Date | 30 years | ||||
Maximum Principal Amount of Bond Authorized | 54,000,000 | $ 54,000,000 | |||
Net Bond Proceeds Issued | 51,800,000 | $ 51,800,000 | |||
Macon, GA DC | |||||
Property and equipment | |||||
Industrial Revenue Bond, Maturity Date | 15 years | ||||
Maximum Principal Amount of Bond Authorized | 58,000,000 | $ 58,000,000 | |||
Net Bond Proceeds Issued | 49,900,000 | $ 49,900,000 | |||
Brentwood, TN SSC | |||||
Property and equipment | |||||
Industrial Revenue Bond, Maturity Date | 10 years | ||||
Maximum Principal Amount of Bond Authorized | 78,000,000 | $ 78,000,000 | |||
Net Bond Proceeds Issued | $ 75,300,000 | $ 75,300,000 | |||
Building | Minimum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 30 years | ||||
Building | Maximum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 35 years | ||||
Leaseholds and Building Improvements | Minimum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 1 year | ||||
Leaseholds and Building Improvements | Maximum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 35 years | ||||
Furniture, fixtures and equipment | Minimum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 5 years | ||||
Furniture, fixtures and equipment | Maximum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 10 years | ||||
Computer software and hardware | Minimum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 3 years | ||||
Computer software and hardware | Maximum | |||||
Property and Equipment | |||||
Property, plant and equipment, useful life | 5 years | ||||
TEXAS | |||||
Self insurance reserves | |||||
Workers compensation and general liability deductible | $ 750,000 | ||||
TSCO and Petsense [Domain] | |||||
Nature of business | |||||
Number of rural lifestyle retail stores operated by the company | store | 1,853 | 1,853 | |||
TSCO stores [Domain] | |||||
Nature of business | |||||
Number of rural lifestyle retail stores operated by the company | store | 1,685 | 1,685 | |||
Petsense stores [Domain] | |||||
Nature of business | |||||
Number of rural lifestyle retail stores operated by the company | store | 168 | 168 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | Dec. 27, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Vesting Term, Minimum | 1 year | ||||
Vesting Term | 4 years | ||||
Number of shares available for future equity awards (in shares) | 2,300,000 | 2,300,000 | |||
Share-based compensation | $ 29,202 | $ 23,554 | $ 19,420 | ||
Payments Related to Tax Withholding for Share-based Compensation | $ 816 | $ 843 | $ 2,997 | ||
Stock options, additional disclosures | |||||
Weighted average fair value, Granted (in dollars per share) | $ 14.56 | $ 19.27 | $ 19.53 | ||
Weighted average remaining contractual term, Outstanding, end of period (in years) | 6 years 10 months 24 days | 6 years 10 months 24 days | 7 years 1 month 5 days | 7 years 2 months 6 days | |
Weighted average remaining contractual rerm, Exercisable at end of period (in years) | 5 years 3 months 18 days | ||||
Aggregate intrinsic value, Outstanding, beginning of period | $ 59,601 | $ 119,050 | $ 146,967 | ||
Aggregate intrinsic value, Outstanding, end of period | $ 50,145 | 50,145 | $ 59,601 | $ 119,050 | $ 146,967 |
Aggregate intrinsic value, Exercisable at end of period | 45,939 | $ 45,939 | |||
Other information relative to restricted unit activity | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms | 0 | 0 | 0 | ||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Total unrecognized compensation | $ 4,300 | $ 4,300 | |||
Remaining weighted average expense recognition period (in years) | 1 year 7 months 20 days | ||||
Shares issued as a result of vested restricted stock units (in shares) | 39,314 | 48,267 | 72,206 | ||
Shares withheld to satisfy tax obligations (in shares) | 11,755 | 10,236 | 35,342 | ||
