Cover
Cover - shares | 3 Months Ended | |
Mar. 26, 2022 | Apr. 23, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | true | |
Document Period End Date | Mar. 26, 2022 | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | false | |
Entity File Number | 000-23314 | |
Entity Registrant Name | TRACTOR SUPPLY CO /DE/ | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3139732 | |
Entity Address, Street Address | 5401 Virginia Way | |
Entity Address, City | Brentwood | |
Entity Address, State | TN | |
Entity Address, Postal Zip Code | 37027 | |
City Area Code | 615 | |
Local Phone Number | 440-4000 | |
Title of 12(b) Security | Common Stock, $0.008 par value | |
Trading Symbol | TSCO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000916365 | |
Entity Common Stock, Shares Outstanding | 111,881,628 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 |
Current assets: | |||
Cash and cash equivalents | $ 405,432 | $ 878,030 | $ 1,149,930 |
Inventories | 2,568,179 | 2,191,192 | 2,084,677 |
Prepaid expenses and other current assets | 185,634 | 164,118 | 146,227 |
Income taxes receivable | 9,030 | 17,100 | 0 |
Total current assets | 3,168,275 | 3,250,440 | 3,380,834 |
Property and equipment, net | 1,655,750 | 1,617,806 | 1,287,004 |
Operating lease right-of-use assets | 2,744,095 | 2,785,858 | 2,589,418 |
Goodwill and other intangible assets | 55,520 | 55,520 | 55,520 |
Deferred Tax Assets, Deferred Income | 0 | 2,437 | 11,428 |
Other assets | 63,168 | 55,406 | 35,475 |
Total assets | 7,686,808 | 7,767,467 | 7,359,679 |
Current liabilities: | |||
Accounts payable | 1,341,645 | 1,155,630 | 1,181,924 |
Accrued employee compensation | 49,124 | 109,618 | 68,102 |
Other accrued expenses | 445,079 | 474,412 | 377,777 |
Current portion of long-term debt | 0 | 0 | |
Current portion of finance lease liabilities | 4,042 | 3,897 | 4,674 |
Current portion of operating lease liabilities | 359,774 | 321,285 | 303,222 |
Income taxes payable | 0 | 0 | 40,226 |
Total current liabilities | 2,199,664 | 2,064,842 | 1,975,925 |
Long-term debt | 986,896 | 986,382 | 984,838 |
Finance lease liabilities, less current portion | 36,649 | 32,848 | 31,890 |
Operating lease liabilities, less current portion | 2,529,605 | 2,574,882 | 2,399,246 |
Deferred Income Tax Liabilities, Net | 37,487 | 0 | 0 |
Other long-term liabilities | 106,485 | 105,848 | 115,481 |
Total liabilities | 5,896,786 | 5,764,802 | 5,507,380 |
Stockholders’ equity: | |||
Preferred stock | 0 | 0 | 0 |
Common stock | 1,413 | 1,411 | 1,409 |
Additional paid-in capital | 1,204,294 | 1,210,512 | 1,154,451 |
Treasury stock | (4,452,026) | (4,155,846) | (3,610,362) |
Accumulated other comprehensive income/(loss) | 7,338 | 1,345 | (1,118) |
Retained earnings | 5,029,003 | 4,945,243 | 4,307,919 |
Total stockholders’ equity | 1,790,022 | 2,002,665 | 1,852,299 |
Total liabilities and stockholders’ equity | $ 7,686,808 | $ 7,767,467 | $ 7,359,679 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 |
Statement of Financial Position [Abstract] | |||
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 40,000 | 40,000 | 40,000 |
Preferred Stock, Shares Issued | 0 | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.008 | $ 0.008 | $ 0.008 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 400,000,000 |
Common Stock, Shares, Issued | 176,679,000 | 176,371,000 | 176,069,000 |
Common Stock, Shares, Outstanding | 112,075,000 | 113,125,000 | 115,587,000 |
Treasury Stock, Shares | 64,604,000 | 63,246,000 | 60,482,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 3,024,132 | $ 2,792,336 |
Cost of merchandise sold | 1,967,623 | 1,808,556 |
Gross profit | 1,056,509 | 983,780 |
Selling, general and administrative expenses | 734,577 | 693,190 |
Depreciation and amortization | 77,646 | 60,054 |
Operating income | 244,286 | 230,536 |
Interest expense, net | 7,069 | 7,221 |
Income before income taxes | 237,217 | 223,315 |
Income tax expense | 49,990 | 41,961 |
Net income | $ 187,227 | $ 181,354 |
Net income per share – basic | $ 1.66 | $ 1.56 |
Net income per share – diluted | $ 1.65 | $ 1.55 |
Weighted average shares outstanding: | ||
Basic | 112,531 | 116,153 |
Diluted | 113,504 | 117,227 |
