Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 25, 2021 | Jan. 22, 2022 | Jun. 26, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 25, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-23314 | ||
Entity Registrant Name | TRACTOR SUPPLY CO /DE/ | ||
Entity Incorporation, State | DE | ||
Entity Tax Identification Number | 13-3139732 | ||
Entity Address, Street Address | 5401 Virginia Way | ||
Entity Address, City | Brentwood | ||
Entity Address, State | TN | ||
Entity Address, Zip Code | 37027 | ||
City Area Code | 615 | ||
Local Phone Number | 440-4000 | ||
Title of each class | Common Stock, $.008 par value | ||
Name of each exchange on which registered | NASDAQ | ||
Trading Symbol(s) | TSCO | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 17.2 | ||
Entity Common Stock, Shares Outstanding | 112,772,349 | ||
Entity Central Index Key | 0000916365 | ||
Current Fiscal Year End Date | --12-25 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true |
Audit Information
Audit Information | 12 Months Ended |
Dec. 25, 2021 | |
Auditor [Line Items] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Nashville, Tennessee |
Auditor Firm ID | 42 |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 25, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New accounting pronouncements | New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." This collective guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates ("IBOR"s), and, particularly, the risk of cessation of the London Inter-Bank Offer Rate ("LIBOR") related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Income Statement [Abstract] | |||
Net Sales | $ 12,731,105,000 | $ 10,620,352,000 | $ 8,351,931,000 |
Cost of Merchandise Sold | 8,253,952,000 | 6,858,803,000 | 5,480,161,000 |
Gross profit | 4,477,153,000 | 3,761,549,000 | 2,871,770,000 |
Selling, general and administrative expenses | 2,900,297,000 | 2,478,524,000 | 1,932,572,000 |
Depreciation and amortization | 270,158,000 | 217,124,000 | 195,978,000 |
Goodwill and Intangible Asset Impairment | 0 | 68,973,000 | 0 |
Operating income | 1,306,698,000 | 996,928,000 | 743,220,000 |
Interest expense, net | 26,610,000 | 28,781,000 | 19,843,000 |
Income before income taxes | 1,280,088,000 | 968,147,000 | 723,377,000 |
Income tax expense | 282,974,000 | 219,189,000 | 161,023,000 |
Net income | $ 997,114,000 | $ 748,958,000 | $ 562,354,000 |
Net income per share – basic | $ 8.69 | $ 6.44 | $ 4.70 |
Net income per share – diluted | $ 8.61 | $ 6.38 | $ 4.66 |
Weighted average shares outstanding | |||
Basic | 114,794 | 116,370 | 119,727 |
Diluted | 115,824 | 117,436 | 120,743 |
Dividends declared per common share outstanding | $ 2.08 | $ 1.50 | $ 1.36 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Comprehensive Income [Abstract] | |||
Net income | $ 997,114 | $ 748,958 | $ 562,354 |
Change in fair value of interest rate swaps, net of taxes | 4,588 | (3,442) | (4,332) |
Other Comprehensive Income (Loss), Net of Tax, Total | 4,588 | (3,442) | (4,332) |
Total comprehensive income | $ 1,001,702 | $ 745,516 | $ 558,022 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 25, 2021 | Dec. 26, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 878,030 | $ 1,341,756 |
Inventories | 2,191,192 | 1,783,270 |
Prepaid expenses and other current assets | 164,118 | 133,659 |
Income taxes receivable | 17,100 | 0 |
Total current assets | 3,250,440 | 3,258,685 |
Property and equipment, net | 1,617,806 | 1,248,960 |
Operating Lease, Right-of-Use Asset | 2,785,858 | 2,423,881 |
Goodwill and other intangible assets | 55,520 | 55,520 |
Deferred Tax Assets, Deferred Income | 2,437 | 31,586 |
Other assets | 55,406 | 30,484 |
Total assets | 7,767,467 | 7,049,116 |
Current liabilities: | ||
Accounts payable | 1,155,630 | 976,096 |
Accrued employee compensation | 109,618 | 119,701 |
Other accrued expenses | 474,412 | 324,813 |
Current portion of long-term debt | 0 | 0 |
Finance Lease, Liability, Current | 3,897 | 4,554 |
Operating Lease, Liability, Current | 321,285 | 298,696 |
Income taxes payable | 0 | 19,938 |
Total current liabilities | 2,064,842 | 1,743,798 |
Long-term debt | 986,382 | 984,324 |
Finance Lease, Liability, Noncurrent | 32,848 | 33,096 |
Operating Lease, Liability, Noncurrent | 2,574,882 | 2,220,904 |
Other long-term liabilities | 105,848 | 143,154 |
Total liabilities | 5,764,802 | 5,125,276 |
Stockholders' equity: | ||
Common stock | 1,411 | 1,401 |
Additional paid-in capital | 1,210,512 | 1,095,500 |
Treasury stock | (4,155,846) | (3,356,953) |
Accumulated other comprehensive income/(loss) | 1,345 | (3,243) |
Retained earnings | 4,945,243 | 4,187,135 |
Total stockholders' equity | 2,002,665 | 1,923,840 |
Total liabilities and stockholders' equity | $ 7,767,467 | $ 7,049,116 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 25, 2021 | Dec. 26, 2020 |
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 (in shares) | 400,000 | 400,000 |
Common stock, par value (in dollars per share) | $ 0.008 | $ 0.008 |
Common stock, issued (in shares) | 176,371 | 175,128 |
Common stock, outstanding (in shares) | 113,125 | 116,246 |
Treasury stock, at cost (in shares) | 63,246 | 58,882 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Restricted Stock Units (RSUs) [Member] | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings |
Shares, Outstanding | 121,828 | ||||||
Stockholders' equity at Dec. 29, 2018 | $ 1,561,820 | $ 1,375 | $ 823,413 | $ (2,480,677) | $ 3,814 | $ 3,213,895 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock under employee stock purchase plan | 115,981 | $ 14 | 115,967 | ||||
Issuance of common stock under employee stock purchase plan, shares | 1,721 | ||||||
Share-based compensation | 31,136 | 31,136 | |||||
Repurchase of shares to satisfy tax obligations | (3,818) | $ (3,818) | |||||
Treasury Stock, Shares, Acquired | (5,384) | ||||||
Repurchase of common stock | (533,319) | (533,319) | |||||
Dividends paid | (162,699) | (162,699) | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (4,332) | (4,332) | |||||
Net income | 562,354 | 562,354 | |||||
Reclassification of stranded tax effects (ASU 2018-02) | 0 | ||||||
Reclassification of stranded tax effects (ASU 2018-02) | Accounting Standards Update 2018-02 | 717 | (717) | |||||
Stockholders' equity at Dec. 28, 2019 | 1,567,123 | $ 1,389 | 966,698 | (3,013,996) | 199 | 3,612,833 | |
Shares, Outstanding | 118,165 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock under employee stock purchase plan | 99,340 | $ 12 | 99,328 | ||||
Issuance of common stock under employee stock purchase plan, shares | 1,520 | ||||||
Share-based compensation | 37,273 | 37,273 | |||||
Repurchase of shares to satisfy tax obligations | (7,799) | (7,799) | |||||
Treasury Stock, Shares, Acquired | (3,439) | ||||||
Repurchase of common stock | (342,957) | (342,957) | |||||
Dividends paid | (174,656) | (174,656) | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (3,442) | (3,442) | |||||
Net income | 748,958 | 748,958 | |||||
Stockholders' equity at Dec. 26, 2020 | 1,923,840 | $ 1,401 | 1,095,500 | (3,356,953) | (3,243) | 4,187,135 | |
Shares, Outstanding | 116,246 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of common stock under employee stock purchase plan | 82,249 | $ 10 | 82,239 | ||||
Issuance of common stock under employee stock purchase plan, shares | 1,243 | ||||||
Share-based compensation | 47,649 | 47,649 | |||||
Repurchase of shares to satisfy tax obligations | (14,876) | $ (14,876) | |||||
Treasury Stock, Shares, Acquired | (4,364) | ||||||
Repurchase of common stock | (798,893) | (798,893) | |||||
Dividends paid | (239,006) | (239,006) | |||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 4,588 | 4,588 | |||||
Net income | 997,114 | 997,114 | |||||
Stockholders' equity at Dec. 25, 2021 | $ 2,002,665 | $ 1,411 | $ 1,210,512 | $ (4,155,846) | $ 1,345 | $ 4,945,243 | |
Shares, Outstanding | 113,125 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 997,114,000 | $ 748,958,000 | $ 562,354,000 |
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Depreciation and amortization | 270,158,000 | 217,124,000 | 195,978,000 |
Goodwill and Intangible Asset Impairment | 0 | 68,973,000 | 0 |
Other Asset Impairment Charges | 0 | 5,078,000 | 0 |
Gain (Loss) on Disposition of Property Plant Equipment | 4,045,000 | (1,157,000) | (297,000) |
Share-based Payment Arrangement, Noncash Expense | 47,649,000 | 37,273,000 | 31,136,000 |
Deferred Income Tax Expense (Benefit) | 29,149,000 | (31,739,000) | 6,760,000 |
Change in assets and liabilities | |||
Increase (Decrease) in Inventories | (407,922,000) | (180,489,000) | (13,239,000) |
Increase (Decrease) in Prepaid Expense and Other Assets | (30,459,000) | (32,794,000) | 13,582,000 |
Increase (Decrease) in Accounts Payable | 179,534,000 | 333,060,000 | 23,055,000 |
Increase (Decrease) in Employee Related Liabilities | (10,083,000) | 79,946,000 | (14,291,000) |
Increase (Decrease) in Accrued Liabilities | 137,833,000 | 72,405,000 | 10,351,000 |
997114000 | (37,038,000) | 13,954,000 | 8,327,000 |
Increase (Decrease) in Other Operating Assets and Liabilities, Net | (41,260,000) | 63,923,000 | (12,000,000) |
Net Cash Provided by (Used in) Operating Activities, Total | 1,138,720,000 | 1,394,515,000 | 811,716,000 |
Cash flows from investing activities: | |||
Payments to Acquire Property, Plant, and Equipment | (628,431,000) | (294,002,000) | (217,450,000) |
Proceeds from Sale of Property, Plant, and Equipment | 1,091,000 | 1,792,000 | 2,489,000 |
Net Cash Provided by (Used in) Investing Activities, Total | (627,340,000) | (292,210,000) | (214,961,000) |
Cash flows from financing activities: | |||
Proceeds from Issuance of Unsecured Debt | 0 | 2,009,000,000 | 1,002,000,000 |
Repayments of Unsecured Debt | 0 | (1,406,500,000) | (1,013,250,000) |
Debt discounts and issuance costs | 0 | (17,048,000) | 0 |
Repayments of Long-term Capital Lease Obligations | (4,580,000) | (4,170,000) | (3,708,000) |
Repurchase of shares to satisfy tax obligations | (14,876,000) | (7,799,000) | (3,818,000) |
Repurchase of common stock | (798,893,000) | (342,957,000) | (533,319,000) |
Proceeds, Issuance of Shares, Share-based Payment Arrangement, Including Option Exercised | 82,249,000 | 99,340,000 | 115,981,000 |
Payments of Dividends | (239,006,000) | (174,656,000) | (162,699,000) |
Net Cash Provided by (Used in) Financing Activities, Total | (975,106,000) | 155,210,000 | (598,813,000) |
Net change in cash and cash equivalents | (463,726,000) | 1,257,515,000 | (2,058,000) |
Cash and cash equivalents at beginning of year | 1,341,756,000 | 84,241,000 | 86,299,000 |
Cash and cash equivalents at end of year | 878,030,000 | 1,341,756,000 | 84,241,000 |
Cash paid during the year for: | |||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 23,601,000 | 24,540,000 | 19,146,000 |
Income taxes | 291,665,000 | 235,319,000 | 144,377,000 |
Supplemental disclosures of non-cash activities [Abstract] | |||
Non-cash accruals for construction in progress | 24,408,000 | 12,642,000 | 7,924,000 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 678,092,000 | 524,141,000 | 365,233,000 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 3,675,000 | $ 7,395,000 | $ 5,217,000 |