Payments Related to Tax Withholding for Share-based Compensation | $ 816 | $ 843 | $ 2,997 | ||
Restricted stock units | |||||
Restricted, beginning of period (in shares) | 194,031 | 219,617 | 277,347 | ||
Granted (in shares) | 85,049 | 59,586 | 56,052 | ||
Exercised (in shares) | (51,069) | (58,503) | (107,548) | ||
Forfeited (in shares) | (4,781) | (26,669) | (6,234) | ||
Restricted, end of period (in shares) | 223,230 | 223,230 | 194,031 | 219,617 | 277,347 |
Restricted stock units, additional disclosures | |||||
Weighted average grant date fair value, Restricted, beginning of period (in dollars per share) | $ 68.04 | $ 60.99 | $ 42.64 | ||
Weighted average grant date fair value, Granted (in dollars per share) | 66.34 | 83.22 | 84.86 | ||
Weighted average grant date fair value, Exercised (in dollars per share) | 64.64 | 52.51 | 25.97 | ||
Weighted average grant date fair value, Forfeited (in dollars per share) | 79.65 | 76.51 | 63.57 | ||
Weighted average grant date fair value, Restricted, end of period (in dollars per share) | $ 67.92 | $ 67.92 | $ 68.04 | $ 60.99 | $ 42.64 |
Other information relative to restricted unit activity | |||||
Total grant date fair value of restricted units vested and exercised | $ 3,301 | $ 3,072 | $ 2,793 | ||
Total intrinsic value of restricted units vested and exercised | 3,465 | $ 5,104 | $ 9,139 | ||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Total unrecognized compensation | $ 19,800 | $ 19,800 | |||
Remaining weighted average expense recognition period (in years) | 1 year 10 months 24 days | ||||
Key assumptions in fair value determination | |||||
Expected price volatility, minimum (in hundredths) | 25.10% | 25.50% | 27.30% | ||
Expected price volatility, maximum (in hundredths) | 26.00% | 27.90% | 28.80% | ||
Risk-free interest rate, minimum (in hundredths) | 1.70% | 0.90% | 1.20% | ||
Risk-free interest rate, maximum (in hundredths) | 1.90% | 1.30% | 1.50% | ||
Forfeiture rate, minimum (in hundredths) | 7.20% | 7.10% | 6.90% | ||
Forfeiture rate, maximum (in hundredths) | 7.20% | 7.10% | 6.90% | ||
Dividend yield, minimum (in hundredths) | 1.30% | 0.90% | 1.00% | ||
Dividend yield, maximum (in hundredths) | 1.30% | 0.90% | 1.00% | ||
Stock option expiration date (in years) | 10 | 10 | 10 | ||
Stock option activity | |||||
Outstanding, beginning of period (in shares) | 3,973,747 | 3,861,506 | 4,083,426 | ||
Granted (in shares) | 1,625,140 | 1,150,941 | 1,080,490 | ||
Exercised (in shares) | (309,904) | (851,118) | (1,116,828) | ||
Canceled (in shares) | (290,457) | (187,582) | (185,582) | ||
Outstanding, end of period (in shares) | 4,998,526 | 4,998,526 | 3,973,747 | 3,861,506 | 4,083,426 |
Exercisable, end of period (in shares) | 2,582,283 | 2,582,283 | |||
Stock options, additional disclosures | |||||
Weighted average exercise price, Outstanding, beginning of period (in dollars per share) | $ 65.43 | $ 54.95 | $ 41.93 | ||
Weighted average exercise price, Granted (in dollars per share) | 72.11 | 86.05 | 83.70 | ||
Weighted average exercise price, Exercised (in dollars per share) | 38.87 | 42.53 | 33.11 | ||
Weighted average exercise price, Cancelled (in dollars per share) | 79.08 | 80.01 | 67.28 | ||
Weighted average exercise price, Outstanding, end of period (in dollars per share) | $ 68.46 | 68.46 | $ 65.43 | $ 54.95 | $ 41.93 |
Weighted average exercise price, Exercisable, end of period (in dollars per share) | $ 60.46 | $ 60.46 | |||
Other information relative to option activity | |||||
Total fair value of stock options vested | $ 15,996 | $ 15,184 | $ 13,207 | ||
Total intrinsic value of stock options exercised | $ 9,237 | $ 39,696 | $ 60,082 | ||
Employee Stock Option | Minimum | |||||
Key assumptions in fair value determination | |||||
Weighted average expected lives (in years) | 4 years 5 months | 4 years 5 months | 4 years 6 months | ||
Employee Stock Option | Maximum | |||||