Dividends declared per common share outstanding | $ 0.92 | $ 0.52 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 187,227 | $ 181,354 |
Change in fair value of interest rate swaps, net of taxes | 5,993 | 2,125 |
Total other comprehensive income | 5,993 | 2,125 |
Total comprehensive income | $ 193,220 | $ 183,479 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accum. Other Comp. Income | Retained Earnings |
Beginning balance, shares outstanding (in shares) at Dec. 26, 2020 | 116,246 | |||||
Beginning balance, Stockholders' equity at Dec. 26, 2020 | $ 1,923,840 | $ 1,401 | $ 1,095,500 | $ (3,356,953) | $ (3,243) | $ 4,187,135 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issuance under stock award plans & ESPP (in shares) | 941 | |||||
Common stock issuance under stock award plans & ESPP | 58,708 | $ 8 | 58,700 | |||
Share-based compensation | 12,318 | 12,318 | ||||
Repurchase of shares to satisfy tax obligations | (12,067) | (12,067) | ||||
Repurchase of common stock, shares (in shares) | (1,600) | |||||
Repurchase of common stock | (253,409) | (253,409) | ||||
Dividends paid | (60,570) | (60,570) | ||||
Change in fair value of interest rate swaps, net of taxes | 2,125 | 2,125 | ||||
Net income | 181,354 | 181,354 | ||||
Ending balance, shares outstanding (in shares) at Mar. 27, 2021 | 115,587 | |||||
Ending balance, Stockholders' equity at Mar. 27, 2021 | 1,852,299 | $ 1,409 | 1,154,451 | (3,610,362) | (1,118) | 4,307,919 |
Beginning balance, shares outstanding (in shares) at Dec. 25, 2021 | 113,125 | |||||
Beginning balance, Stockholders' equity at Dec. 25, 2021 | 2,002,665 | $ 1,411 | 1,210,512 | (4,155,846) | 1,345 | 4,945,243 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issuance under stock award plans & ESPP (in shares) | 308 | |||||
Common stock issuance under stock award plans & ESPP | 7,910 | $ 2 | 7,908 | |||
Share-based compensation | 12,316 | 12,316 | ||||
Repurchase of shares to satisfy tax obligations | (26,442) | (26,442) | ||||
Repurchase of common stock, shares (in shares) | (1,358) | |||||
Repurchase of common stock | (296,180) | (296,180) | ||||
Dividends paid | (103,467) | (103,467) | ||||
Change in fair value of interest rate swaps, net of taxes | 5,993 | 5,993 | ||||
Net income | 187,227 | 187,227 | ||||
Ending balance, shares outstanding (in shares) at Mar. 26, 2022 | 112,075 | |||||
Ending balance, Stockholders' equity at Mar. 26, 2022 | $ 1,790,022 | $ 1,413 | $ 1,204,294 | $ (4,452,026) | $ 7,338 | $ 5,029,003 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | Sep. 25, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 187,227 | $ 181,354 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 77,646 | 60,054 | |
Loss on disposition of property and equipment | 326 | 108 | |
Share-based compensation expense | 12,316 | 12,318 | |
Deferred income taxes | 39,924 | 20,158 | |
Change in assets and liabilities: | |||
Inventories | (376,987) | (301,407) | |
Prepaid expenses and other current assets | (21,516) | (12,568) | |
Accounts payable | 186,015 | 205,828 | |
Accrued employee compensation | (60,494) | (51,599) | |
Other accrued expenses | (28,463) | 55,305 | |
Income taxes | 8,070 | 20,288 | |
Other | 35,002 | (12,722) | |
Net cash provided by operating activities | 59,066 | 177,117 | |
Cash flows from investing activities: | |||
Capital expenditures | (112,387) | (100,741) | |
Proceeds from sale of property and equipment | 99 | 222 | |
Net cash used in investing activities | (112,288) | (100,519) | |
Cash flows from financing activities: | |||
Principal payments under finance lease liabilities | (1,197) | (1,086) | |
Repurchase of shares to satisfy tax obligations | (26,442) | (12,067) | |
Repurchase of common stock | (296,180) | (253,409) | $ (296,180) |
Net proceeds from issuance of common stock | 7,910 | 58,708 | |
Cash dividends paid to stockholders | (103,467) | (60,570) | |
Net cash used in financing activities | (419,376) | (268,424) | |
Net decrease in cash and cash equivalents | (472,598) | (191,826) | |
Cash and cash equivalents at beginning of period | 878,030 | 1,341,756 | $ 1,341,756 |
Cash and cash equivalents at end of period | 405,432 | 1,149,930 | |
Cash paid during the period for: | |||
Interest | 4,404 | 4,216 | |