New Accounting Pronouncement or Change in Accounting Principle, Description of Prior-period Information Retrospectively Adjusted | — | — | 2,084,880 |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 25, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based compensation expense | Share-Based Compensation: Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and certain transactions under the Company’s ESPP. Share-based compensation expense is recognized based on the grant date fair value of all stock options, restricted stock units, and performance-based restricted share units. Share based compensation expense is also recognized for the value of the 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the market value on the first day of the purchase period or the market value on the purchase date, whichever is lower, and the employee’s purchase price. There were no significant modifications to the Company's share-based compensation plans since the adoption of the 2018 Omnibus Incentive Plan (the “2018 Plan”) on May 10, 2018, which replaced the 2009 Stock Incentive Plan. Following the adoption of the 2018 Plan, no further grants may be made under the 2009 Stock Incentive Plan. Under our share-based compensation plans, awards may be granted to officers, non-employee directors, and other employees. 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 awards will expire no later than ten Share-based compensation expense, including changes in expense for modifications, if any, of awards, was $47.6 million, $37.3 million, and $31.1 million for fiscal 2021, 2020, and 2019, respectively. Stock Options 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 2021, 2020, and 2019, as well as a summary of the methodology applied to develop each assumption, are as follows: Fiscal Year 2021 2020 2019 Expected price volatility 29.8% - 30.3% 26.7% - 30.0% 26.4% - 27.6% Risk-free interest rate 0.3% - 1.0% 0.2% - 1.3% 1.6% - 2.5% Weighted average expected lives (in years) 4.3 4.3 4.5 Forfeiture rate 7.0 % 7.0 % 7.3 % Dividend yield 1.5 % 1.5 % 1.4 % 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 term of the option. An increase in the risk-free interest rate will increase compensation expense. Weighted Average Expected Term — 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 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 term 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: Stock Option Activity Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( in thousands) Outstanding at December 26, 2020 1,932,410 80.44 5.8 $ 128,411 Granted 248,808 145.87 $ 30.78 Exercised (974,878) 77.63 Canceled (38,029) 106.98 Outstanding at December 25, 2021 1,168,311 $ 95.85 6.9 $ 154,706 Exercisable at December 25, 2021 598,807 $ 77.15 5.4 $ 90,489 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 25, 2021, total unrecognized compensation expense related to non-vested stock options was approximately $8.4 million with a weighted average expense recognition period of 1.8 years. There were no material modifications to options in fiscal 2021, 2020, or 2019. Other information relative to options activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total fair value of stock options vested $ 8,478 $ 12,546 $ 16,060 Total intrinsic value of stock options exercised $ 90,532 $ 64,395 $ 45,101 Restricted Stock Units The Company issues shares for restricted stock units once vesting occurs and related restrictions lapse. The fair value of the restricted stock units 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 units generally vest over a one three Restricted Stock Unit Activity Restricted Stock Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 595,645 $ 85.27 Granted 276,268 144.52 Vested (305,704) 82.51 Forfeited (42,790) 118.70 Restricted at December 25, 2021 523,419 $ 115.59 As of December 25, 2021, total unrecognized compensation expense related to non-vested restricted stock units was approximately $36.4 million with a weighted average expense recognition period of 1.9 years. There were no material modifications to restricted stock units in fiscal 2021, 2020, or 2019. Other information relative to restricted stock unit activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total grant date fair value of restricted stock units vested and issued $ 25,222 $ 17,935 $ 8,301 Total intrinsic value of restricted stock units vested and issued $ 47,136 $ 23,011 $ 10,623 Performance-Based Restricted Share Units We issue performance-based restricted share units to senior executives that represent shares potentially issuable in the future, subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share over a specified performance period. The performance metrics for the performance-based restricted share units granted in fiscal 2021 also include a relative total shareholder return ("TSR") modifier such that the actual number of shares that vest at the end of the respective three-year period is determined based on the Company's TSR performance relative to the constituents of the S&P 500 as well as the level of achievement of the performance goals. If the performance targets are achieved, the performance-based restricted share units will be issued based on the achievement level, inclusive of the relative TSR modifier and the grant date fair value, and will cliff vest in full on the third anniversary of the date of the grant. The fair value of the performance-based restricted share units is estimated using a Monte Carlo simulation model on the grant date. Key assumptions used in the Monte Carlo simulation for the performance shares with a TSR modifier granted during fiscal 2021 include an expected volatility of 31.47%, a risk-free interest rate of 0.18% and a compounded dividend yield of 1.13%. A summary of performance-based restricted share unit activity is presented below: Performance-Based Restricted Share Unit Activity Performance-Based Restricted Share Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 143,268 $ 87.94 Granted (a) 60,317 148.05 Vested (10,015) 64.70 Forfeited (6,552) 104.65 Restricted at December 25, 2021 187,018 $ 107.99 (a) Assumes 100% target level achievement of the relative performance targets. The actual number of shares that will be issued, which may be higher or lower than the target, will be determined by the level of achievement of the relative performance targets, inclusive of the TSR modifier. As of December 25, 2021, total unrecognized compensation expense related to non-vested performance-based restricted share units was approximately $17.4 million with a weighted average expense recognition period of 1.9 years There were no material modifications to performance-based restricted share units in fiscal 2021, 2020, or 2019. Other information relative to performance-based restricted share unit activity during fiscal 2021 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total grant date fair value of performance-based restricted share units vested and issued $ 648 $ 1,895 $ 2,035 Total intrinsic value of performance-based restricted share units vested and issued $ 1,538 $ 2,826 $ 2,666 Shares Withheld to Satisfy Tax Withholding Requirements For the majority of restricted stock units and performance-based restricted share units granted, the number of shares issued on the date the stock awards vest is net of shares withheld by the Company to satisfy the minimum statutory tax withholding requirements, which the Company pays on behalf of its employees. The Company issued 219,723, 186,751, and 103,124 shares as a result of vested restricted stock units and performance-based restricted share units during fiscal 2021, 2020, and 2019, 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 95,996, 81,946, and 41,786 shares withheld to satisfy $14.9 million, $7.8 million, and $3.8 million of employees’ tax obligations during fiscal 2021, 2020, and 2019, respectively. 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 48,446, 63,704, and 61,678 shares of common stock during fiscal 2021, 2020, and 2019, respectively. The total cost related to the ESPP, including the compensation expense calculations, was approximately $1.4 million, $1.4 million, and $1.1 million in fiscal 2021, 2020, and 2019, respectively. There is a maximum of 16.0 million shares of common stock that are reserved under the ESPP. At December 25, 2021, there were approximately 11.8 million remaining shares of common stock reserved for future issuance under the ESPP. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 25, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill and Other Intangible Assets: Goodwill The changes in the carrying amount of goodwill by reporting unit for the years ended December 25, 2021 and December 26, 2020 are as follows (in thousands): Fiscal Year 2021 Fiscal Year 2020 Tractor Supply Petsense Consolidated Tractor Supply Petsense Consolidated Balance, beginning of year $ 10,258 $ 22,161 $ 32,419 $ 10,258 $ 82,934 $ 93,192 Impairment expense — — — — (60,773) (60,773) Balance, end of year $ 10,258 $ 22,161 $ 32,419 $ 10,258 $ 22,161 $ 32,419 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's annual impairment evaluation is conducted on the first day of the fiscal fourth quarter. In the fourth quarter of fiscal 2021, the Company completed its annual impairment assessment of goodwill for all reporting units. As part of this analysis, the Company assessed the current environment to determine if there were any indicators of impairment as a result of the operating conditions resulting from COVID-19 or otherwise and concluded, that while there have been events and circumstances in the macro-environment that have impacted the Company's business, there were no any entity-specific indicators of impairment of goodwill that would require the Company to perform a quantitative impairment assessment. Therefore, there were no impairment charges related to goodwill being recognized in fiscal 2021. In the fourth quarter of fiscal 2020, the Company identified qualitative indicators of impairment as a result of a strategic reassessment of the Petsense business, including an evaluation of current operations and its future growth outlook due to changing consumer trends within certain identified growth markets, which resulted in a decision to reduce the number of new store openings planned over the long term. The carrying value of goodwill for the Petsense reporting unit is indicative of the expected growth and development of the business. The aforementioned decision to reduce the long-term growth outlook resulted in a downward adjustment of the future financial forecasts for the Petsense business which indicated that impairment of the goodwill asset was a more-likely-than-not outcome. We conducted a quantitative impairment analysis of the Petsense reporting unit using the income approach. As a result of the quantitative impairment analysis of the Petsense reporting unit, it was determined that the carrying value exceeded the fair value, resulting in a pre-tax impairment loss of approximately $60.8 million in fiscal 2020. Other Intangible Assets The Company had approximately $23.1 million of intangible assets other than goodwill at December 25, 2021 and December 26, 2020. The intangible asset balance represents the carrying value of the Petsense trade name, 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. The trade name asset is evaluated for impairment annually and whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. The Company's annual impairment evaluation is conducted on the first day of the fiscal fourth quarter. In the fourth quarter of fiscal 2021, the Company completed its annual impairment testing of intangible assets and no impairment was identified. The Company determined that the fair value of the intangible asset was in excess of the carrying value. In the fourth quarter of fiscal 2020, the aforementioned decision to reduce the long-term growth outlook for Petsense resulted in a downward adjustment of its future financial forecasts which indicated that impairment of the trade name asset was a more-likely-than-not outcome. The Company conducted a quantitative impairment analysis in the fourth quarter of fiscal 2020 using the relief-from-royalty method. As a result of the quantitative impairment analysis, it was determined that the carrying value of the Petsense trade name was in excess of the fair value, resulting in a pre-tax impairment loss of approximately $8.2 million in fiscal 2020. |
Debt
Debt | Dec. 25, 2021 | Dec. 25, 2021 |
Debt Disclosure [Abstract] | ||
Debt | Debt: The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): December 25, December 26, 1.75% Senior Notes due 2030 $ 650.0 $ 650.0 3.70% Senior Notes due 2029 150.0 150.0 Senior Credit Facility: November 2020 Term Loan due 2023 200.0 200.0 Revolving credit loans — — Total outstanding borrowings 1,000.0 1,000.0 Less: unamortized debt discounts and issuance costs (13.6) (15.7) Total debt 986.4 984.3 Less: current portion of long-term debt — — Long-term debt $ 986.4 $ 984.3 Outstanding letters of credit $ 52.9 $ 48.7 1.75% Senior Notes due 2030 On October 30, 2020, the Company issued and sold, in a public offering, $650 million in aggregate principal amount of senior unsecured notes due November 1, 2030 bearing interest at 1.75% per annum (the “1.75% Senior Notes”). The entire principal amount of the 1.75% Senior Notes is due in full on November 1, 2030. Interest is payable semi-annually in arrears on each November 1 and May 1. The terms of the 1.750% Notes are governed by an indenture dated as of October 30, 2020 (the “Base Indenture”) between the Company and Regions Bank, as trustee, as amended and supplemented by a first supplemental indenture dated as of October 30, 2020 (the “Supplemental Indenture”) between the Company and Regions Bank, as trustee. The 1.75% Senior Notes are senior unsecured debt obligations of the Company and will rank equally with the Company’s other senior unsecured liabilities and senior to any future subordinated indebtedness of the Company. The 1.75% Senior Notes are subject to customary covenants restricting the Company’s ability, subject to certain exceptions, to incur debt secured by liens, to enter into sale and leaseback transactions or to merge or consolidate with another entity or sell substantially all of its assets to another person. At any time prior to August 1, 2030, the Company will have the right, at its option, to redeem the 1.75% Senior Notes, in whole or in part, at any time and from time to time, by paying the greater of 100% of the principal amount of the 1.75% Senior Notes to be redeemed, or the sum of the present values of the remaining scheduled payments of principal and interest through the par call date, plus, in each case, accrued and unpaid interest to, but not including, the date of redemption. In addition, on or after August 1, 2030, the Company will have the right, at its option, to redeem the 1.75% Senior Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the 1.75% Senior Notes to be redeemed, plus accrued and unpaid interest to, but not including, the date of redemption. If a Change of Control Triggering Event (as defined in the Supplemental Indenture) occurs, unless the Company has exercised its right to redeem the 1.75% Senior Notes, holders of the 1.75% Senior Notes may require the Company to repurchase all or any part of such holder’s 1.75% Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, on such 1.75% Senior Notes to, but not including, the purchase date. Upon the occurrence of an event of default with respect to the 1.75% Senior Notes, which includes payment defaults, defaults in the performance of certain covenants, cross defaults, and bankruptcy and insolvency related defaults, the Company’s obligations under the 1.75% Senior Notes may be accelerated, in which case the entire principal amount of the 1.75% Senior Notes would be due and payable immediately. Senior Note Facility (including 3.70% Senior Notes due 2029) On August 14, 2017, the Company entered into a note purchase and private shelf agreement (the “Note Purchase Agreement”), as amended from time to time, pursuant to which the Company agreed to sell, in a private placement, $150 million aggregate principal amount of senior unsecured notes due August 14, 2029 bearing interest at 3.70% per annum (the “3.70% Senior Notes”). The entire principal amount of the 3.70% Senior Notes is due in full on August 14, 2029. Interest is 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. 