Key assumptions in fair value determination | |||||
Weighted average expected lives (in years) | 4 years 5 months | 4 years 5 months | 4 years 6 months | ||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share-based compensation | $ 1,000 | $ 1,100 | $ 1,100 | ||
Discount rate of employee stock purchase plan (in hundredths) | 15.00% | ||||
Shares of common stock issued for employee stock purchase plan (in shares) | 83,155 | 69,562 | 68,428 | ||
Shares of common stock reserved for future issuance under the ESPP (in shares) | 12,000,000 | 12,000,000 | |||
Employee Stock Purchase Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Shares of common stock reserved for future issuance under the ESPP (in shares) | 16,000,000 | 16,000,000 |
Acquisition of Petsense (Detail
Acquisition of Petsense (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 | Sep. 29, 2016 | Dec. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||
Business Acquisition, Effective Date of Acquisition | Sep. 29, 2016 | ||||
Consideration Transferred | $ 144,476 | ||||
Current Assets | 21,875 | $ 21,875 | |||
Property and Equipment | 25,519 | 25,519 | |||
Other intangible assets - tradename | 31,300 | ||||
Other Assets | 428 | 428 | |||
Current Liabilities | (12,091) | (12,091) | |||
Long-term liabilities | (5,489) | (5,489) | |||
Total identifiable net assets acquired | 61,542 | 61,542 | |||
Excess of consideration transferred over identifiable net assets acquired (goodwill) | 82,934 | 82,934 | |||
Goodwill, Purchase Accounting Adjustments | (1,225) | $ 0 | |||
Goodwill, Acquired During Period | $ 82,900 | $ 0 | $ 84,159 | ||
Indefinite-lived Intangible Assets Acquired | $ 31,300 | $ 31,300 | $ 31,300 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Details) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 | Sep. 29, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Goodwill [Line Items] | ||||||
Goodwill, Acquired During Period | $ 82,900,000 | $ 0 | $ 84,159,000 | |||
Goodwill, Purchase Accounting Adjustments | (1,225,000) | 0 | ||||
Goodwill, Impairment Loss | 0 | 0 | ||||
Impairment of Intangible Assets, Finite-lived | 0 | |||||
Goodwill | $ 93,192,000 | $ 94,417,000 | $ 93,192,000 | $ 94,417,000 | $ 10,258,000 | |
Indefinite-lived Intangible Assets Acquired | $ 31,300,000 | $ 31,300,000 | $ 31,300,000 |
Senior Notes (Details)
Senior Notes (Details) - USD ($) $ in Millions | Dec. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Senior Notes | $ 150 | $ 150 | $ 0 |
Senior Notes - Maturity Date | Aug. 14, 2029 | ||
Senior Notes - Interest Rate | 3.70% | 3.70% | |
Shelf Notes - Amount | $ 150 | $ 150 | |
Shelf Notes - Maximum Maturity Date Range - in Years | 12 | ||
Shelf Notes - Maximum Issuance Date | August 14, 2020 | ||
Debt Instrument, Percentage of Principal Amount Redeemable | 1 | ||
Shelf Notes - Additional Interest Rate | 0.005 | ||
Debt Instrument, Covenant Compliance | all | ||
Amount of incremental credit facility which will result in modification of debt covenants | 100 | ||
Number of Financial Covenants | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Covenant Description | 2 | ||
Fixed Charge Coverage Ratio Minimum Requirement | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Covenant Description | 2 | ||
Leverage Ratio Maximum Requirement | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Covenant Description | 4 |
Senior Credit Facility - Credit
Senior Credit Facility - Credit Agreement (Details) - USD ($) | Dec. 30, 2017 | Jun. 15, 2017 | Dec. 31, 2016 | Feb. 19, 2016 | Dec. 30, 2017 |
Line of Credit Facility | |||||
Senior Credit Facility, Maximum Borrowing Capacity | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||
Swingline Loan, Maximum Borrowing Capacity | $ 50,000,000 | 50,000,000 | |||
Debt Issuance Costs, Net | (1,400,000) | (1,100,000) | (1,400,000) | ||