Income taxes | 3,897 | 2,071 | |
Supplemental disclosures of non-cash activities: | |||
Non-cash accruals for property and equipment | 23,538 | 10,301 | |
Increase of operating lease assets and liabilities from new or modified leases | 37,694 | 238,494 | |
Increase of finance lease assets and liabilities from new or modified leases | $ 5,143 | $ 0 |
General
General | 3 Months Ended |
Mar. 26, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General: Nature of Business Founded in 1938, Tractor Supply Company (the “Company,” "Tractor Supply," “we,” “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 March 26, 2022, the Company operated a total of 2,181 retail stores in 49 states (2,003 Tractor Supply retail stores and 178 Petsense retail stores) and also offered an expanded assortment of products through the Tractor Supply 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 acquisition is conditioned on the receipt of regulatory clearance and satisfactory completion of customary closing conditions. The Company continues to work collaboratively with the Federal Trade Commission on the transaction. Basis of Presentation The accompanying interim unaudited Condensed 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”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 25, 2021. The results of operations for our interim periods are not necessarily indicative of results for the full fiscal year. COVID-19 Pandemic The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which may negatively affect our business operations. As a result, if the pandemic persists or worsens, our accounting estimates and assumptions could be impacted in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant. New Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 (IBORs), 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 through December 31, 2022. The Company does not expect the adoption of this guidance to have a material impact on its Condensed Consolidated Financial Statements and related disclosures. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 26, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and interest rate swaps. Due to their short-term nature, the carrying values of cash and cash equivalents, short-term receivables, and trade payables approximate current fair value at each balance sheet date. As described in further detail in Note 5 to the Condensed Consolidated Financial Statements, the Company had $1.00 billion in borrowings under its debt facilities at each of March 26, 2022, December 25, 2021, and March 27, 2021. Based on market interest rates (Level 2 inputs), the carrying value of borrowings in our debt facilities approximates fair value for each period reported. The fair value of the Company’s interest rate swaps is determined based on the present value of expected future cash flows using forward rate curves (a Level 2 input). The fair value of the interest rate swaps, excluding accrued interest, was a net asset of $9.9 million and $1.8 million at March 26, 2022 and December 25, 2021, respectively, and a net liability of $1.5 million at March 27, 2021. In accordance with hedge accounting, the gains and losses on interest rate swaps that are designated and qualify as cash flow hedges are recorded as a component of Other Comprehensive Income, net of related income taxes, and reclassified into earnings in the same income statement line and period during which the hedged transactions affect earnings. |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 26, 2022 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share Based Compensation | Share-Based Compensation: Share-based compensation includes stock options, restricted stock units, performance-based restricted share units, and transactions under our Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is recognized based on grant date fair value of all stock options, restricted stock units, and performance-based restricted share units plus a 15% discount on shares purchased by employees as a part of the ESPP. The discount under the ESPP represents the difference between the purchase date market value and the employee’s purchase price. There were no significant modifications to the Company’s share-based