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 $300 million minus the aggregate principal amount of all notes outstanding and issued under the Note Purchase Agreement. 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 November 4, 2023, unless earlier terminated in accordance with the terms of the Note Purchase Agreement. Pursuant to the Note Purchase Agreement, the 3.70% Senior Notes and any Shelf Notes (collectively, the "Senior Note Facility") 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 Senior Note Facility being redeemed, together with accrued and unpaid interest thereon and a make whole amount calculated by discounting all remaining scheduled payments on the Senior Note Facility by the yield on the U.S. Treasury security with a maturity equal to the remaining average life of the Senior Note Facility plus 0.50%. Senior Credit Facility On February 19, 2016, the Company entered into a senior credit facility, as amended from time to time, and as amended and restated on November 4, 2020 (the “Senior Credit Facility”), which provides borrowing capacity under term loan facilities as well as a revolving credit facility. There are no compensating balance requirements associated with the Senior Credit Facility. The Senior Credit Facility contains a $500 million revolving credit facility (the “Revolver”) with a sublimit of $50 million for swingline loans and a sublimit of $150 million for letters of credit. This agreement is unsecured and matures on November 4, 2023, which, subject to satisfaction of certain terms and conditions, may be extended at the option of the Company to November 4, 2024 (as may be extended, the “Senior Credit Facility Maturity Date”). Under the Senior Credit Facility, on November 4, 2020, a $200 million term loan (the “November 2020 Term Loan”) was extended to the Company. The November 2020 Term Loan is unsecured and the entire principal amount is due in full on the Senior Credit Facility Maturity Date. Borrowings under both the Revolver and the November 2020 Term Loan each bear interest either at the bank’s base rate (3.250% at December 25, 2021) plus an additional amount ranging from 0.000% to 0.375% (0.125% at December 25, 2021) or at the LIBOR (0.101% at December 25, 2021) plus an additional amount ranging from 0.875% to 1.375% per annum (1.125% at December 25, 2021), adjusted based on the Company's public credit ratings. The Company is also required to pay, quarterly in arrears, a commitment fee related to unused capacity on the Revolver ranging from 0.090% to 0.200% per annum (0.125% at December 25, 2021), adjusted based on the Company's public credit ratings. On February 19, 2016, the Company entered into a $200 million term loan agreement (the “February 2016 Term Loan”). This agreement was repaid in full on November 4, 2020 and is no longer in effect. On June 15, 2017, the Company entered into a $100 million incremental term loan agreement (the “June 2017 Term Loan”). This agreement was repaid in full on November 4, 2020 and is no longer in effect. On March 12, 2020, the Company entered into a $200 million incremental term loan agreement (the “March 2020 Term Loan”). This agreement was repaid in full on November 4, 2020 and is no longer in effect. On April 22, 2020, the Company entered into a $350 million incremental term loan agreement (the "April 2020 Term Loan"). This agreement was repaid in full on October 30, 2020 and is no longer in effect. Covenants and Default Provisions of the Debt Agreements The 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 2.0 to 1.0 as of the last day of each fiscal quarter. The leverage ratio compares total funded debt to consolidated EBITDAR. The leverage ratio shall be less than or equal to 4.0 to 1.0 as of the last day of each fiscal quarter. The Debt Agreements also contain certain other restrictions regarding additional subsidiary indebtedness, business operations, subsidiary guarantees, mergers, consolidations and sales of assets, transactions with subsidiaries or affiliates, and liens. As of December 25, 2021, 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 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. | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Share-Based Compensation: Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and certain transactions under the Company’s ESPP. Share-based compensation expense is recognized based on the grant date fair value of all stock options, restricted stock units, and performance-based restricted share units. Share based compensation expense is also recognized for the value of the 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the market value on the first day of the purchase period or the market value on the purchase date, whichever is lower, and the employee’s purchase price. There were no significant modifications to the Company's share-based compensation plans since the adoption of the 2018 Omnibus Incentive Plan (the “2018 Plan”) on May 10, 2018, which replaced the 2009 Stock Incentive Plan. Following the adoption of the 2018 Plan, no further grants may be made under the 2009 Stock Incentive Plan. Under our share-based compensation plans, awards may be granted to officers, non-employee directors, and other employees. 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 awards will expire no later than ten Share-based compensation expense, including changes in expense for modifications, if any, of awards, was $47.6 million, $37.3 million, and $31.1 million for fiscal 2021, 2020, and 2019, respectively. Stock Options 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 2021, 2020, and 2019, as well as a summary of the methodology applied to develop each assumption, are as follows: Fiscal Year 2021 2020 2019 Expected price volatility 29.8% - 30.3% 26.7% - 30.0% 26.4% - 27.6% Risk-free interest rate 0.3% - 1.0% 0.2% - 1.3% 1.6% - 2.5% Weighted average expected lives (in years) 4.3 4.3 4.5 Forfeiture rate 7.0 % 7.0 % 7.3 % Dividend yield 1.5 % 1.5 % 1.4 % 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 term of the option. An increase in the risk-free interest rate will increase compensation expense. Weighted Average Expected Term — 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 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 term 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: Stock Option Activity Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( in thousands) Outstanding at December 26, 2020 1,932,410 80.44 5.8 $ 128,411 Granted 248,808 145.87 $ 30.78 Exercised (974,878) 77.63 Canceled (38,029) 106.98 Outstanding at December 25, 2021 1,168,311 $ 95.85 6.9 $ 154,706 Exercisable at December 25, 2021 598,807 $ 77.15 5.4 $ 90,489 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 25, 2021, total unrecognized compensation expense related to non-vested stock options was approximately $8.4 million with a weighted average expense recognition period of 1.8 years. There were no material modifications to options in fiscal 2021, 2020, or 2019. Other information relative to options activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total fair value of stock options vested $ 8,478 $ 12,546 $ 16,060 Total intrinsic value of stock options exercised $ 90,532 $ 64,395 $ 45,101 Restricted Stock Units The Company issues shares for restricted stock units once vesting occurs and related restrictions lapse. The fair value of the restricted stock units 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 units generally vest over a one three Restricted Stock Unit Activity Restricted Stock Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 595,645 $ 85.27 Granted 276,268 144.52 Vested (305,704) 82.51 Forfeited (42,790) 118.70 Restricted at December 25, 2021 523,419 $ 115.59 As of December 25, 2021, total unrecognized compensation expense related to non-vested restricted stock units was approximately $36.4 million with a weighted average expense recognition period of 1.9 years. There were no material modifications to restricted stock units in fiscal 2021, 2020, or 2019. Other information relative to restricted stock unit activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total grant date fair value of restricted stock units vested and issued $ 25,222 $ 17,935 $ 8,301 Total intrinsic value of restricted stock units vested and issued $ 47,136 $ 23,011 $ 10,623 Performance-Based Restricted Share Units We issue performance-based restricted share units to senior executives that represent shares potentially issuable in the future, subject to the achievement of specified performance goals. The performance metrics for the units are growth in net sales and growth in earnings per diluted share over a specified performance period. The performance metrics for the performance-based restricted share units granted in fiscal 2021 also include a relative total shareholder return ("TSR") modifier such that the actual number of shares that vest at the end of the respective three-year period is determined based on the Company's TSR performance relative to the constituents of the S&P 500 as well as the level of achievement of the performance goals. If the performance targets are achieved, the performance-based restricted share units will be issued based on the achievement level, inclusive of the relative TSR modifier and the grant date fair value, and will cliff vest in full on the third anniversary of the date of the grant. The fair value of the performance-based restricted share units is estimated using a Monte Carlo simulation model on the grant date. Key assumptions used in the Monte Carlo simulation for the performance shares with a TSR modifier granted during fiscal 2021 include an expected volatility of 31.47%, a risk-free interest rate of 0.18% and a compounded dividend yield of 1.13%. A summary of performance-based restricted share unit activity is presented below: Performance-Based Restricted Share Unit Activity Performance-Based Restricted Share Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 143,268 $ 87.94 Granted (a) 60,317 148.05 Vested (10,015) 64.70 Forfeited (6,552) 104.65 Restricted at December 25, 2021 187,018 $ 107.99 (a) Assumes 100% target level achievement of the relative performance targets. The actual number of shares that will be issued, which may be higher or lower than the target, will be determined by the level of achievement of the relative performance targets, inclusive of the TSR modifier. As of December 25, 2021, total unrecognized compensation expense related to non-vested performance-based restricted share units was approximately $17.4 million with a weighted average expense recognition period of 1.9 years There were no material modifications to performance-based restricted share units in fiscal 2021, 2020, or 2019. Other information relative to performance-based restricted share unit activity during fiscal 2021 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total grant date fair value of performance-based restricted share units vested and issued $ 648 $ 1,895 $ 2,035 Total intrinsic value of performance-based restricted share units vested and issued $ 1,538 $ 2,826 $ 2,666 Shares Withheld to Satisfy Tax Withholding Requirements For the majority of restricted stock units and performance-based restricted share units granted, the number of shares issued on the date the stock awards vest is net of shares withheld by the Company to satisfy the minimum statutory tax withholding requirements, which the Company pays on behalf of its employees. The Company issued 219,723, 186,751, and 103,124 shares as a result of vested restricted stock units and performance-based restricted share units during fiscal 2021, 2020, and 2019, 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 95,996, 81,946, and 41,786 shares withheld to satisfy $14.9 million, $7.8 million, and $3.8 million of employees’ tax obligations during fiscal 2021, 2020, and 2019, respectively. 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 48,446, 63,704, and 61,678 shares of common stock during fiscal 2021, 2020, and 2019, respectively. The total cost related to the ESPP, including the compensation expense calculations, was approximately $1.4 million, $1.4 million, and $1.1 million in fiscal 2021, 2020, and 2019, respectively. There is a maximum of 16.0 million shares of common stock that are reserved under the ESPP. At December 25, 2021, there were approximately 11.8 million remaining shares of common stock reserved for future issuance under the ESPP. |