Unsecured debt, net of debt issuance costs | 426,100,000 | 273,900,000 | 426,100,000 | ||
Unsecured Debt, Current | (25,000,000) | (10,000,000) | (25,000,000) | ||
Long-term Debt, Excluding Current Maturities | 401,069,000 | 263,850,000 | 401,069,000 | ||
Term Loan, Maximum Borrowing Capacity | $ 100,000,000 | 200,000,000 | |||
Unsecured Debt | 427,500,000 | 275,000,000 | 427,500,000 | ||
Letters of Credit Outstanding, Amount | $ 39,600,000 | 44,300,000 | $ 39,600,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | |||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||
Commitment fee for unused capacity | 0.125% | ||||
Compensating Balance, Amount | $ 0 | $ 0 | |||
Debt Instrument, Covenant Compliance | all | ||||
Base Rate | |||||
Line of Credit Facility | |||||
Line of Credit Facility, Interest Rate at Period End | 4.50% | 4.50% | |||
London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility | |||||
Line of Credit Facility, Interest Rate at Period End | 1.56% | 1.56% | |||
Minimum | |||||
Line of Credit Facility | |||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||
Commitment fee for unused capacity | 0.075% | ||||
Maximum | |||||
Line of Credit Facility | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.125% | ||||
Commitment fee for unused capacity | 0.20% | ||||
February 2016 Term Loan | |||||
Line of Credit Facility | |||||
Term loan, Maximum Month End Outstanding Amount | $ 180,000,000 | 190,000,000 | $ 180,000,000 | ||
Term Loan, Maximum Borrowing Capacity | $ 200,000,000 | ||||
Debt Instrument, Maturity Date | Feb. 19, 2022 | ||||
Due in years three through five February 2016 Term Loan | |||||
Line of Credit Facility | |||||
Debt Instrument, Frequency of Periodic Payment | 20 | ||||
Due in years one and two February 2016 Term Loan | |||||
Line of Credit Facility | |||||
Debt Instrument, Frequency of Periodic Payment | 10 | ||||
June 2017 Term Loan | |||||
Line of Credit Facility | |||||
Term loan, Maximum Month End Outstanding Amount | $ 97,500,000 | 0 | $ 97,500,000 | ||
Term Loan, Maximum Borrowing Capacity | $ 100,000,000 | ||||
Debt Instrument, Maturity Date | Jun. 15, 2022 | ||||
Due in years three through five June 2017 Term Loan | |||||
Line of Credit Facility | |||||
Debt Instrument, Frequency of Periodic Payment | 10 | ||||
Due in years one and two June 2017 Term Loan | |||||
Line of Credit Facility | |||||
Debt Instrument, Frequency of Periodic Payment | 5 | ||||
2016 Senior Credit Facility | |||||
Line of Credit Facility | |||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 0 | $ 85,000,000 | |||
Number of Financial Covenants | |||||
Line of Credit Facility | |||||
Debt Instrument, Covenant Description | 2 | ||||
Fixed Charge Coverage Ratio Minimum Requirement | |||||
Line of Credit Facility | |||||
Debt Instrument, Covenant Description | 2 | ||||
Leverage Ratio Maximum Requirement | |||||
Line of Credit Facility | |||||
Debt Instrument, Covenant Description | 4 |
Interest Rate Swaps (Details)
Interest Rate Swaps (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Derivative [Line Items] | |||||||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 2,240 | $ 2,283 | $ 0 | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | |||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 | 0 | ||||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 900 | ||||||
Fair Value, Option, Changes in Fair Value, Gain (Loss) | 1,371 | 1,392 | |||||
Derivative, Fair Value, Net | $ 5,152 | 2,817 | 5,152 | 2,817 | |||
Other Comprehensive Income (Loss), Net of Tax | 1,371 | 1,392 | 0 | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 2,763 | 1,392 | 2,763 | 1,392 | |||
Derivative Instruments, Loss Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing | 95 | 534 | 0 | ||||
Assets Needed for Immediate Settlement, Aggregate Fair Value | 0 | 0 | |||||