compensation plans during the fiscal three months ended March 26, 2022. Share-based compensation expense was $12.3 million for each of the first quarter of fiscal 2022 and fiscal 2021. Stock Options The following table summarizes information concerning stock option grants during the first three months of fiscal 2022: Fiscal Three Months Ended March 26, 2022 Stock options granted 135,268 Weighted average exercise price $ 221.95 Weighted average grant date fair value per option $ 49.92 As of March 26, 2022, total unrecognized compensation expense related to non-vested stock options was approximately $13.4 million with a remaining weighted average expense recognition period of 2.3 years. Restricted Stock Units and Performance-Based Restricted Share Units The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first three months of fiscal 2022: Fiscal Three Months Ended March 26, 2022 Restricted stock units granted 161,524 Weighted average grant date fair value per share - Restricted stock units $ 213.60 Performance-based restricted share units granted (a) 50,620 Weighted average grant date fair value per share - Performance-based restricted share units $ 225.15 (a) Assumes 100% target level achievement of the relative performance targets. In the first three months of fiscal 2022, the Company granted performance-based restricted share unit awards that are 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 and also include a relative total shareholder return modifier. The number of performance-based restricted share units presented in the foregoing table represent the shares that can be achieved at the performance metric target value. The actual number of shares that will be issued under the performance-based restricted share unit awards, which may be higher or lower than the target, will be determined by the level of achievement of the performance goals and the relative total shareholder return modifier. If the performance targets are achieved, the units will be issued based on the achievement level, inclusive of the relative total shareholder return modifier, and the grant date fair value and will cliff vest in full on the third anniversary of the date of the grant, subject to continued employment. As of March 26, 2022, total unrecognized compensation expense related to non-vested restricted stock units and non-vested performance-based restricted share units was approximately $88.1 million with a remaining weighted average expense recognition period of 2.3 years. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share: The Company presents both basic and diluted net income per share on the Condensed 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 are considered satisfied as of the end of the reporting period. Net income per share is calculated as follows (in thousands, except per share amounts): Fiscal Three Months Ended March 26, 2022 March 27, 2021 Income Shares Per Share Income Shares Per Share Basic net income per share: $ 187,227 112,531 $ 1.66 $ 181,354 116,153 $ 1.56 Dilutive effect of share-based awards — 973 (0.01) — 1,074 (0.01) Diluted net income per share: $ 187,227 113,504 $ 1.65 $ 181,354 117,227 $ 1.55 Anti-dilutive stock awards excluded from the above calculations totaled less than 0.1 million and approximately 0.2 million shares for the fiscal three months ended March 26, 2022 and March 27, 2021, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt: The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): March 26, December 25, March 27, 1.75% Senior Notes due 2030 $ 650.0 $ 650.0 $ 650.0 3.70% Senior Notes due 2029 (a) 150.0 150.0 150.0 Senior Credit Facility: November 2020 Term Loan 200.0 200.0 200.0 Revolving credit loans — — — Total outstanding borrowings 1,000.0 1,000.0 1,000.0 Less: unamortized debt discounts and issuance costs (13.1) (13.6) (15.2) Total debt 986.9 986.4 984.8 Less: current portion of long-term debt — — — Long-term debt $ 986.9 $ 986.4 $ 984.8 Outstanding letters of credit $ 52.8 $ 52.9 $ 60.3 (a) Also referred to herein as the "Note Purchase Agreement" Borrowings under both the Company's $500 million revolving credit facility (the "Revolver") and the Company's $200 million term loan (the "November 2020 