Leases
Leases - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2021 | Dec. 26, 2020 | |
Leases [Abstract] | ||
Leases | Leases: The Company leases the majority of its retail store locations, two distribution sites, its Merchandise Innovation Center, and certain equipment under various non-cancellable operating leases. The leases have varying terms and expire at various dates through 2042. Store leases typically have initial terms of between 10 years and 15 years, with two four five The Company accounts for lease components (e.g., fixed payments including rent, real estate taxes, and insurance costs) together with non-lease components (e.g., fixed payment common-area maintenance) as a single component for all classes of underlying assets. Certain lease agreements require variable payments based upon actual costs of common-area maintenance, real estate taxes, and insurance. Further, certain lease agreements require variable payments based upon store sales above agreed-upon sales levels for the year and others require payments adjusted periodically for inflation. As substantially all of our leases do not provide an implicit rate, we estimate our collateralized incremental borrowing rate based upon a Company specific credit rating and yield curve analysis at commencement or modification date in determining the present value of lease payments. The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. Short-term lease cost during the periods presented was immaterial. In addition to the operating lease right-of-use assets presented on the Consolidated Balance Sheets, assets, net of accumulated amortization, under finance leases of $32.0 million and $33.5 million are recorded within the Property and equipment, net line on the Consolidated Balance Sheets as of December 25, 2021 and December 26, 2020, respectively. The following table summarizes the Company’s classification of lease cost (in thousands): Fiscal Year Ended Statement of Income Location December 25, 2021 December 26, 2020 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 5,085 $ 4,765 Interest on lease liabilities Interest expense, net 1,740 1,765 Operating lease cost Selling, general and administrative expenses 400,908 379,318 Variable lease cost Selling, general and administrative expenses 79,479 80,154 Net lease cost $ 487,212 $ 466,002 The following table summarizes the future maturities of the Company’s lease liabilities (in thousands): Operating Leases (a) Finance Leases Total 2022 $ 418,059 $ 5,542 $ 423,601 2023 406,847 4,382 411,229 2024 383,843 4,397 388,240 2025 360,302 4,324 364,627 2026 326,304 4,294 330,599 After 2026 1,540,093 23,281 1,563,375 Total lease payments 3,435,449 46,220 3,481,669 Less: Interest (539,283) (9,475) (548,758) Present value of lease liabilities $ 2,896,167 $ 36,745 $ 2,932,912 (a) Operating lease payments exclude $239.2 million of legally binding minimum lease payments for leases signed, but not yet commenced. The following table summarizes the Company’s lease term and discount rate: December 25, 2021 December 26, 2020 Weighted-average remaining lease term (years): Finance leases 10.5 10.4 Operating leases 10.0 9.1 Weighted-average discount rate: Finance leases 4.8 % 4.9 % Operating leases 3.6 % 4.1 % The following table summarizes the other information related to the Company’s lease liabilities (in thousands): Fiscal Year Ended December 25, 2021 December 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows used for finance leases $ 4,580 $ 4,170 Operating cash flows used for finance leases 1,740 1,765 Operating cash flows for operating leases 404,864 385,529 | |
Lease Term Expiration Through Date | 2042 | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | $ 32,000 | $ 33,500 |
Capital Stock and Dividends
Capital Stock and Dividends | 12 Months Ended |
Dec. 25, 2021 | |
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 thousand shares of preferred stock, with such designations, rights and preferences as may be determined from time to time by the Company’s Board of Directors. Dividends During fiscal 2021 and 2020, the Company’s Board of Directors declared the following cash dividends: Date Declared Dividend Amount Record Date Date Paid November 3, 2021 $0.52 November 22, 2021 December 8, 2021 August 4, 2021 $0.52 August 23, 2021 September 8, 2021 May 5, 2021 $0.52 May 24, 2021 June 8, 2021 January 27, 2021 $0.52 February 22, 2021 March 9, 2021 November 4, 2020 $0.40 November 23, 2020 December 8, 2020 August 5, 2020 $0.40 August 24, 2020 September 9, 2020 May 6, 2020 $0.35 May 26, 2020 June 9, 2020 February 5, 2020 $0.35 February 24, 2020 March 10, 2020 It is the present intention of the Company’s Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment amount of future dividends will be determined by the Company’s Board of Directors in its sole discretion and will depend upon the earnings, financial condition, and capital needs of the Company, along with any other factors which the Company’s Board of Directors deem relevant. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 25, 2021 | |
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 which was announced in February 2007. As of December 25, 2021, the authorization amount of the program, which has been increased from time to time, was authorized for up to $4.5 billion, exclusive of any fees, commissions or other expenses related to such repurchases. The total authorized amount was increased by the Company's Board of Directors on January 26, 2022 by $2.0 billion for a total authorization of $6.5 billion. The share repurchase program does not have an expiration date. 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, temporarily paused, or terminated at any time without prior notice. As of December 25, 2021, prior to the expanded $2.0 billion repurchase authorization, the Company had remaining authorization under the share repurchase program of $345.0 million, exclusive of any fees, commissions or other expenses. The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases in fiscal 2021, 2020, and 2019, respectively (in thousands, except per share amounts): Fiscal Year 2021 2020 2019 Total number of shares repurchased 4,364 3,439 5,384 Average price paid per share $ 183.07 $ 99.72 $ 99.05 Total cash paid for share repurchases $ 798,893 $ 342,957 $ 533,319 Shares repurchased in fiscal 2020 were impacted by the temporary suspension of our share repurchase program from March 12, 2020 until November 5, 2020, in order to strengthen our liquidity and preserve cash while navigating the COVID-19 pandemic. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 25, 2021 | |
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): Fiscal Year 2021 Net Income Shares Per Share Amount Basic net income per share: $ 997,114 114,794 $ 8.69 Dilutive effect of share-based awards — 1,030 (0.08) Diluted net income per share: $ 997,114 115,824 $ 8.61 Fiscal Year 2020 Net Income Shares Per Share Amount Basic net income per share: $ 748,958 116,370 $ 6.44 Dilutive effect of share-based awards — 1,066 (0.06) Diluted net income per share: $ 748,958 117,436 $ 6.38 Fiscal Year 2019 Net Income Shares Per Share Amount Basic net income per share: $ 562,354 119,727 $ 4.70 Dilutive effect of share-based awards — 1,016 (0.04) Diluted net income per share: $ 562,354 120,743 $ 4.66 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 25, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The provision for income taxes consists of the following (in thousands): Fiscal Year 2021 2020 2019 Current tax expense: Federal $ 221,152 $ 211,228 $ 128,490 State 34,238 38,511 25,091 Total current 255,390 249,739 153,581 Deferred tax expense/(benefit): Federal 24,303 (21,997) 11,770 State 3,281 (8,553) (4,328) Total deferred 27,584 (30,550) 7,442 Total provision $ 282,974 $ 219,189 $ 161,023 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): December 25, 2021 December 26, 2020 Tax assets: Inventory valuation $ 23,365 $ 20,539 Accrued employee benefits costs 36,810 44,625 Nondeductible reserves 7,099 5,967 Finance lease liabilities 8,958 8,595 Operating lease liabilities 740,478 645,719 Deferred compensation 12,201 12,289 Workers' compensation insurance 14,271 11,804 General liability insurance 9,402 7,346 Income tax credits 7,986 8,744 Amortization 7,803 7,269 Other 12,799 10,746 881,172 783,643 Tax liabilities: Finance lease assets (7,797) (7,584) Operating lease right-of-use assets (702,197) (612,658) Depreciation (161,137) (124,280) Other (7,604) (7,535) (878,735) (752,057) Net deferred tax asset $ 2,437 $ 31,586 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 $6.6 million and $8.6 million as of December 25, 2021 and December 26, 2020, respectively, with varying dates of expiration through 2036. The Company provided no valuation allowance as of December 25, 2021 and December 26, 2020 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): Fiscal Year 2021 2020 2019 Tax provision at statutory rate $ 268,819 $ 203,311 $ 151,909 Tax effect of: State income taxes, net of federal tax benefits 36,116 27,642 19,722 Tax credits, net of federal tax benefits (13,157) (8,828) (7,768) Share-based compensation programs (13,368) (9,303) (4,484) Other 4,564 6,367 1,644 Total income tax expense $ 282,974 $ 219,189 $ 161,023 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 2017. Various states have completed an examination of our income tax returns for 2017 through 2019 with minimal adjustments. The total amount of unrecognized tax positions that, if recognized, would decrease the effective tax rate, is $3.2 million at December 25, 2021. 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 25, 2021. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (exclusive of interest and penalties) is as follows (in thousands): Fiscal Year 2021 2020 2019 Balance at beginning of year $ 3,236 $ 2,760 $ 2,451 Additions based on tax positions related to the current year 927 816 650 Additions for tax positions of prior years 51 32 59 Reductions for tax positions of prior years (465) (372) (400) Balance at end of year $ 3,749 $ 3,236 $ 2,760 The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in the U.S. on March 27, 2020. The enactment of this legislation did not have a material impact on income tax expense in fiscal 2020. However, the Company did elect to participate in the deferral of the employer’s share of social security tax deposits, with $24.5 million included within other accrued expenses in the Consolidated Balance Sheet as of December 25, 2021. This amount will become due on December 31, 2022. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 25, 2021 | |
Retirement Benefits [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 were approximately $15.3 million, $12.9 million, and $9.8 million during fiscal 2021, 2020, and 2019, 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, were $0.3 million, $0.6 million, and $0.7 million during fiscal 2021, 2020, and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 25, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies: Contractual Commitments At December 25, 2021, the Company had contractual commitments of approximat ely $107.8 million, of which $56.9 million is related to the construction of the new distribution center in Navarre, Ohio, and the remaining is related to purchase obligations such as inventory purchases and marketing-related contracts. The Company does not have material contractual commitments related to construction projects extending greater than twelve months. In addition, the Company had $239.2 million le gally binding minimum lease payments for leases signed, but not yet commenced. Letters of Credit At December 25, 2021, there were $52.9 million outstanding letters of credit under the Senior Credit Facility. Litigation On October 9, 2020, an alleged stockholder, the City of Pontiac Police and Fire Retirement System, filed a derivative lawsuit in the U.S. District Court for the Middle District of Tennessee, purportedly on the Company's behalf, against certain current and former members of our Board of Directors, and the Company as a nominal defendant, seeking unspecified compensatory and punitive damages payable to the Company, disgorgement, restitution, corporate governance and hiring changes, mandated community investment, and attorneys' fees and costs. Plaintiff alleges that defendants violated the federal securities laws governing proxy solicitations and breached their fiduciary duties by misrepresenting the Company’s commitment to and support for diversity and inclusion. The Company disputes the allegations of the complaint. The Company and the individual defendants moved to dismiss the complaint based on plaintiff’s failure to make a demand on the Board of Directors and to state a claim upon which relief may be granted. While the ultimate outcome of this matter is currently not determinable, we do not believe this litigation will have a material impact to the Company's Consolidated Financial Statements. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 25, 2021 | |
