Tractor Supply's Q3 beats Street

But guidance hike falls short of analysts' expectations

Tractor Supply reported third-quarter results that beat analysts' expectations and raised its full-year outlook, but not enough to meet analysts' expectations.

Brentwood-based Tractor Supply said its same-store sales rose 2.9 percent during the third quarter. Total sales rose 9 percent to $1.07 billion, and the company kept cost increases in check, pushing profits up 17 percent to $50 million. Per diluted share, earnings came in at 71 cents, two cents better than analysts had been looking for. Operating margins rose 30 basis points to 7.3 percent.

"We are pleased with our same store sales gain in light of last year's very strong 11.5% comp increase and moderate inflation this year," said Chairman and CEO Jim Wright, who will step down from the latter post at year's end. "Our core [consumable, usable and edible] businesses posted solid increases above last year. Additionally, we demonstrated our ability to recognize and react quickly to the regional weather trends that developed through the quarter."

Wright also lifted Tractor Supply's earnings guidance for the full year to a range of $3.63 to $3.69 per diluted share. Previously, that range was $3.58 to $3.66. Analysts, however, had expected Tractor Supply to project full-year profits of $3.71. The midpoint of the company's new guidance projects a Q4 profit of 97 cents, but the Street had been expecting $1.04.

"We do expect the freight and mix headwinds will continue into Q4 consistent with Q3 as fuel costs have edged back up and are now slightly higher than last year at this time," CFO Tony Crudele told analysts and investors on a conference call. "And we continue to drive CUE items that are slightly below chain average margin and freight-intensive."

Shares of Tractor Supply (Ticker: TSCO) fell about 1 percent to $94.10 in after-hours trading, where they traded down much more than that at one point. Year to date, they're climbed about 35 percent.