Term Loan") each under our senior credit facility (the "Senior Credit Facility") bear interest either at the bank’s base rate (3.250% at March 26, 2022) plus an additional amount ranging from 0.000% to 0.375% (0.125% at March 26, 2022) or at the London Inter-Bank Offer Rate (“LIBOR”) (0.445% at March 26, 2022) plus an additional amount ranging from 0.875% to 1.375% per annum (1.125% at March 26, 2022), 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 March 26, 2022), adjusted based on the Company's public credit ratings. The Company has entered into an interest rate swap agreement in order to hedge our exposure to variable rate interest payments associated with the Senior Credit Facility. The interest rate swap agreement will mature on March 18, 2025 and the notional amount of the agreement is fixed at $200 million. 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 March 26, 2022, 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. |
Capital Stock and Dividends
Capital Stock and Dividends | 3 Months Ended |
Mar. 26, 2022 | |
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 the first three months of fiscal 2022 and fiscal 2021, the Company's Board of Directors declared the following cash dividends: Date Declared Dividend Amount Record Date Date Paid January 26, 2022 $ 0.92 February 21, 2022 March 8, 2022 January 27, 2021 $ 0.52 February 22, 2021 March 9, 2021 |
Treasury Stock
Treasury Stock | 3 Months Ended |
Mar. 26, 2022 | |
Equity [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. 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, exclusive of any fees, commissions, or other expenses related to such repurchases. 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 March 26, 2022, the Company had remaining authorization under the share repurchase program of $2.0 billion, 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 during the fiscal three months ended March 26, 2022 and March 27, 2021, respectively (in thousands, except per share amounts): Fiscal Three Months Ended March 26, March 27, Total number of shares repurchased 1,358 1,600 Average price paid per share $ 218.07 $ 158.35 Total cash paid for share repurchases $ 296,180 $ 253,409 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes:The Company’s effective income tax rate was 21.1% in the first quarter of fiscal 2022 compared to 18.8% in the first quarter of fiscal 2021. The increase in the effective income tax rate in the first three months of fiscal 2022 compared to the first three months of fiscal 2021 was primarily related to a decrease in a discrete incremental tax benefit associated with share-based compensation. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 26, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies: Construction and Real Estate Commitments The Company is building new distribution centers in Navarre, Ohio and Maumelle, Arkansas, for which, as of March 26, 2022, the Company had contractual commitments of approximately $32 million and $0, respectively. Letters of Credit At March 26, 2022, there were $52.8 million in outstanding letter 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 alleged 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 disputed 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. The case was dismissed during the first quarter of 2022 with no material impact to our Condensed Consolidated Financial Statements. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 26, 2022 | |
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 the fiscal three months ended March 26, 2022 and March 27, 2021: Fiscal Three Months Ended Product Category: March 26, March 27, Livestock and Pet 53 % 51 % Hardware, Tools and Truck 19 21 Seasonal, Gift and Toy Products 17 18 Clothing and Footwear 8 7 Agriculture 3 3 Total 100 % 100 % |
Share Based Compensation (Table
Share Based Compensation (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock Options | The following table summarizes information concerning stock option grants during the first three months of fiscal 2022: Fiscal Three Months Ended March 26, 2022 Stock options granted 135,268 Weighted average exercise price $ 221.95 Weighted average grant date fair value per option $ 49.92 |