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 2021, 2020, and 2019: Percent of Net Sales Fiscal Year Product Category: 2021 2020 2019 Livestock and Pet 47 % 47 % 47 % Hardware, Tools and Truck 21 21 21 Seasonal, Gift and Toy Products 21 21 20 Clothing and Footwear 8 7 8 Agriculture 3 4 4 Total 100 % 100 % 100 % |
Subsequent Events
Subsequent Events | Feb. 17, 2021 |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events: On January 26, 2022, the Company announced plans to build a new distribution center in Maumelle, Arkansas. This new distribution center is expected to be approximately 900,000 square feet. Construction is planned to begin in the middle of 2022 and is currently anticipated to be completed in late 2023. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 25, 2021 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Founded in 1938, Tractor Supply Company (the “Company” or "Tractor Supply" or “we” or “our” or “us”) is the largest rural lifestyle retailer in the United States (“U.S.”). The Company is focused on supplying the needs of recreational farmers, ranchers, and all those who enjoy living the rural lifestyle (which we refer to as the “ Out Here ” lifestyle). The Company's stores are located primarily in towns outlying major metropolitan markets and in rural communities. The Company also owns and operates Petsense, LLC (“Petsense”), a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-sized communities, and offering a variety of pet products and services. At December 25, 2021, the Company operated a total of 2,181 retail stores in 49 states (2,003 Tractor Supply and Del’s retail stores and 178 Petsense retail stores) and also offered an expanded assortment of products through the Tractor Supply Company mobile application and online at TractorSupply.com and Petsense.com . On February 17, 2021, the Company announced that it entered into an agreement to acquire all of the outstanding equity interests of Orscheln Farm and Home, LLC, a farm and ranch retailer with 167 retail stores in 11 states, in an all-cash transaction for approximately $320 million. The Company intends to fund the acquisition through cash-on-hand. The acquisition is conditioned on the receipt of regulatory clearance and the satisfactory completion of customary closing conditions within a specified timeframe. |
Basis of Presentation | Basis of PresentationThe accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC"). |
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 years ended December 25, 2021, December 26, 2020, and December 28, 2019, all 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 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 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 | Shrinkage The Company typically 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. The Company assessed the risks associated with the stores not inventoried and concluded there is no material risk of misstatement to the financial statements for the stores not inventoried and further concluded that effective compensating controls are in place to ensure completeness and accuracy of reported inventory balances and estimated shrink losses. |
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 sold 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including lease right-of-use 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 or asset group to its 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 related asset, the Company calculates an impairment loss. The impairment loss calculation compares the carrying value of the related asset or asset group to its estimated fair value, which may be based on an estimated future cash flow model, market valuation, or other valuation technique, as appropriate. 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 2021 or 2019 related to long-lived assets. In fiscal 2020, we recognized $5.1 million of impairment charges related to long-lived assets for Petsense stores . Impairment charges, if recognized, 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. Our annual impairment evaluation is conducted on the first day of our fiscal fourth quarter. 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 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, the income approach, or a combination of both. The income approach involves forecasting projected financial information (such as revenue growth rates, profit margins, tax rates, and capital expenditures) and selecting a discount rate that reflects the risk inherent in estimated future cash flows. Under the market approach, the fair value is based on observed market data. 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 impairment charges were recognized in fiscal 2021 or 2019 related to indefinite-lived intangible assets. As described in further detail in Note 3 to the Consolidated Financial Statements, in fiscal 2020 we recognized goodwill impairment of $60.8 million and trade name asset impairment of $8.2 million related to Petsense . Impairment charges, if recognized, are included as a separate line item within 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. The Company had a liability for sales returns of $17.9 million and $14.2 million as of December 25, 2021 and December 26, 2020, respectively. |
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 $4.2 million, $3.6 million, and $3.0 million in fiscal 2021, 2020, and 2019, respectively. |
Cost of Merchandise Sold | Cost of Merchandise Sold Cost of merchandise sold includes the total cost of products sold; freight and duty 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; tariffs on imported products; 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 digital and social media offerings, television, newspaper circulars, and customer-targeted direct e-mail and direct mail, as well as limited events through radio and other media channels. 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 were approximately $95.4 million, $100.9 million, and $86.6 million for fiscal 2021, 2020, and 2019, respectively. Prepaid advertising costs were approximately $1.7 million and $1.6 million as of December 25, 2021, and December 26, 2020, 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 were approximately $367.4 million, $292.6 million, and $231.5 million for fiscal 2021, 2020, and 2019, 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 $10.4 million, $8.6 million, and $8.1 million for fiscal 2021, 2020, and 2019, 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 non-qualified stock options, restricted stock units, and performance-based restricted share units. Performance-based restricted share units are subject to performance conditions that include both Company and market performance. In addition, the Company offers an Employee Stock Purchase Plan (“ESPP”) to eligible employees. 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, expected term and forfeiture rates. 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. The forfeiture rate at the time of valuation was estimated based on historical experience for similar options and 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 units is the closing stock 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 fair value of the Company's performance-based restricted share units is estimated using a Monte Carlo simulation model on the grant date. Key assumptions used in the Monte Carlo simulation include expected volatility, dividend yield and risk-free interest rate. 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. |
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. |
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. |
Net Income Per Share | Net Income Per ShareThe Company presents both basic and diluted net income per share on the Consolidated Statements of Income. 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 during the period. Dilutive shares are computed using the treasury stock method for share-based awards. Performance-based restricted share units are included in diluted shares only if the related performance conditions have been considered satisfied as of the end of the reporting period. |
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. |
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. The fair value of the interest rate swaps, excluding accrued interest, was a net asset of $1.8 million and net liability $4.4 million as of December 25, 2021 and December 26, 2020, respectively. |
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, duties, and tariffs. Inventories are net of shrinkage, obsolescence, other valuations, and vendor allowances. |
Property and Equipment | Property and Equipment Property and equipment are initially recorded 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 remaining term of the lease or the useful life of the improvement, whichever is less. The following table summarizes the Company's property and equipment balances and includes the estimated useful lives which are generally applied (in thousands, except estimated useful lives): Estimated Useful Lives December 25, December 26, Land $ 100,129 $ 100,138 Buildings and improvements 1 – 35 years 1,517,052 1,319,559 Furniture, fixtures and equipment 5 – 10 years 900,272 773,178 Computer software and hardware 2 – 7 years 694,455 563,509 Construction in progress 211,486 73,950 Property and equipment, gross 3,423,394 2,830,334 Accumulated depreciation and amortization (1,805,588) (1,581,374) Property and equipment, net $ 1,617,806 $ 1,248,960 The Company entered into agreements with various governmental entities in the states of Kentucky, Georgia, Ohio 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), its distribution center in Navarre, Ohio (Stark 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 25, 2021: 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 $58.0 Brentwood, Tennessee Store Support Center 10 years $78.0 $75.3 Navarre, Ohio Distribution Center 30 years $90.0 $— 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 two seven |
Store Closing Costs | Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those stores that are underperforming. 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 Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment, if any, of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. As substantially all of our leases do not provide an implicit rate, we estimate our collateralized incremental borrowing rate based upon a Company specific credit rating and yield curve analysis at commencement or modification date in determining the present value of lease payments. Assets under finance 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. |
New accounting pronouncements | New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848): Scope." This collective guidance is in response to accounting concerns regarding contract modifications and hedge accounting because of impending rate reform associated with structural risks of interbank offered rates ("IBOR"s), and, particularly, the risk of cessation of the London Inter-Bank Offer Rate ("LIBOR") related to regulators in several jurisdictions around the world having undertaken reference rate reform initiatives to identify alternative reference rates. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The adoption of this guidance is effective for all entities as of March 12, 2020 |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Accounting Policies [Abstract] | |
Estimated useful lives of property, plant and equipment | Property and Equipment Property and equipment are initially recorded 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 remaining term of the lease or the useful life of the improvement, whichever is less. The following table summarizes the Company's property and equipment balances and includes the estimated useful lives which are generally applied (in thousands, except estimated useful lives): Estimated Useful Lives December 25, December 26, Land $ 100,129 $ 100,138 Buildings and improvements 1 – 35 years 1,517,052 1,319,559 Furniture, fixtures and equipment 5 – 10 years 900,272 773,178 Computer software and hardware 2 – 7 years 694,455 563,509 Construction in progress 211,486 73,950 Property and equipment, gross 3,423,394 2,830,334 Accumulated depreciation and amortization (1,805,588) (1,581,374) Property and equipment, net $ 1,617,806 $ 1,248,960 |
