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UPDATE 2-Tractor Supply Q4 tops Street, sees strong FY10 earns
January 27, 2010 / 9:30 PM / in 8 years

UPDATE 2-Tractor Supply Q4 tops Street, sees strong FY10 earns

* Q4 EPS $1.04 vs est $0.88

* Q4 rev $862.5 mln vs est $845.95 mln

* Sees FY10 EPS ahead of estimates

* Sees 2010 capex of $90 mln to $100 mln

* Shares up 3 pct in post mkt trade (Adds conference call details, analyst comments)

By Nivedita Bhattacharjee

BANGALORE, Jan 27 (Reuters) - Tractor Supply Co’s (TSCO.O) quarterly results beat estimates as the farm and ranch supplies retailer saw strong demand for its core categories like animal and pet-related products and said it plans to hike capital expenditures this year.

The company, which sells pet and animal products, maintenance products for agricultural and rural use, and seasonal products such as lawn and garden power equipment, also forecast strong earnings for 2010, and said its capital expenditure during the year will be $90 million to $100 million.

That is up from the $74 million it spent in 2009.

However, Tractor Supply, whose competitors include Home Depot Inc (HD.N) and Sears Holdings Corp (SHLD.O), said it expects the retail climate to remain challenging.

“We do not anticipate consumers will return to the same spending levels prior to the recession, we also do not anticipate marked change in consumer credit availability. As a result, we believe our consumer will remain value-oriented,” Chief Financial Officer Anthony Crudele said in a call with analysts.

For 2010, Tractor Supply expects to earn between $3.30 and $3.42 a share for 2010, on revenue of about $3.42 billion to $3.48 billion.

Analysts, on average, were expecting it to earn $3.27 cents a share, on revenue of $3.45 billion in 2010.

The company, which launched the Purina and Nutrena brands of equine and livestock feed brands at its stores in September, also said it plans on 70 to 80 new store openings in 2010.

“Positive Q4 channel checks reflect successful rollout of branded horse feed and good sell-through of winter seasonal merchandise,” analyst Joan Storms of Wedbush Securities said in a preview note.

New offerings at the company have been attracting new customers who previously purchased their feed from smaller mom-and-pop stores, Storms said.

“We had brisk sale in the later part of the quarter once the (cold) weather became more pronounced and as we moved into 2010,” CFO Crudele said.

For the fourth quarter ended Dec. 26, the Brentwood, Tennessee-based company earned $38.3 million, or $1.04 a share, compared with $24.7 million, or 67 cents a share, a year earlier.

Revenue rose 7.9 pct to $862.5 million.

Analysts were expecting it to earn 88 cents a share, on revenue of $846.0 million.

“For the ninth consecutive quarter, we have reduced year-over-year inventory levels per store while maintaining outstanding in-stock levels and improving inventory turns,” Chief Executive Officer Jim Wright said in a statement.

Shares of the company, were up $1.31 at $53.53 Wednesday after market. They had closed at $52.22 on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Jarshad Kakkrakandy)

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