Restricted Stock Units and Performance-Based Restricted Share Units | The following table summarizes information concerning restricted stock unit and performance-based restricted share unit grants during the first three months of fiscal 2022: Fiscal Three Months Ended March 26, 2022 Restricted stock units granted 161,524 Weighted average grant date fair value per share - Restricted stock units $ 213.60 Performance-based restricted share units granted (a) 50,620 Weighted average grant date fair value per share - Performance-based restricted share units $ 225.15 (a) Assumes 100% target level achievement of the relative performance targets. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net income per share is calculated as follows (in thousands, except per share amounts): Fiscal Three Months Ended March 26, 2022 March 27, 2021 Income Shares Per Share Income Shares Per Share Basic net income per share: $ 187,227 112,531 $ 1.66 $ 181,354 116,153 $ 1.56 Dilutive effect of share-based awards — 973 (0.01) — 1,074 (0.01) Diluted net income per share: $ 187,227 113,504 $ 1.65 $ 181,354 117,227 $ 1.55 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes the Company’s outstanding debt as of the dates indicated (in millions): March 26, December 25, March 27, 1.75% Senior Notes due 2030 $ 650.0 $ 650.0 $ 650.0 3.70% Senior Notes due 2029 (a) 150.0 150.0 150.0 Senior Credit Facility: November 2020 Term Loan 200.0 200.0 200.0 Revolving credit loans — — — Total outstanding borrowings 1,000.0 1,000.0 1,000.0 Less: unamortized debt discounts and issuance costs (13.1) (13.6) (15.2) Total debt 986.9 986.4 984.8 Less: current portion of long-term debt — — — Long-term debt $ 986.9 $ 986.4 $ 984.8 Outstanding letters of credit $ 52.8 $ 52.9 $ 60.3 |
Capital Stock and Dividends (Ta
Capital Stock and Dividends (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
Schedule of Dividends Payable | During the first three months of fiscal 2022 and fiscal 2021, the Company's Board of Directors declared the following cash dividends: Date Declared Dividend Amount Record Date Date Paid January 26, 2022 $ 0.92 February 21, 2022 March 8, 2022 January 27, 2021 $ 0.52 February 22, 2021 March 9, 2021 |
Treasury Stock Treasury Stock (
Treasury Stock Treasury Stock (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Equity [Abstract] | |
Class of Treasury Stock, Shares Repurchased | The following table provides the number of shares repurchased, average price paid per share, and total amount paid for share repurchases during the fiscal three months ended March 26, 2022 and March 27, 2021, respectively (in thousands, except per share amounts): Fiscal Three Months Ended March 26, March 27, Total number of shares repurchased 1,358 1,600 Average price paid per share $ 218.07 $ 158.35 Total cash paid for share repurchases $ 296,180 $ 253,409 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 26, 2022 | |
Segment Reporting [Abstract] | |
Major Product Category | The following table indicates the percentage of net sales represented by each major product category during the fiscal three months ended March 26, 2022 and March 27, 2021: Fiscal Three Months Ended Product Category: March 26, March 27, Livestock and Pet 53 % 51 % Hardware, Tools and Truck 19 21 Seasonal, Gift and Toy Products 17 18 Clothing and Footwear 8 7 Agriculture 3 3 Total 100 % 100 % |
General (Details)
General (Details) $ in Millions | Feb. 17, 2021USD ($)statestore | Mar. 26, 2022storestate |
Orscheln Farm and Home, LLC | ||
Nature of business [Abstract] | ||
Number of rural lifestyle retail stores operated by the company | 167 | |
Number of states in which rural lifestyle retail stores are operated by the company | state | 11 | |
Business Combination, Consideration Transferred | $ | $ 320 | |
Parent Company [Member] | ||
Nature of business [Abstract] | ||
Number of rural lifestyle retail stores operated by the company | 2,181 | |
Number of states in which rural lifestyle retail stores are operated by the company | state | 49 | |
TSCO stores [Member] | ||
Nature of business [Abstract] | ||
Number of rural lifestyle retail stores operated by the company | 2,003 | |
Petsense stores [Member] | ||