Industrial Revenue Bonds | The terms and amounts authorized and drawn under each industrial revenue bond agreement are outlined as follows, as of December 25, 2021: 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 $58.0 Brentwood, Tennessee Store Support Center 10 years $78.0 $75.3 Navarre, Ohio Distribution Center 30 years $90.0 $— |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Key assumptions in fair value determination | The ranges of key assumptions used in determining the fair value of options granted during fiscal 2021, 2020, and 2019, as well as a summary of the methodology applied to develop each assumption, are as follows: Fiscal Year 2021 2020 2019 Expected price volatility 29.8% - 30.3% 26.7% - 30.0% 26.4% - 27.6% Risk-free interest rate 0.3% - 1.0% 0.2% - 1.3% 1.6% - 2.5% Weighted average expected lives (in years) 4.3 4.3 4.5 Forfeiture rate 7.0 % 7.0 % 7.3 % Dividend yield 1.5 % 1.5 % 1.4 % |
Summary of stock option activity | A summary of stock option activity is as follows: Stock Option Activity Options Weighted Average Exercise Price Weighted Average Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value ( in thousands) Outstanding at December 26, 2020 1,932,410 80.44 5.8 $ 128,411 Granted 248,808 145.87 $ 30.78 Exercised (974,878) 77.63 Canceled (38,029) 106.98 Outstanding at December 25, 2021 1,168,311 $ 95.85 6.9 $ 154,706 Exercisable at December 25, 2021 598,807 $ 77.15 5.4 $ 90,489 |
Other information relative to option activity | Other information relative to options activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total fair value of stock options vested $ 8,478 $ 12,546 $ 16,060 Total intrinsic value of stock options exercised $ 90,532 $ 64,395 $ 45,101 |
Restricted stock units activity | A summary of restricted stock unit activity is presented below: Restricted Stock Unit Activity Restricted Stock Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 595,645 $ 85.27 Granted 276,268 144.52 Vested (305,704) 82.51 Forfeited (42,790) 118.70 Restricted at December 25, 2021 523,419 $ 115.59 |
Other information relative to restricted unit activity | Other information relative to restricted stock unit activity during fiscal 2021, 2020, and 2019 is as follows (in thousands): Fiscal Year 2021 2020 2019 Total grant date fair value of restricted stock units vested and issued $ 25,222 $ 17,935 $ 8,301 Total intrinsic value of restricted stock units vested and issued $ 47,136 $ 23,011 $ 10,623 |
Performance-based Share Unit Activity | A summary of performance-based restricted share unit activity is presented below: Performance-Based Restricted Share Unit Activity Performance-Based Restricted Share Units Weighted Average Grant Date Fair Value Restricted at December 26, 2020 143,268 $ 87.94 Granted (a) 60,317 148.05 Vested (10,015) 64.70 Forfeited (6,552) 104.65 Restricted at December 25, 2021 187,018 $ 107.99 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): December 25, December 26, 1.75% Senior Notes due 2030 $ 650.0 $ 650.0 3.70% Senior Notes due 2029 150.0 150.0 Senior Credit Facility: November 2020 Term Loan due 2023 200.0 200.0 Revolving credit loans — — Total outstanding borrowings 1,000.0 1,000.0 Less: unamortized debt discounts and issuance costs (13.6) (15.7) Total debt 986.4 984.3 Less: current portion of long-term debt — — Long-term debt $ 986.4 $ 984.3 Outstanding letters of credit $ 52.9 $ 48.7 |
Leases, Supplemental Lease Liab
Leases, Supplemental Lease Liability - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2021 | Dec. 26, 2020 | |
Supplemental, Lease Liability [Line Items] | ||
Operating Lease, Payments, Use | $ 404,864 | $ 385,529 |
Finance Lease, Principal Payments | 4,580 | 4,170 |
Finance Lease, Interest Payment on Liability | $ 1,740 | $ 1,765 |
Lease, Cost | The following table summarizes the Company’s classification of lease cost (in thousands): Fiscal Year Ended Statement of Income Location December 25, 2021 December 26, 2020 Finance lease cost: Amortization of lease assets Depreciation and amortization $ 5,085 $ 4,765 Interest on lease liabilities Interest expense, net 1,740 1,765 Operating lease cost Selling, general and administrative expenses 400,908 379,318 Variable lease cost Selling, general and administrative expenses 79,479 80,154 Net lease cost $ 487,212 $ 466,002 | |
Lessee, Operating Lease, Liability, Maturity | The following table summarizes the future maturities of the Company’s lease liabilities (in thousands): Operating Leases (a) Finance Leases Total 2022 $ 418,059 $ 5,542 $ 423,601 2023 406,847 4,382 411,229 2024 383,843 4,397 388,240 2025 360,302 4,324 364,627 2026 326,304 4,294 330,599 After 2026 1,540,093 23,281 1,563,375 Total lease payments 3,435,449 46,220 3,481,669 Less: Interest (539,283) (9,475) (548,758) Present value of lease liabilities $ 2,896,167 $ 36,745 $ 2,932,912 (a) Operating lease payments exclude $239.2 million of legally binding minimum lease payments for leases signed, but not yet commenced. | |
Lessee, Operating Lease, Disclosure | The following table summarizes the Company’s lease term and discount rate: December 25, 2021 December 26, 2020 Weighted-average remaining lease term (years): Finance leases 10.5 10.4 Operating leases 10.0 9.1 Weighted-average discount rate: Finance leases 4.8 % 4.9 % Operating leases 3.6 % 4.1 % | |
Schedule of Cash Flow, Supplemental Disclosures | The following table summarizes the other information related to the Company’s lease liabilities (in thousands): Fiscal Year Ended December 25, 2021 December 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows used for finance leases $ 4,580 $ 4,170 Operating cash flows used for finance leases 1,740 1,765 Operating cash flows for operating leases 404,864 385,529 |
Capital Stock and Dividends (Ta
Capital Stock and Dividends (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Equity [Abstract] | |
Schedule of Dividends Payable | During fiscal 2021 and 2020, the Company’s Board of Directors declared the following cash dividends: Date Declared Dividend Amount Record Date Date Paid November 3, 2021 $0.52 November 22, 2021 December 8, 2021 August 4, 2021 $0.52 August 23, 2021 September 8, 2021 May 5, 2021 $0.52 May 24, 2021 June 8, 2021 January 27, 2021 $0.52 February 22, 2021 March 9, 2021 November 4, 2020 $0.40 November 23, 2020 December 8, 2020 August 5, 2020 $0.40 August 24, 2020 September 9, 2020 May 6, 2020 $0.35 May 26, 2020 June 9, 2020 February 5, 2020 $0.35 February 24, 2020 March 10, 2020 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Earnings Per Share [Abstract] | |
Net income per share calculation | Net Income Per Share: Net income per share is calculated as follows (in thousands, except per share amounts): Fiscal Year 2021 Net Income Shares Per Share Amount Basic net income per share: $ 997,114 114,794 $ 8.69 Dilutive effect of share-based awards — 1,030 (0.08) Diluted net income per share: $ 997,114 115,824 $ 8.61 Fiscal Year 2020 Net Income Shares Per Share Amount Basic net income per share: $ 748,958 116,370 $ 6.44 Dilutive effect of share-based awards — 1,066 (0.06) Diluted net income per share: $ 748,958 117,436 $ 6.38 Fiscal Year 2019 Net Income Shares Per Share Amount Basic net income per share: $ 562,354 119,727 $ 4.70 Dilutive effect of share-based awards — 1,016 (0.04) Diluted net income per share: $ 562,354 120,743 $ 4.66 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | The provision for income taxes consists of the following (in thousands): Fiscal Year 2021 2020 2019 Current tax expense: Federal $ 221,152 $ 211,228 $ 128,490 State 34,238 38,511 25,091 Total current 255,390 249,739 153,581 Deferred tax expense/(benefit): Federal 24,303 (21,997) 11,770 State 3,281 (8,553) (4,328) Total deferred 27,584 (30,550) 7,442 Total provision $ 282,974 $ 219,189 $ 161,023 |
Deferred tax assets and liabilities | Significant components of the deferred tax assets and liabilities are as follows (in thousands): December 25, 2021 December 26, 2020 Tax assets: Inventory valuation $ 23,365 $ 20,539 Accrued employee benefits costs 36,810 44,625 Nondeductible reserves 7,099 5,967 Finance lease liabilities 8,958 8,595 Operating lease liabilities 740,478 645,719 Deferred compensation 12,201 12,289 Workers' compensation insurance 14,271 11,804 General liability insurance 9,402 7,346 Income tax credits 7,986 8,744 Amortization 7,803 7,269 Other 12,799 10,746 881,172 783,643 Tax liabilities: Finance lease assets (7,797) (7,584) Operating lease right-of-use assets (702,197) (612,658) Depreciation (161,137) (124,280) Other (7,604) (7,535) (878,735) (752,057) Net deferred tax asset $ 2,437 $ 31,586 |
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): Fiscal Year 2021 2020 2019 Tax provision at statutory rate $ 268,819 $ 203,311 $ 151,909 Tax effect of: State income taxes, net of federal tax benefits 36,116 27,642 19,722 Tax credits, net of federal tax benefits (13,157) (8,828) (7,768) Share-based compensation programs (13,368) (9,303) (4,484) Other 4,564 6,367 1,644 Total income tax expense $ 282,974 $ 219,189 $ 161,023 |
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): Fiscal Year 2021 2020 2019 Balance at beginning of year $ 3,236 $ 2,760 $ 2,451 Additions based on tax positions related to the current year 927 816 650 Additions for tax positions of prior years 51 32 59 Reductions for tax positions of prior years (465) (372) (400) Balance at end of year $ 3,749 $ 3,236 $ 2,760 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 25, 2021 | |
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 2021, 2020, and 2019: Percent of Net Sales Fiscal Year Product Category: 2021 2020 2019 Livestock and Pet 47 % 47 % 47 % Hardware, Tools and Truck 21 21 21 Seasonal, Gift and Toy Products 21 21 20 Clothing and Footwear 8 7 8 Agriculture 3 4 4 Total 100 % 100 % 100 % |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | Feb. 17, 2021USD ($)storestate | Dec. 25, 2021USD ($)statestoreh | Dec. 26, 2020USD ($) | Dec. 28, 2019USD ($) |
Nature of business | ||||
Number of states in which rural lifestyle retail stores are operated by the company | state | 49 | |||
Self insurance reserves [Abstract] | ||||
Workers compensation and general liability deductible | $ 500,000 | |||
Impairment of long-lived assets | ||||
Impairment charges | 0 | $ 5,100,000 | $ 0 | |
Goodwill and other intangible assets | ||||
Goodwill, Impairment Loss | 0 | 60,800,000 | ||
Goodwill and Intangible Asset Impairment | 0 | 68,973,000 | 0 | |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 8,200,000 | ||
Revenue recognition and sales returns | ||||
Revenue Recognition Gift Card | 4,200,000 | 3,600,000 | 3,000,000 | |
Advertising costs | ||||
Advertising expenses | 95,400,000 | 100,900,000 | 86,600,000 | |
Prepaid advertising costs | 1,700,000 | 1,600,000 | ||
Warehousing and distribution costs | ||||
Distribution center costs | 367,400,000 | 292,600,000 | 231,500,000 | |
Preopening costs | ||||
Preopening costs | $ 10,400,000 | 8,600,000 | $ 8,100,000 | |
Cash and cash equivalents | ||||
Minimum processing time for payments due from banks for customer credit card transactions | h | 24 | |||
Maximum processing time for payments due from banks for customer credit card transactions | h | 48 | |||
Fair value disclosures | ||||
Senior Credit Facility amount outstanding | $ 1,000,000,000 | 1,000,000,000 | ||
Derivative, Fair Value, Net | 1,800,000 | (4,400,000) | ||
Property and equipment | ||||
Cost of option to purchase the real property | 1 | |||
Furniture and Fixtures, Gross | 900,272,000 | 773,178,000 | ||
Computer software and hardware, gross | 694,455,000 | 563,509,000 | ||
Construction in Progress, Gross | 211,486,000 | 73,950,000 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 1,805,588,000 | 1,581,374,000 | ||
Buildings and Improvements, Gross | 1,517,052,000 | 1,319,559,000 | ||
Land | 100,129,000 | 100,138,000 | ||
Property, Plant and Equipment, Gross | 3,423,394,000 | 2,830,334,000 | ||
Property and equipment, net | 1,617,806,000 | 1,248,960,000 | ||
Reserve for sales returns | $ 17,900,000 | 14,200,000 | ||
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 two seven | |||
Software - Minimum | ||||
Property and equipment | ||||
Property, plant and equipment, useful life | 2 years | |||
Property, plant and equipment, useful life | 2 years | |||
Software Maximum | ||||
Property and equipment | ||||
Property, plant and equipment, useful life | 7 years | |||
Property, plant and equipment, useful life | 7 years | |||
Orscheln Farm and Home, LLC | ||||
Nature of business | ||||
Number of rural lifestyle retail stores operated by the company | store | 167 | |||
Number of states in which rural lifestyle retail stores are operated by the company | state | 11 | |||
Property and equipment | ||||
Consideration Transferred | $ 320,000,000 | |||
Consideration Transferred | $ 320,000,000 | |||
Self-Insurance Claims | ||||
Property and equipment | ||||
Other Assets | $ 14,900,000 | 11,200,000 | ||
Other Assets | 14,900,000 | 11,200,000 | ||
Workers' Compensation [Axis] | ||||
Self insurance reserves [Abstract] | ||||
Self-insurance reserves | 67,100,000 | 55,000,000 | ||
General Liability [Domain] | ||||
Self insurance reserves [Abstract] | ||||
Self-insurance reserves | $ 41,300,000 | $ 31,700,000 | ||
Parent Company [Member] | ||||
Nature of business | ||||
Number of rural lifestyle retail stores operated by the company | store | 2,181 | |||
Franklin, KY DC | ||||