Interest Rate Swap Short Term Portion [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative Liability | (398) | (398) | |||||
Derivative Asset | 900 | 900 | |||||
Interest Rate Swap Long Term Portion [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative Asset | $ 4,252 | 3,215 | 4,252 | 3,215 | |||
Beginning Balance [Member] | |||||||
Derivative [Line Items] | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,392 | $ 1,392 | $ 0 | ||||
Term Loan 1 [Member] | |||||||
Derivative [Line Items] | |||||||
Interest Rate Swap, Inception Date | Mar. 31, 2016 | ||||||
Interest Rate Swap, Maturity Date | Feb. 19, 2021 | ||||||
Derivative Liability, Notional Amount | $ 180,000 | $ 197,500 | 180,000 | ||||
Term Loan 2 [Member] | |||||||
Derivative [Line Items] | |||||||
Interest Rate Swap, Inception Date | Jun. 30, 2017 | ||||||
Interest Rate Swap, Maturity Date | Jun. 15, 2022 | ||||||
Derivative Liability, Notional Amount | $ 97,500 | $ 100,000 | $ 97,500 |
Interest Rate Swaps Estimated A
Interest Rate Swaps Estimated Amount to be Reclassified into Earnings Next 12 Months (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Derivative [Line Items] | ||||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 2,240 | $ 2,283 | $ 0 | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 900 | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 1,392 | $ 2,763 | 1,392 | |
Beginning Balance [Member] | ||||
Derivative [Line Items] | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,392 | $ 1,392 | $ 0 |
Interest Rate Swaps Schedule of
Interest Rate Swaps Schedule of Changes in AOCL Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 2,240 | $ 2,283 | $ 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 1,371 | 1,392 | $ 0 |
Ending fiscal year AOCI balance | $ 2,763 | $ 1,392 |
Interest Rate Swaps Tax Impact
Interest Rate Swaps Tax Impact of Derivative Liability on Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax | $ 869 | $ 891 |
Interest Rate Swaps Reclassific
Interest Rate Swaps Reclassification from AOCI to Income (Details) $ in Millions | Dec. 31, 2016USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ 0.9 |
Interest Rate Swaps Ending Fisc
Interest Rate Swaps Ending Fiscal Period AOCL Balance (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 2,763 | $ 1,392 |
Interest Rate Swaps Effective D
Interest Rate Swaps Effective Date of Interest Rate Swap Agreement (Details) | Jun. 30, 2017 | Mar. 31, 2016 |
Term Loan 1 [Member] | ||
Derivative [Line Items] | ||
Derivative, Inception Date | Mar. 31, 2016 | |
Term Loan 2 [Member] | ||
Derivative [Line Items] | ||
Derivative, Inception Date | Jun. 30, 2017 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 26, 2015USD ($) | |
Leases [Abstract] | |||
Store leases periods, minimum (in years) | 10 years | ||
Store leases periods, maximum (in years) | 15 years | ||
Store leases optional renewal periods, minimum | 2 | ||
Store leases optional renewal periods, maximum | 4 | ||
Store leases optional renewal periods (in years) | 5 | ||
Operating Leases, Rent Expense, Net | $ 319,500 | $ 293,000 | $ 262,100 |
Aggregate capital leases future minimum payments due | |||
2,018 | 5,201 | ||
2,019 | 5,215 | ||
2,020 | 5,234 | ||
2,021 | 5,294 | ||
2,022 | 4,172 | ||
Thereafter | 23,149 | ||
Total minimum payments due | 48,265 | ||
Amount representing interest | (12,103) | ||
Present value of minimum lease payments | 36,162 | ||
Less: current portion | (3,545) | (1,294) | |
Long-term capital lease obligations | 32,617 | 25,919 | |
Aggregate operating lease future minimum payments due | |||
2,018 | 324,813 | ||
2,019 | 315,062 | ||
2,020 | 296,773 | ||
2,021 | 273,932 | ||
2,022 | 251,059 | ||
Thereafter | 1,219,048 | ||
Total minimum lease payments | 2,680,687 | ||
Building improvements | |||
Capital Leases, Balance Sheet, Assets by Major Class, Net | |||
Capital Leased Assets, Gross | 29,324 | 29,324 | |
Less: accumulated depreciation and amortization | (6,462) | (3,381) | |
Capital leased assets, Net | 34,250 | 25,943 | |
Computer Equipment [Member] | |||
Capital Leases, Balance Sheet, Assets by Major Class, Net | |||
Capital Leased Assets, Gross | $ 11,388 | $ 0 |
Capital Stock (Details)
Capital Stock (Details) - shares shares in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Common stock, shares authorized | 400,000 | 400,000 |
Preferred stock, shares authorized | 40 | 40 |
Capital Stock and Dividends (De
Capital Stock and Dividends (Details) - $ / shares | Feb. 07, 2018 | Nov. 06, 2017 | Aug. 07, 2017 | May 08, 2017 | Feb. 08, 2017 | Oct. 31, 2016 | Aug. 01, 2016 | May 02, 2016 | Feb. 03, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Dividends | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.27 | $ 0.27 | $ 0.27 | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.24 | $ 0.20 | $ 1.05 | $ 0.92 | $ 0.76 | |
Subsequent Event | ||||||||||||
Dividends | ||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.27 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ in Thousands, shares in Millions | Dec. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | ||||
Total amount of stock authorized under the repurchase program | $ 3,000,000 | $ 3,000,000 | ||
Stock Repurchase Program Expiration Date | Dec. 31, 2020 | |||
Repurchased shares under the share repurchase program (in shares) | 5.9 | 4.4 | 3.4 | |
Payments for Repurchase of Common Stock | $ (369,403) | $ (331,708) | $ (292,705) | |
Remaining authorization under the share repurchase program | $ 900,000 | $ 900,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Basic net income per share | |||
Net income, basic | $ 422,599 | $ 437,120 | $ 410,395 |
Shares, basic | 127,588 | 132,905 | 135,582 |
Per share amount, basic (in dollars per share) | $ 3.31 | $ 3.29 | $ 3.03 |
Dilutive stock options and restricted stock units outstanding, income | $ 0 | $ 0 | $ 0 |
Dilutive stock options and restricted stock units outstanding, shares | 616 | 908 | 1,263 |
Dilutive stock options and restricted stock units outstanding, per share (in dollars per share) | $ (0.01) | $ (0.02) | $ (0.03) |
Diluted net income per share | |||
Shares, diluted | 128,204 | 133,813 | 136,845 |
Diluted net income per share (in dollars per share) | $ 3.30 | $ 3.27 | $ 3 |
Anitdilutive securities excluded from computation of earnings per share | 3,900 | 1,900 | 900 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Income Tax Disclosure [Abstract] | |||
Corporate Income Tax Rate - Current | 35.00% | ||
Enacted Corporate Income Tax Rate | 21.00% | ||
Tax Credit Carryforward, Amount | $ 5,100,000 | $ 7,500,000 | |
Deferred Tax Assets, Valuation Allowance | 0 | 0 | |
Current tax expense | |||
Federal | 207,986,000 | 221,207,000 | $ 225,253,000 |
State | 14,516,000 | 20,858,000 | 17,419,000 |
Total current | 222,502,000 | 242,065,000 | 242,672,000 |
Deferred tax expense (benefit) | |||
Deferred Federal Income Tax Expense (Benefit) | 22,469,000 | 12,256,000 | (7,017,000) |
Deferred State and Local Income Tax Expense (Benefit) | 4,953,000 | (3,171,000) | 1,567,000 |
Deferred income tax expense (benefit), net of tax expense of interest rate swap | 27,422,000 | 9,085,000 | (5,450,000) |
Total income tax expense | 249,924,000 | 251,150,000 | 237,222,000 |
Tax assets | |||
Inventory valuation | 13,029,000 | 19,713,000 | |
Accrued employee benefits costs | 7,092,000 | 14,120,000 | |
Accrued sales tax audit reserve | 3,479,000 | 4,317,000 | |
Rent expenses in excess of cash payments required | 24,728,000 | 35,391,000 | |
Deferred compensation | 20,299,000 | 23,978,000 | |
Workers’ compensation insurance | 9,153,000 | 13,565,000 | |
General liability insurance | 4,265,000 | 5,332,000 | |
Lease exit obligations | 1,829,000 | 2,617,000 | |
Income tax credits | 4,206,000 | 4,265,000 | |
Other | 6,997,000 | 7,311,000 | |
Total non current deferred tax asset | 95,077,000 | 130,609,000 | |
Tax liabilities | |||
Inventory basis differences | (4,141,000) | (4,600,000) | |
Prepaid Expenses | (1,423,000) | (2,912,000) | |
Depreciation | (65,650,000) | (73,336,000) | |
Amortization | (3,818,000) | (2,419,000) | |
Other | (1,551,000) | (2,124,000) | |
Total non current deferred tax liabilities | (76,583,000) | (85,391,000) | |
Net deferred tax asset | 18,494,000 | 45,218,000 | |
Provision for income tax reconciliation to amounts computed at the federal statutory rate | |||
Tax provision at statutory rate | 235,383,000 | 240,894,000 | 226,666,000 |
State income taxes, net of federal tax benefits | 14,320,000 | 15,527,000 | 13,976,000 |
Tax credits, net of federal tax benefits | (5,060,000) | (7,227,000) | (3,763,000) |
Stock-based compensation programs | (1,040,000) | 0 | 0 |
Enactment of tax legislation | 4,856,000 | 0 | 0 |
Other | (1,465,000) | (1,956,000) | (343,000) |
Total income tax expense | 249,924,000 | 251,150,000 | 237,222,000 |
Unrecognized tax benefits that would Impact effective tax rate | 1,700,000 | ||
Reconciliation of gross unrecognized tax benefits | |||
Balance at beginning of period | 1,579,000 | 2,922,000 | 3,500,000 |
Additions based on tax positions related to the current year | 527,000 | 460,000 | 869,000 |
Additions for tax positions of prior years | 14,000 | 139,000 | 0 |
Reductions for tax positions of prior years | (127,000) | (1,829,000) | (1,447,000) |
Reductions due to audit results | 0 | (113,000) | 0 |
Balance at end of year | $ 1,993,000 | $ 1,579,000 | $ 2,922,000 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Schedule Defined Contribution Benefit Plan | |||
Percentage match by company applicable to first 3 percent of employee's contribution | 100.00% | ||
Percentage match by company applicable to next 3 percent of employee's contribution | 50.00% | ||
Maximum percentage of employee's eligible compensation eligible for 100% match (in hundredths) | 3.00% | ||
Minimum percentage of employee's compensation eligible for 50% match | 3.00% | ||
Maximum percentage of employee's compensation eligible for 50% match | 6.00% | ||
Company maximum match as a percentage of eligible compensation (in hundredths) | 4.50% | ||
Defined contribution plan, cost recognized | $ 7.4 | $ 6.6 | $ 5.9 |
Retirement Benefit Plans Deferr
Retirement Benefit Plans Deferred Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 | |
Schedule of Deferred Compensation | |||
Company's maximum match under employee deferred compensation program | $ 4,500 | ||
Deferred compensation arrangement with individual, employer contribution | $ 500,000 | $ 600,000 | $ 500,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase Obligation, Due in Next Twelve Months | $ 55,000 | |
Purchase Obligation, Due in Next Twelve Months | 0 | |
Letters of Credit Outstanding, Amount | $ 39,600 | $ 44,300 |
Segment Reporting (Details)
Segment Reporting (Details) - segment | Dec. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | Dec. 26, 2015 |
Revenue from External Customer | ||||
Number of Reportable Segments | 1 | |||
Average percent of sales (in hundredths) | 100.00% | 100.00% | 100.00% | |
Livestock and Pet | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 47.00% | 46.00% | 44.00% | |
Hardware, Tools and Truck | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 22.00% | 22.00% | 23.00% | |
Seasonal, Gift and Toy Products | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 19.00% | 19.00% | 20.00% | |
Clothing and Footwear | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 8.00% | 8.00% | 8.00% | |
Agriculture | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 4.00% | 5.00% | 5.00% |