Nature of business [Abstract] | ||
Number of rural lifestyle retail stores operated by the company | 178 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unsecured Debt | $ 1,000 | $ 1,000 | $ 1,000 |
Derivative, Fair Value, Net | $ 9.9 | $ 1.8 | $ (1.5) |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee stock purchase program discount percentage | 15.00% | |
Share-based compensation plan modifications | no | |
Share-based Payment Arrangement, Noncash Expense | $ 12,316 | $ 12,318 |
Employee Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted | 135,268 | |
Weighted average exercise price | $ 221.95 | |
Weighted average fair value per option | $ 49.92 | |
Total unrecognized compensation expense | $ 13,400 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 3 months 18 days | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 161,524 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted | 50,620 | |
Restricted Stock Units and Performance-Based Restricted Share Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation expense | $ 88,100 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 3 months 18 days | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value per share | $ 213.60 | |
Performance-Based Restricted Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average fair value per share | $ 225.15 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive stock options and restricted stock units outstanding, income | $ 0 | $ 0 |
Dilutive stock options and restricted stock units outstanding, per share (in shares) | 973 | 1,074 |
Dilutive stock options and restricted stock units outstanding , per share | $ 0.01 | $ 0.01 |
Net income | $ 187,227 | $ 181,354 |
Antidilutive securities excluded from computation of earnings per share, amount | 100 | 200 |
Earnings Per Share, Basic [Abstract] | ||
Net income | $ 187,227 | $ 181,354 |
Weighted average number of shares outstanding, basic | 112,531 | 116,153 |
Net income per share – basic | $ 1.66 | $ 1.56 |
Earnings Per Share, Diluted [Abstract] | ||
Dilutive stock options and restricted stock units outstanding, income | $ 0 | $ 0 |
Dilutive stock options and restricted stock units outstanding, per share (in shares) | 973 | 1,074 |
Dilutive stock options and restricted stock units outstanding, per share (in dollars per share) | $ (0.01) | $ (0.01) |
Net income | $ 187,227 | $ 181,354 |
Weighted average number of shares outstanding, diluted | 113,504 | 117,227 |
Net income per share, diluted (in dollars per share) | $ 1.65 | $ 1.55 |
Antidilutive securities excluded from computation of earnings per share, amount | 100 | 200 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Jun. 26, 2021 | Dec. 25, 2021 | |
Debt Instrument [Line Items] | ||||
Unsecured Debt | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |
Unamortized Debt Issuance Costs | (13,100) | (15,200) | (13,600) | |
Unsecured debt, net of debt issuance costs | 986,900 | 984,800 | 986,400 | |
Unsecured Debt, Current | 0 | 0 | ||
Letters of Credit Outstanding, Amount | 52,800 | 60,300 | 52,900 | |
Long-term debt | $ 986,896 | $ 984,838 | 986,382 | |
Effective Income Tax Rate Reconciliation, Percent | 21.10% | 18.80% | ||
2016 Senior Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Month-end Outstanding Amount | $ 0 | $ 0 | $ 0 | |
Bonds | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 650,000 | 650,000 | 650,000 | |
Notes Payable to Banks | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 150,000 | 150,000 | 150,000 | |
November 2020 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Notional Amount, Current | $ 200,000 | $ 200,000 | $ 200,000 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Nov. 04, 2020 | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 | Feb. 19, 2016 |
Debt Instrument [Line Items] | |||||
Senior credit facility, maximum borrowing capacity | $ 500 | ||||
Debt instrument, basis spread on variable rate | 0.125% | ||||
Debt Instrument, Basis Spread on Variable Rate, Minimum | 0.875% | ||||
Debt Instrument, Basis Spread on Variable Rate LIBOR Plus, Maximum | 1.375% | ||||
Debt Instrument, Basis Spread on Variable Rate LIBOR Plus | 1.125% | ||||
Debt Instrument, Basis Spread on Variable Rate Revolver | 0.125% | ||||