Property and equipment | ||||
Industrial Revenue Bond, Maturity Date | 30 years | |||
Maximum Principal Amount of Bond Authorized | $ 54,000,000 | |||
Net Bond Proceeds Issued | $ 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 | |||
Net Bond Proceeds Issued | $ 58,000,000 | |||
Brentwood, TN SSC | ||||
Property and equipment | ||||
Industrial Revenue Bond, Maturity Date | 10 years | |||
Maximum Principal Amount of Bond Authorized | $ 78,000,000 | |||
Net Bond Proceeds Issued | $ 75,300,000 | |||
Navarre, OH DC [Member] | ||||
Property and equipment | ||||
Industrial Revenue Bond, Maturity Date | 30 years | |||
Maximum Principal Amount of Bond Authorized | $ 90,000,000 | |||
Net Bond Proceeds Issued | 0 | |||
TEXAS | ||||
Self insurance reserves [Abstract] | ||||
Workers compensation and general liability deductible | $ 500,000 | |||
TSCO stores [Domain] | ||||
Nature of business | ||||
Number of rural lifestyle retail stores operated by the company | store | 2,003 | |||
Petsense stores [Domain] | ||||
Nature of business | ||||
Number of rural lifestyle retail stores operated by the company | store | 178 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of shares available for future equity awards (in shares) | 9,900,000 | ||
Share-based compensation | $ 47,649 | $ 37,273 | $ 31,136 |
Vesting Term, Minimum | 1 year | ||
Vesting Term, Maximum | 3 years | ||
Payments Related to Tax Withholding for Share-based Compensation | $ 14,876 | $ 7,799 | 3,818 |
Key assumptions in fair value determination | |||
Stock option expiration date (in years) | 10 years | ||
Stock options, additional disclosures | |||
Weighted average fair value, Granted (in dollars per share) | $ 30.78 | ||
Weighted average remaining contractual term, Outstanding, end of period (in years) | 6 years 10 months 24 days | 5 years 9 months 18 days | |
Weighted average remaining contractual term, Exercisable, end of period (in years) | 5 years 4 months 24 days | ||
Aggregate intrinsic value, Outstanding, beginning of period | $ 128,411 | ||
Aggregate intrinsic value, Outstanding, end of period | 154,706 | $ 128,411 | |
Aggregate intrinsic value, Exercisable at end of period | $ 90,489 | ||
Other information relative to restricted unit activity | |||
Employee stock purchase program discount percentage | 15.00% | ||
Shared-based Compensation | $ 47,600 | 37,300 | 31,100 |
Shared-based Payment Arrangement, Amounts Withheld for Tax Withholding | 14,900 | $ 7,800 | $ 3,800 |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Total unrecognized compensation | $ 8,400 | ||
Remaining weighted average expense recognition period (in years) | 1 year 9 months 18 days | ||
Key assumptions in fair value determination | |||
Expected price volatility, minimum (in hundredths) | 2980.00% | 2670.00% | 2640.00% |
Expected price volatility, maximum (in hundredths) | 3030.00% | 3000.00% | 2760.00% |
Risk-free interest rate, minimum (in hundredths) | 0.30% | 0.20% | 1.60% |
Risk-free interest rate, maximum (in hundredths) | 1.00% | 1.30% | 2.50% |
Weighted average expected lives (in years) | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 6 months |
Forfeiture rate, minimum (in hundredths) | 7.00% | 7.00% | 7.30% |
Stock option activity | |||
Outstanding, beginning of period (in shares) | 1,932,410 | ||
Granted (in shares) | 248,808 | ||
Exercised (in shares) | 974,878 | ||
Canceled (in shares) | 38,029 | ||
Outstanding, end of period (in shares) | 1,168,311 | 1,932,410 | |
Exercisable, end of period (in shares) | 598,807 | ||
Stock options, additional disclosures | |||
Weighted average exercise price, Outstanding, beginning of period (in dollars per share) | $ 80.44 | ||
Weighted average exercise price, Granted (in dollars per share) | 145.87 | ||
Weighted average exercise price, Exercised (in dollars per share) | 77.63 | ||
Weighted average exercise price, Cancelled (in dollars per share) | 106.98 | ||
Weighted average exercise price, Outstanding, end of period (in dollars per share) | 95.85 | $ 80.44 | |
Weighted average exercise price, Exercisable, end of period (in dollars per share) | $ 77.15 | ||
Other information relative to option activity | |||
Total intrinsic value of stock options exercised | $ 90,532 | $ 64,395 | $ 45,101 |
Other information relative to restricted unit activity | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 8,478 | $ 12,546 | $ 16,060 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.50% | 1.50% | 1.40% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.50% | 1.50% | 1.40% |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based compensation | $ 1,400 | $ 1,400 | $ 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) | 48,446 | 63,704 | 61,678 |
Shares of common stock reserved for future issuance under the ESPP (in shares) | 11,800,000 | ||
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 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Total unrecognized compensation | $ 36,400 | ||
Remaining weighted average expense recognition period (in years) | 1 year 10 months 24 days | ||
Shares issued as a result of vested restricted stock units (in shares) | 219,723 | 186,751 | 103,124 |
Payments Related to Tax Withholding for Share-based Compensation | $ 14,876 | $ 7,799 | $ 3,818 |
Restricted stock units | |||
Restricted, beginning of period (in shares) | 595,645 | ||
Granted (in shares) | 276,268 | ||
Exercised (in shares) | 305,704 | ||
Forfeited (in shares) | 42,790 | ||
Restricted, end of period (in shares) | 523,419 | 595,645 | |
Restricted stock units, additional disclosures | |||
Weighted average grant date fair value, Restricted, beginning of period (in dollars per share) | $ 85.27 | ||
Weighted average grant date fair value, Granted (in dollars per share) | 144.52 | ||
Weighted average grant date fair value, Exercised (in dollars per share) | 82.51 | ||
Weighted average grant date fair value, Forfeited (in dollars per share) | 118.70 | ||
Weighted average grant date fair value, Restricted, end of period (in dollars per share) | $ 115.59 | $ 85.27 | |
Other information relative to restricted unit activity | |||
Total grant date fair value of restricted units vested and exercised | $ 25,222 | $ 17,935 | 8,301 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Vested | $ 47,136 | $ 23,011 | $ 10,623 |
Shares Paid for Tax Withholding for Share Based Compensation | 95,996 | 81,946 | 41,786 |
Performance-Based Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Total unrecognized compensation | $ 17,400 | ||
Remaining weighted average expense recognition period (in years) | 1 year 10 months 24 days | ||
Restricted stock units | |||
Restricted, beginning of period (in shares) | 143,268 | ||
Granted (in shares) | 60,317 | ||
Exercised (in shares) | 10,015 | ||
Forfeited (in shares) | 6,552 | ||
Restricted, end of period (in shares) | 187,018 | 143,268 | |
Restricted stock units, additional disclosures | |||
Weighted average grant date fair value, Restricted, beginning of period (in dollars per share) | $ 87.94 | ||
Weighted average grant date fair value, Granted (in dollars per share) | 148.05 | ||
Weighted average grant date fair value, Exercised (in dollars per share) | 64.70 | ||
Weighted average grant date fair value, Forfeited (in dollars per share) | 104.65 | ||
Weighted average grant date fair value, Restricted, end of period (in dollars per share) | $ 107.99 | $ 87.94 | |
Other information relative to restricted unit activity | |||
Total grant date fair value of restricted units vested and exercised | $ 648 | $ 1,895 | $ 2,035 |
Total intrinsic value of restricted units vested and exercised | $ 1,538 | $ 2,826 | $ 2,666 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 31.47% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.18% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.13% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 31.47% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.18% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.13% |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | $ 0 | $ 60,800,000 | |
Goodwill | $ 10,258,000 | ||
Indefinite-lived Intangible Assets Acquired | 23,100,000 | 23,100,000 | |
Indefinite-lived Intangible Assets Acquired | 23,100,000 | 23,100,000 | |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | 8,200,000 | |
Goodwill and Intangible Asset Impairment | 0 | 68,973,000 | 0 |
Petsense | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | 0 | (60,773,000) | |
Goodwill | 22,161,000 | 22,161,000 | 82,934,000 |
Tractor Supply Company | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | 0 | 0 | |
Goodwill | 10,258,000 | 10,258,000 | |
Tractor Supply Company and Petsense | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | 0 | (60,773,000) | |
Goodwill | $ 32,419,000 | $ 32,419,000 | $ 93,192,000 |
Senior Notes (Details)
Senior Notes (Details) - USD ($) $ in Millions | Dec. 25, 2021 | Nov. 04, 2020 | Oct. 30, 2020 | Aug. 14, 2017 | Dec. 25, 2021 | Dec. 26, 2020 |
Debt Instrument [Line Items] | ||||||
Senior Notes | $ 150 | $ 150 | ||||
Senior Notes - Maturity Date | Aug. 14, 2029 | |||||
Senior Notes - Interest Rate | 3.70% | 3.70% | ||||
Shelf Notes - Amount | $ 300 | $ 300 | ||||
Shelf Notes - Maximum Maturity Date Range - in Years | 12 | |||||
Shelf Notes - Maximum Issuance Date | November 4, 2023 | |||||
Debt Instrument, Percentage of Principal Amount Redeemable | 100.00% | |||||
Shelf Notes - Additional Interest Rate | 0.50 | |||||
Debt Instrument, Covenant Compliance | all | |||||
Amount of incremental credit facility which will result in modification of debt covenants | 100 million | |||||
Debt Instrument, Maturity Date | Nov. 4, 2020 | |||||
Debt Instrument, Interest Rate, Plus Stated Percentage | 1.75% | 1.75% | ||||
Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Issuance Date | Aug. 14, 2017 | |||||
Bonds | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Issuance Date | Oct. 30, 2020 | |||||
Senior Notes | $ 650 | $ 650 | $ 650 | |||
2016 Senior Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Senior Notes - Maturity Date | Nov. 4, 2024 | |||||
Debt Instrument, Maturity Date | Nov. 4, 2023 | |||||
1.750% Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Nov. 1, 2030 | |||||
Number of Financial Covenants | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Covenant Description | two | |||||
Fixed Charge Coverage Ratio Minimum Requirement | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Covenant Description | 2.0 | |||||
Leverage Ratio Maximum Requirement | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Covenant Description | 4.0 |
Senior Credit Facility - Credit
Senior Credit Facility - Credit Agreement (Details) - USD ($) $ in Thousands | Dec. 25, 2021 | Nov. 04, 2020 | Oct. 30, 2020 | Apr. 22, 2020 | Mar. 12, 2020 | Jun. 15, 2017 | Feb. 19, 2016 | Dec. 25, 2021 | Dec. 26, 2020 |
Line of Credit Facility | |||||||||
Senior Credit Facility, Maximum Borrowing Capacity | $ 500,000 | ||||||||
Swingline Loan, Maximum Borrowing Capacity | $ 50,000 | ||||||||
Debt Issuance Costs, Net | $ (13,600) | $ (13,600) | $ (15,700) | ||||||
Unsecured debt, net of debt issuance costs | 986,400 | 986,400 | 984,300 | ||||||
Unsecured Debt, Current | 0 | 0 | 0 | ||||||
Long-term Debt, Excluding Current Maturities | 986,382 | 986,382 | 984,324 | ||||||
Debt Instrument, Maturity Date | Nov. 4, 2020 | ||||||||
Unsecured Debt | 1,000,000 | 1,000,000 | 1,000,000 | ||||||
Letters of Credit Outstanding, Amount | $ 52,900 | $ 52,900 | 48,700 | ||||||
Debt Instrument, Interest Rate, Plus Stated Percentage | 1.75% | 1.75% | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.125% | ||||||||
Debt Instrument, Covenant Compliance | all | ||||||||
Senior Notes | $ 150,000 | $ 150,000 | |||||||
Senior Notes - Maturity Date | Aug. 14, 2029 | ||||||||
Debt Instrument, Basis Spread on Variable Rate LIBOR Plus | 1.125% | ||||||||
Debt Instrument, Basis Spread on Variable Rate Revolver | 0.125% | ||||||||
Letters of Credit, Maximum Borrowing Capacity | $ 150,000 | ||||||||
Base Rate | |||||||||
Line of Credit Facility | |||||||||
Line of Credit Facility, Interest Rate at Period End | 3.25% | 3.25% | |||||||
London Interbank Offered Rate (LIBOR) | |||||||||
Line of Credit Facility | |||||||||
Line of Credit Facility, Interest Rate at Period End | 0.101% | 0.101% | |||||||
Minimum | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.00% | ||||||||
Commitment fee for unused capacity | 0.09% | ||||||||
Debt Instrument, Basis Spread on Variable Rate, Minimum | 0.875% | ||||||||
Maximum | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.375% | ||||||||
Commitment fee for unused capacity | 0.20% | ||||||||
Debt Instrument, Basis Spread on Variable Rate, Maximum | 1.375% | ||||||||
2016 Senior Credit Facility | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Maturity Date | Nov. 4, 2023 | ||||||||
Senior Notes - Maturity Date | Nov. 4, 2024 | ||||||||
February 2016 Term Loan | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Feb. 19, 2016 | ||||||||
Term Loan, Maximum Borrowing Capacity | $ 200,000 | ||||||||
June 2017 Term Loan | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Jun. 15, 2017 | ||||||||
Term Loan, Maximum Borrowing Capacity | $ 100,000 | ||||||||
November 2020 Term Loan | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Nov. 4, 2020 | ||||||||
Term loan, Maximum Month End Outstanding Amount | $ 200,000 | $ 200,000 | 200,000 | ||||||
Term Loan, Maximum Borrowing Capacity | $ 200,000 | ||||||||
Bonds | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Oct. 30, 2020 | ||||||||
Senior Notes | 650,000 | 650,000 | 650,000 | ||||||
Notes Payable to Banks | |||||||||
Line of Credit Facility | |||||||||
Senior Notes | $ 150,000 | 150,000 | 150,000 | ||||||
March 2020 Term Loan [Member] | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Mar. 12, 2020 | ||||||||
Term Loan, Maximum Borrowing Capacity | $ 200,000 | ||||||||
April 2020 Term Loan [Member] | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Issuance Date | Apr. 22, 2020 | ||||||||
Term Loan, Maximum Borrowing Capacity | $ 350,000 | ||||||||
Debt Instrument, Maturity Date | Oct. 30, 2020 | ||||||||
2016 Senior Credit Facility | |||||||||
Line of Credit Facility | |||||||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 0 | $ 0 | |||||||
Number of Financial Covenants | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Covenant Description | two | ||||||||
Fixed Charge Coverage Ratio Minimum Requirement | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Covenant Description | 2.0 | ||||||||
Leverage Ratio Maximum Requirement | |||||||||
Line of Credit Facility | |||||||||
Debt Instrument, Covenant Description | 4.0 |
Interest Rate Swaps (Details)
Interest Rate Swaps (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Derivative [Line Items] | |||
Other Comprehensive Income (Loss), Net of Tax | $ 4,588 | $ (3,442) | $ (4,332) |
New Accounting Pronouncement or Change in Accounting Principle, Description of Prior-period Information Retrospectively Adjusted | — | — | 2,084,880 |
Employee Stock Option | |||
Derivative [Line Items] | |||
Forfeiture rate, minimum (in hundredths) | 7.00% | 7.00% | 7.30% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 1.50% | 1.50% | 1.40% |
Weighted average expected lives (in years) | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 6 months |
Expected price volatility, maximum (in hundredths) | 3030.00% | 3000.00% | 2760.00% |
Expected price volatility, minimum (in hundredths) | 2980.00% | 2670.00% | 2640.00% |
Risk-free interest rate, maximum (in hundredths) | 1.00% | 1.30% | 2.50% |
Risk-free interest rate, minimum (in hundredths) | 0.30% | 0.20% | 1.60% |
Interest Rate Swaps Schedule of
Interest Rate Swaps Schedule of Changes in AOCL Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Other Comprehensive Income (Loss), Net of Tax | $ 4,588 | $ (3,442) | $ (4,332) |
New Accounting Pronouncement or Change in Accounting Principle, Description of Prior-period Information Retrospectively Adjusted | — | — | 2,084,880 |
Leases, Term and Discount
Leases, Term and Discount | Dec. 25, 2021 | Dec. 26, 2020 |
Lease Term and Discount [Axis] | ||
Operating Lease, Weighted Average Discount Rate, Percent | 3.60% | 4.10% |
Finance Lease, Weighted Average Discount Rate, Percent | 4.80% | 4.90% |
Finance Lease, Weighted Average Remaining Lease Term | 10 years 6 months | 10 years 4 months 24 days |
Operating Lease, Weighted Average Remaining Lease Term | 10 years | 9 years 1 month 6 days |
Leases, Cost
Leases, Cost - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2021 | Dec. 26, 2020 | |
Lease Cost [Table] | ||
Lease, Cost [Line Items] | $ (487,212) | $ (466,002) |
Lease, Cost [Line Items] | 487,212 | 466,002 |
Variable Lease, Cost | 79,479 | 80,154 |
Operating Lease, Cost | 400,908 | 379,318 |
Finance Lease, Interest Expense | 1,740 | 1,765 |
Finance Lease, Right-of-Use Asset, Amortization | $ 5,085 | $ 4,765 |
Leases, Maturities Table
Leases, Maturities Table - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 25, 2021 | Dec. 26, 2020 | |
Leases [Abstract] | ||
Lessee, Operating Lease, Lease Not yet Commenced, Description | 239.2 million | |
Combined Lease Maturities [Axis] | ||
Future Minimum Payments Due, Next Twelve Months [Line Items] | $ 423,601 | |
Future Minimum Payments, Due in Two Years [Line Items] | 411,229 | |
Future Minimum Payments, Due in Three Years [Line Items] | 388,240 | |
Future Minimum Payments, Due in Four Years [Line Items] | 364,627 | |
Future Minimum Payments, Due in Five Years [Line Items] | 330,599 | |
Future Minimum Payments, Due Thereafter [Line Items] | 1,563,375 | |
Future Minimum Payments Due [Line Items] | 3,481,669 | |
Future Minimum Payments, Interest [Line Items] | (548,758) | |
Lease Liability [Line Items] | 2,932,912 | |
Finance Lease Maturities [Axis] | ||
Finance Lease, Liability, Current | 3,897 | $ 4,554 |
Finance Lease, Interest Expense Future Maturities [Line Items] | (9,475) | |
Finance Lease, Liability, Payment, Due | 46,220 | |
Finance Lease, Liability, to be Paid, after Year Five | 23,281 | |
Finance Lease, Liability, to be Paid, Year Five | 4,294 | |
Finance Lease, Liability, to be Paid, Year Four | 4,324 | |
Finance Lease, Liability, to be Paid, Year Three | 4,397 | |
Finance Lease, Liability, to be Paid, Year Two | 4,382 | |
Finance Lease, Liability, Payments, Due in Next Rolling Twelve Months | 5,542 | |
Lease Maturities [Axis] | ||
Operating Lease, Liability | 2,896,167 | |
Operating Lease, Expense | (539,283) | |
Finance Lease, Liability, Present Value | 36,745 | |
Operating Leases, Future Minimum Payments Due | 3,435,449 | |
After 2025 | 1,540,093 | |
2025 | 326,304 | |
2024 | 360,302 | |
2023 | 383,843 | |
2022 | 406,847 | |
2021 | $ 418,059 |
Leases (Details)
Leases (Details) | 12 Months Ended |
Dec. 25, 2021 | |
Lease Term [Line Items] | |
Store leases optional renewal periods, maximum | 4 years |
Store leases optional renewal periods, minimum | 2 years |
Store leases optional renewal periods | 5 years |
Maximum | |
Lease Term [Line Items] | |
Lessee, Operating Lease, Term of Contract | 15 years |
Minimum | |
Lease Term [Line Items] | |
Lessee, Operating Lease, Term of Contract | 10 years |
Capital Stock (Details)
Capital Stock (Details) - shares shares in Thousands | Dec. 25, 2021 | Dec. 26, 2020 |
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 | Jan. 26, 2022 | Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 |
Dividends | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.92 | $ 2.08 | $ 1.50 | $ 1.36 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | Jan. 26, 2022 | |
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | ||||
Remaining authorization under the share repurchase program | $ 345,000 | |||
Repurchased shares under the share repurchase program (in shares) | 4,364 | 3,439 | 5,384 | |
Treasury Stock Acquired, Average Cost Per Share | $ 183.07 | $ 99.72 | $ 99.05 | |
Stock Repurchased During Period, Value | $ 798,893 | $ 342,957 | $ 533,319 | |
Payments for Repurchase of Common Stock | (798,893) | $ (342,957) | $ (533,319) | |
Total amount of stock authorized under the repurchase program | 4,500,000 | $ 6,500,000 | ||
Total amount of stock authorized under the repurchase program | $ 4,500,000 | 6,500,000 | ||
Repurchase Program Increase [Member] | ||||
Treasury Stock Transactions, Excluding Value of Shares Reissued [Abstract] | ||||
Total amount of stock authorized under the repurchase program | 2,000,000 | |||
Total amount of stock authorized under the repurchase program | $ 2,000,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Basic net income per share | |||
Net income, basic | $ 997,114 | $ 748,958 | $ 562,354 |
Shares, basic | 114,794 | 116,370 | 119,727 |
Per share amount, basic (in dollars per share) | $ 8.69 | $ 6.44 | $ 4.70 |
Dilutive stock options and restricted stock units outstanding, income | $ 0 | $ 0 | $ 0 |
Dilutive stock options and restricted stock units outstanding, shares | 1,030 | 1,066 | 1,016 |
Dilutive stock options and restricted stock units outstanding, per share (in dollars per share) | $ (0.08) | $ (0.06) | $ (0.04) |
Diluted net income per share | |||
Shares, diluted | 115,824 | 117,436 | 120,743 |
Diluted net income per share (in dollars per share) | $ 8.61 | $ 6.38 | $ 4.66 |
Anitdilutive securities excluded from computation of earnings per share | 100 | 100 | 400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | |||
Tax Credit Carryforward, Amount | $ 6,600,000 | $ 8,600,000 | |
Deferred Tax Assets, Valuation Allowance | 0 | 0 | |
Current tax expense | |||
Federal | 221,152,000 | 211,228,000 | $ 128,490,000 |
State | 34,238,000 | 38,511,000 | 25,091,000 |
Total current | 255,390,000 | 249,739,000 | 153,581,000 |
Deferred tax expense (benefit) | |||
Deferred Federal Income Tax Expense (Benefit) | 24,303,000 | (21,997,000) | 11,770,000 |
Deferred State and Local Income Tax Expense (Benefit) | 3,281,000 | (8,553,000) | (4,328,000) |
Deferred income tax expense (benefit), net of tax expense of interest rate swap | 27,584,000 | (30,550,000) | 7,442,000 |
Total income tax expense | 282,974,000 | 219,189,000 | 161,023,000 |
Tax assets | |||
Inventory valuation | 23,365,000 | 20,539,000 | |
Accrued employee benefits costs | 36,810,000 | 44,625,000 | |
Nondeductible reserves | 7,099,000 | 5,967,000 | |
Deferred Tax Assets Long Term, Tax Effect of Finance Lease Liabilities | 8,958,000 | 8,595,000 | |
Deferred Tax Assets Long Term, Tax Effect of Operating Lease Liabilities | 740,478,000 | 645,719,000 | |
Deferred compensation | 12,201,000 | 12,289,000 | |
Workers' compensation insurance | 14,271,000 | 11,804,000 | |
General liability insurance | 9,402,000 | 7,346,000 | |
Income tax credits | 7,986,000 | 8,744,000 | |
Deferred Tax Assets Long Term, Tax Effect of Amortization | 7,803,000 | 7,269,000 | |
Other | 12,799,000 | 10,746,000 | |
Total non current deferred tax asset | 881,172,000 | 783,643,000 | |
Tax liabilities | |||
Deferred Tax Liabilities, Finance Lease Assets | (7,797,000) | (7,584,000) | |
Deferred Tax Liabilities, Operating Lease Right-of-Use Assets | (702,197,000) | (612,658,000) | |
Depreciation | (161,137,000) | (124,280,000) | |
Other | (7,604,000) | (7,535,000) | |
Net deferred tax asset | 2,437,000 | 31,586,000 | |
Provision for income tax reconciliation to amounts computed at the federal statutory rate | |||
Tax provision at statutory rate | 268,819,000 | 203,311,000 | 151,909,000 |
State income taxes, net of federal tax benefits | 36,116,000 | 27,642,000 | 19,722,000 |
Tax credits, net of federal tax benefits | (13,157,000) | (8,828,000) | (7,768,000) |
Share-based compensation programs | (13,368,000) | (9,303,000) | (4,484,000) |
Other | 4,564,000 | (6,367,000) | (1,644,000) |
Total income tax expense | 282,974,000 | 219,189,000 | 161,023,000 |
Unrecognized tax benefits that would Impact effective tax rate | 3,200,000 | ||
Reconciliation of gross unrecognized tax benefits | |||
Balance at beginning of period | 3,236,000 | 2,760,000 | 2,451,000 |
Additions based on tax positions related to the current year | 927,000 | 816,000 | 650,000 |
Additions for tax positions of prior years | 51,000 | 32,000 | 59,000 |
Reductions for tax positions of prior years | (465,000) | (372,000) | (400,000) |
Balance at end of year | 3,749,000 | 3,236,000 | $ 2,760,000 |
Deferred Tax Liabilities, Net, Noncurrent | 878,735,000 | $ 752,057,000 | |
Social Security Tax Deferral | $ 24,500,000 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Schedule Defined Contribution Benefit Plan | |||
Percentage match by company applicable to first 3 percent of employee's contribution | 100.00% | ||
Maximum percentage of employee's eligible compensation eligible for 100% match (in hundredths) | 3.00% | ||
Percentage match by company applicable to next 3 percent of employee's contribution | 50.00% | ||
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 | $ 15.3 | $ 12.9 | $ 9.8 |
Retirement Benefit Plans Deferr
Retirement Benefit Plans Deferred Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 | |
Schedule of Deferred Compensation | |||
Company's maximum match under employee deferred compensation program | $ 4,500 | ||
Deferred compensation arrangement with individual, employer contribution | $ 300,000 | $ 600,000 | $ 700,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 25, 2021 | Dec. 26, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase Obligation, Extending Greater Than Twelve Months | $ 0 | |
Letters of Credit Outstanding, Amount | 52.9 | $ 48.7 |
Purchase Obligation | $ 107.8 | |
Lessee, Operating Lease, Lease Not yet Commenced, Description | 239.2 million | |
Navarre, OH DC [Member] | ||
Purchase Obligation | $ 56.9 |
Segment Reporting (Details)
Segment Reporting (Details) - segment | Dec. 25, 2021 | Dec. 25, 2021 | Dec. 26, 2020 | Dec. 28, 2019 |
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% | 47.00% | 47.00% | |
Hardware, Tools and Truck | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 21.00% | 21.00% | 21.00% | |
Seasonal, Gift and Toy Products | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 21.00% | 21.00% | 20.00% | |
Clothing and Footwear | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 8.00% | 7.00% | 8.00% | |
Agriculture | ||||
Revenue from External Customer | ||||
Average percent of sales (in hundredths) | 3.00% | 4.00% | 4.00% |