Amount of incremental credit facility which will result in modification of debt covenants | 100 million | ||||
Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.00% | ||||
Commitment fee for unused capacity | 0.09% | ||||
Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.375% | ||||
Commitment fee for unused capacity | 0.20% | ||||
Base Rate | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Interest Rate at Period End | 3.25% | ||||
London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Interest Rate at Period End | 0.445% | ||||
Number of Financial Covenants [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Covenant Description | two | ||||
Fixed Charge Coverage Ratio Minimum Requirement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Covenant Description | 2.0 | ||||
Leverage Ratio Maximum Requirement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Covenant Description | 4.0 | ||||
Bonds | |||||
Debt Instrument [Line Items] | |||||
Senior Notes | $ 650 | $ 650 | $ 650 | ||
November 2020 Term Loan | |||||
Debt Instrument [Line Items] | |||||
Term Loan, Maximum Borrowing Capacity | $ 200 |
Interest Rate Swaps Schedule of
Interest Rate Swaps Schedule of Changes in AOCI Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Derivatives used in Net Investment Hedge, Net of Tax [Roll Forward] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 1,345 | |
Other Comprehensive Income (Loss), Net of Tax | 5,993 | $ 2,125 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 7,338 | $ (1,118) |
Capital Stock - Narrative (Deta
Capital Stock - Narrative (Details) - $ / shares | Jan. 26, 2022 | Jan. 27, 2021 | Mar. 26, 2022 | Mar. 27, 2021 | Dec. 25, 2021 |
Dividends Payable [Line Items] | |||||
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 400,000,000 | ||
Preferred Stock, Shares Authorized | 40,000 | 40,000 | 40,000 | ||
Dividends declared per common share outstanding | $ 0.92 | $ 0.52 | $ 0.92 | $ 0.52 |
Capital Stock and Dividends (De
Capital Stock and Dividends (Details) - $ / shares | Jan. 26, 2022 | Jan. 27, 2021 | Mar. 26, 2022 | Mar. 27, 2021 |
Equity [Abstract] | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.92 | $ 0.52 | $ 0.92 | $ 0.52 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 26, 2022 | Mar. 27, 2021 | Sep. 25, 2021 | Jan. 26, 2022 | |
Equity [Abstract] | ||||
Board-approved share repurchase program of common stock | $ 6,500,000 | |||
Remaining authorization under the share repurchase program | $ 2,000,000 | |||
Total number of shares repurchased | 1,358 | 1,600 | ||
Average price paid per share | $ 218.07 | $ 158.35 | ||
Total cash paid for share repurchases | $ 296,180 | $ 253,409 | $ 296,180 | |
Stock Repurchase Program, Authorized Amount | $ 6,500,000 | |||
Repurchase Program Increase [Member] | ||||
Equity [Abstract] | ||||
Board-approved share repurchase program of common stock | $ 2,000,000 | |||
Stock Repurchase Program, Authorized Amount | $ 2,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 21.10% | 18.80% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 26, 2022 | Dec. 25, 2021 | Mar. 27, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Letters of Credit Outstanding, Amount | $ 52.8 | $ 52.9 | $ 60.3 |
Navarre, OH DC | |||
Contractual Obligation | 32 | ||
Maumelle, AR DC [Member] | |||
Contractual Obligation | $ 0 |
Segment Reporting (Details)
Segment Reporting (Details) | 3 Months Ended | |
Mar. 26, 2022 | Mar. 27, 2021 | |
Livestock and Pet | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 53.00% | 51.00% |
Hardware, Tools and Truck [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 19.00% | 21.00% |
Seasonal, Gift and Toy Products [Member] | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 17.00% | 18.00% |
Clothing and Footwear | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 8.00% | 7.00% |
Agriculture | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 3.00% | 3.00% |
Total | ||
Revenue from External Customer [Line Items] | ||
Percentage of sales | 100.00% | 100.00% |
Segment Reporting Number of Rep
Segment Reporting Number of Reportable Segments (Details) | 3 Months Ended |
Mar. 26, 2022segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |