ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3139732
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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5401 Virginia Way, Brentwood, Tennessee
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37027
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s Telephone Number, Including Area Code:
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(615) 440-4000
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.008 par value
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NASDAQ Global Select Market
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Class
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Outstanding at January 27, 2018
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Common Stock, $.008 par value
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125,116,910
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Item no.
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Form 10-K Report Page
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Item 1
.
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Business
|
•
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a thorough on-boarding process to prepare new team members for their new role;
|
•
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productive workplace environment training that is intended to educate team members on company policies and procedures covering topics such as harassment, discrimination, and retaliation;
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•
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new store opening training that prepares our store managers to open new stores to Company standards;
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•
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a management training program which covers all aspects of our store operations, delivering superior service and managing the team member experience;
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•
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structured training on customer service and selling skills;
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•
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online product knowledge training produced in conjunction with key vendors;
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•
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leadership development programs that prepare leaders to expand their current contributions; and
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•
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an annual store manager meeting with vendor product presentations.
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•
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Equine, livestock, pet and small animal products, including items necessary for their health, care, growth and containment;
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•
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Hardware, truck, towing and tool products;
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•
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Seasonal products, including heating, lawn and garden items, power equipment, gifts and toys;
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•
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Work/recreational clothing and footwear; and
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•
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Maintenance products for agricultural and rural use.
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Percent of Net Sales
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|||||||
Product Category:
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2017
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|
2016
|
|
2015
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|||
Livestock and Pet
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47
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%
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46
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%
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44
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%
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Hardware, Tools and Truck
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22
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22
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23
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Seasonal, Gift and Toy Products
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19
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19
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20
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Clothing and Footwear
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8
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8
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8
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Agriculture
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4
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5
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5
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Total
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100
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%
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100
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%
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100
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%
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Name
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Position
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Age
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Gregory A. Sandfort
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Chief Executive Officer
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62
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Steve K. Barbarick
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President – Chief Merchandising Officer
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50
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Benjamin F. Parrish, Jr.
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Executive Vice President – General Counsel and Corporate Secretary
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61
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Kurt D. Barton
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Senior Vice President – Chief Financial Officer and Treasurer
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46
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Chad M. Frazell
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Senior Vice President – Human Resources
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45
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Robert D. Mills
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Senior Vice President – Chief Information Officer
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45
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State
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Number
of Stores
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State
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Number
of Stores
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Texas
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210
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Maryland
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22
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North Carolina
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94
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New Hampshire
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21
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Pennsylvania
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93
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Maine
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20
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Tennessee
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91
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Massachusetts
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20
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Ohio
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90
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Wisconsin
|
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20
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Georgia
|
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83
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Connecticut
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19
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Michigan
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83
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Washington
|
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19
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New York
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77
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Nebraska
|
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18
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Kentucky
|
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69
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Illinois
|
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17
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Florida
|
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63
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New Jersey
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17
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California
|
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59
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Utah
|
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15
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Indiana
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57
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North Dakota
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14
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Alabama
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56
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Minnesota
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12
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Virginia
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55
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Iowa
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9
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Oklahoma
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53
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South Dakota
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9
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Louisiana
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44
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Wyoming
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8
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South Carolina
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44
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Vermont
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7
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Mississippi
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39
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Montana
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6
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Arkansas
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35
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Delaware
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5
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Arizona
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34
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Idaho
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4
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Missouri
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30
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Rhode Island
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4
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New Mexico
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28
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Nevada
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3
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West Virginia
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28
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Oregon
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3
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Colorado
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22
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Hawaii
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2
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Kansas
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22
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1,853
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Distribution Facility Location
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Approximate Square Footage
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Owned/Leased Facility
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Franklin, Kentucky
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833,000
|
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Owned
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Pendleton, Indiana
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764,000
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Owned
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Macon, Georgia
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684,000
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Owned
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Waco, Texas
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666,000
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Owned
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Casa Grande, Arizona
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650,000
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Owned
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Hagerstown, Maryland
(a)
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482,000
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Owned
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Hagerstown, Maryland
(a)
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309,000
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Leased
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Waverly, Nebraska
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422,000
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Owned
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Seguin, Texas
(b)
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71,000
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Owned
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Lakewood, Washington
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64,000
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Leased
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Longview, Texas
(b)
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63,000
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Owned
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Item 5
.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Price Range
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||||||
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2017
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2016
|
||||
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High
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Low
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High
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Low
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First Quarter
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$78.25
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$67.70
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$90.76
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$78.05
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Second Quarter
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$71.53
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$52.09
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$97.25
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$86.44
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Third Quarter
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$63.40
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$49.87
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$95.39
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$66.77
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Fourth Quarter
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$75.64
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$54.76
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$78.17
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$61.50
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Date Declared
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Dividend Amount
Per Share
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Stockholders of Record Date
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Date Paid
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November 6, 2017
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$0.27
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November 20, 2017
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December 5, 2017
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August 7, 2017
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$0.27
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August 21, 2017
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September 6, 2017
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May 8, 2017
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$0.27
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May 22, 2017
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June 6, 2017
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February 8, 2017
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$0.24
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February 27, 2017
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March 14, 2017
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October 31, 2016
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$0.24
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November 14, 2016
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November 29, 2016
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August 1, 2016
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$0.24
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August 15, 2016
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August 30, 2016
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May 2, 2016
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$0.24
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May 16, 2016
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June 1, 2016
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February 3, 2016
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$0.20
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February 22, 2016
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March 8, 2016
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Period
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Total Number
of Shares
Purchased
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Average
Price Paid
Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Value of Shares That May Yet Be
Purchased
Under the Plans or Programs
|
||||||
First Quarter
(a)
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1,605,165
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$
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71.77
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1,596,167
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$
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1,124,516,565
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Second Quarter
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2,209,506
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60.47
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2,209,506
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990,943,666
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||
Third Quarter
(a)
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1,427,570
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55.08
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1,425,371
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912,461,301
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||
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||||||
Fourth Quarter:
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||
10/1/17 – 10/28/17
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315,000
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58.98
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315,000
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893,885,189
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||
10/29/17 – 11/25/17
(a)
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259,359
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61.08
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258,801
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878,077,270
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||
11/26/17 – 12/30/17
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119,900
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69.77
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119,900
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869,713,394
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||
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694,259
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61.63
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|
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693,701
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869,713,394
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||
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||||||
As of December 30, 2017
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5,936,500
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$
|
62.36
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5,924,745
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$
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869,713,394
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12/29/2012
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12/28/2013
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12/27/2014
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12/26/2015
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12/31/2016
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12/30/2017
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||||||||||||
Tractor Supply Company
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$
|
100.00
|
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|
$
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174.14
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$
|
181.29
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|
$
|
201.04
|
|
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$
|
179.94
|
|
|
$
|
180.52
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|
S&P 500
|
|
$
|
100.00
|
|
|
$
|
134.11
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|
|
$
|
155.24
|
|
|
$
|
156.43
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|
|
$
|
173.74
|
|
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$
|
211.67
|
|
S&P Retail Index
|
|
$
|
100.00
|
|
|
$
|
147.73
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|
|
$
|
164.24
|
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|
$
|
207.15
|
|
|
$
|
219.43
|
|
|
$
|
286.13
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|
Item 6
.
|
Selected Financial Data
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(52 weeks)
|
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(53 weeks)
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(52 weeks)
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(52 weeks)
|
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(52 weeks)
|
||||||||||
Operating Results:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
7,256,382
|
|
|
$
|
6,779,579
|
|
|
$
|
6,226,507
|
|
|
$
|
5,711,715
|
|
|
$
|
5,164,784
|
|
Gross profit
|
2,491,965
|
|
|
2,325,202
|
|
|
2,143,174
|
|
|
1,950,415
|
|
|
1,753,609
|
|
|||||
Selling, general and administrative expenses
|
1,639,749
|
|
|
1,488,164
|
|
|
1,369,097
|
|
|
1,246,308
|
|
|
1,138,934
|
|
|||||
Depreciation and amortization
|
165,834
|
|
|
142,958
|
|
|
123,569
|
|
|
114,635
|
|
|
100,025
|
|
|||||
Operating income
|
686,382
|
|
|
694,080
|
|
|
650,508
|
|
|
589,472
|
|
|
514,650
|
|
|||||
Interest expense, net
|
13,859
|
|
|
5,810
|
|
|
2,891
|
|
|
1,885
|
|
|
557
|
|
|||||
Income before income taxes
|
672,523
|
|
|
688,270
|
|
|
647,617
|
|
|
587,587
|
|
|
514,093
|
|
|||||
Income tax expense
|
249,924
|
|
|
251,150
|
|
|
237,222
|
|
|
216,702
|
|
|
185,859
|
|
|||||
Net income
|
$
|
422,599
|
|
|
$
|
437,120
|
|
|
$
|
410,395
|
|
|
$
|
370,885
|
|
|
$
|
328,234
|
|
Net income per share – basic
(c)
|
$
|
3.31
|
|
|
$
|
3.29
|
|
|
$
|
3.03
|
|
|
$
|
2.69
|
|
|
$
|
2.35
|
|
Net income per share – diluted
(c)
|
$
|
3.30
|
|
|
$
|
3.27
|
|
|
$
|
3.00
|
|
|
$
|
2.66
|
|
|
$
|
2.32
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares – diluted
(c)
|
128,204
|
|
|
133,813
|
|
|
136,845
|
|
|
139,435
|
|
|
141,723
|
|
|||||
Dividends declared per common share outstanding
|
$
|
1.05
|
|
|
$
|
0.92
|
|
|
$
|
0.76
|
|
|
$
|
0.61
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Data (percent of net sales):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross margin
|
34.3
|
%
|
|
34.3
|
%
|
|
34.4
|
%
|
|
34.1
|
%
|
|
34.0
|
%
|
|||||
Selling, general and administrative expenses
|
22.6
|
%
|
|
22.0
|
%
|
|
22.0
|
%
|
|
21.8
|
%
|
|
22.1
|
%
|
|||||
Operating income
|
9.4
|
%
|
|
10.2
|
%
|
|
10.4
|
%
|
|
10.3
|
%
|
|
10.0
|
%
|
|||||
Net income
|
5.8
|
%
|
|
6.4
|
%
|
|
6.6
|
%
|
|
6.5
|
%
|
|
6.4
|
%
|
|||||
Store, Sales and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Stores open at end of year
|
1,853
|
|
|
1,738
|
|
|
1,488
|
|
|
1,382
|
|
|
1,276
|
|
|||||
Comparable store sales increase
(d)
|
2.7
|
%
|
|
1.6
|
%
|
|
3.1
|
%
|
|
3.8
|
%
|
|
4.8
|
%
|
|||||
New store sales (as a % of net sales)
(e)
|
5.6
|
%
|
|
5.6
|
%
|
|
5.6
|
%
|
|
6.2
|
%
|
|
5.4
|
%
|
|||||
Average transaction value
|
$
|
44.61
|
|
|
$
|
44.42
|
|
|
$
|
44.87
|
|
|
$
|
44.84
|
|
|
$
|
44.48
|
|
Comparable store average transaction value increase (decrease)
(c)
|
0.5
|
%
|
|
(0.9
|
)%
|
|
(0.2
|
)%
|
|
0.6
|
%
|
|
—
|
%
|
|||||
Comparable store average transaction count increase
(d)
|
2.2
|
%
|
|
2.6
|
%
|
|
3.3
|
%
|
|
3.2
|
%
|
|
4.7
|
%
|
|||||
Total selling square footage (000’s)
|
28,180
|
|
|
26,511
|
|
|
23,938
|
|
|
22,176
|
|
|
20,470
|
|
|||||
Total team members
|
29,300
|
|
|
26,000
|
|
|
23,000
|
|
|
21,100
|
|
|
19,200
|
|
|||||
Capital expenditures (000’s)
|
$
|
250,401
|
|
|
$
|
226,017
|
|
|
$
|
236,496
|
|
|
$
|
160,613
|
|
|
$
|
218,200
|
|
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Average inventory per store
(f)
|
$
|
735.4
|
|
|
$
|
741.7
|
|
|
$
|
820.1
|
|
|
$
|
752.7
|
|
|
$
|
723.5
|
|
Inventory turns
|
3.24
|
|
|
3.19
|
|
|
3.23
|
|
|
3.32
|
|
|
3.29
|
|
|||||
Working capital
(g)
|
$
|
806,154
|
|
|
$
|
740,615
|
|
|
$
|
768,177
|
|
|
$
|
670,897
|
|
|
$
|
677,107
|
|
Total assets
|
$
|
2,868,769
|
|
|
$
|
2,674,942
|
|
|
$
|
2,370,826
|
|
|
$
|
2,034,571
|
|
|
$
|
1,903,391
|
|
Long-term debt, less current portion
(h)
|
$
|
433,686
|
|
|
$
|
289,769
|
|
|
$
|
166,992
|
|
|
$
|
4,957
|
|
|
$
|
1,200
|
|
Stockholders’ equity
|
$
|
1,418,673
|
|
|
$
|
1,453,218
|
|
|
$
|
1,393,294
|
|
|
$
|
1,293,561
|
|
|
$
|
1,246,894
|
|
Item 7
.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Equine, livestock, pet and small animal products, including items necessary for their health, care, growth and containment;
|
•
|
Hardware, truck, towing and tool products;
|
•
|
Seasonal products, including heating, lawn and garden items, power equipment, gifts and toys;
|
•
|
Work/recreational clothing and footwear; and
|
•
|
Maintenance products for agricultural and rural use.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Inventory Valuation:
|
|
|
|
|
Inventory Impairment
|
|
|
|
|
We identify 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. We have established an inventory valuation reserve to recognize the estimated impairment in value (i.e., an inability to realize the full carrying value) based on our aggregate assessment of these valuation indicators under prevailing market conditions and current merchandising strategies.
|
|
We do not believe our 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.
Our impairment reserve contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding forecasted customer demand and the promotional environment.
|
|
We have not made any material changes in the accounting methodology used to recognize inventory impairment reserves in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate impairment. However, if assumptions regarding consumer demand or clearance potential for certain products are inaccurate, we may be exposed to losses or gains that could be material.
A 10% change in our impairment reserve as of December 30, 2017, would have affected net income by approximately $0.5 million in fiscal 2017.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Shrinkage
|
|
|
|
|
We perform physical inventories at least once a year for each store that has been open more than 12 months, and we have 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. We believe historical rates are a reasonably accurate reflection of future trends.
Our shrinkage reserve contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding future shrinkage trends, the effect of loss prevention measures and new merchandising strategies.
|
|
We have not made any material changes in the accounting methodology used to recognize shrinkage in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate our shrinkage reserve. However, if our estimates regarding inventory losses are inaccurate, we may be exposed to losses or gains that could be material.
A 10% change in our shrinkage reserve as of December 30, 2017, would have affected net income by approximately $1.7 million in fiscal 2017.
|
Vendor Funding
|
|
|
|
|
We receive funding from substantially all of our significant merchandise vendors, in support of our business initiatives, through a variety of programs and arrangements, including 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 our agreements, primarily volume rebates, are renegotiated annually, based on expected annual purchases of the vendor’s product.
Vendor funding is initially deferred as a reduction of the purchase price of inventory, and then recognized as a reduction of cost of merchandise as the related inventory is sold.
During interim periods, the amount of vendor support and volume rebates is estimated based upon initial commitments and anticipated purchase levels with applicable vendors.
|
|
The estimated purchase volume (and related vendor funding) is based on our current knowledge of inventory levels, sales trends and expected customer demand, as well as planned new store openings and relocations. Although we believe we 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.
Our allocation methodology contains uncertainties because the calculation requires management to make assumptions and to apply judgment regarding customer demand, purchasing activity, target thresholds, vendor attrition and collectability.
|
|
We have not made any material changes in the accounting methodology used to establish our vendor funding reserves in the financial periods presented.
At the end of each fiscal year, a significant portion of the actual purchase activity is known. Thus, we do not believe there is a reasonable likelihood that there will be a material change in the amounts recorded as vendor funding.
We do not believe there is a significant collectability risk related to vendor funding amounts due to us at the end of fiscal 2017.
If a 10% reserve had been applied against our outstanding vendor funding due as of December 30, 2017, net income would have been affected by approximately $1.4 million in fiscal 2017.
Although it is unlikely that there will be any significant reduction in historical levels of vendor funding, if such a reduction were to occur in future periods, the Company could experience a higher inventory balance and higher cost of sales.
|
Freight
|
|
|
|
|
We incur various types of transportation and delivery costs in connection with inventory purchases and distribution. Such costs are included as a component of the overall cost of inventories (on an aggregate basis) and recognized as a component of cost of merchandise sold as the related inventory is sold.
|
|
We allocate freight as a component of total cost of sales without regard to inventory mix or unique freight burden of certain categories. This assumption has been consistently applied for all years presented.
|
|
We have not made any material changes in the accounting methodology used to establish our capitalized freight balance or freight allocation in the financial periods presented.
If a 10% increase or decrease had been applied against our current inventory capitalized freight balance as of December 30, 2017, net income would have been affected by approximately $7.8 million in fiscal 2017.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Self-Insurance Reserves:
|
|
|
|
|
We self-insure a significant portion of our employee medical insurance, workers’ compensation insurance and general liability (including product liability) insurance plans. We have stop-loss insurance policies to protect from individual losses over specified dollar values.
Provisions for losses related to our self-insured liabilities are based upon periodic independent actuarially determined estimates that consider a number of factors including historical claims experience, demographic factors and severity factors.
|
|
The full extent of certain claims, especially workers’ compensation and general liability claims, may not become fully determined for several years.
Our self-insured liabilities contain uncertainties because management is required to make assumptions and to apply judgment to estimate the ultimate cost to settle reported claims and claims incurred but not reported as of the balance sheet date based upon historical data and experience, including actuarial calculations.
|
|
We have not made any material changes in the accounting methodology used to establish our self-insurance reserves in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the assumptions we use to calculate insurance reserves. However, if we experience a significant increase in the number of claims or the cost associated with these claims, we may be exposed to losses that could be material.
A 10% change in our self-insurance reserves as of December 30, 2017, would have affected net income by approximately $3.6 million in fiscal 2017.
|
Sales Tax Audit Reserve:
|
|
|
|
|
A portion of our sales are to tax-exempt customers, predominantly agricultural-based. We obtain exemption information as a necessary part of each tax-exempt transaction. Many of the states in which we conduct business will perform audits to verify our compliance with applicable sales tax laws. The business activities of our customers and the intended use of the unique products sold by us create a challenging and complex tax compliance environment. These circumstances also create some risk that we could be challenged as to the accuracy of our sales tax compliance.
When establishing our sales tax audit reserve, we review our past audit experience and assessments with applicable states to continually determine if we have potential exposure for non-compliance. Any estimated liability is based on an initial assessment of compliance risk as well as our historical experience with each respective state.
|
|
We continually reassess 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.
Our sales tax audit reserve contains uncertainties because management is required to make assumptions and to apply judgment regarding 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.
|
|
We have not made any material changes to our sales tax audit assessment methodology in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate the sales tax liability reserve. However, if our estimates regarding the ultimate sales tax liability are inaccurate, we may be exposed to losses or gains that could be material.
A 10% change in our sales tax audit reserve as of December 30, 2017, would have affected net income by approximately $0.9 million in fiscal 2017.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Tax Contingencies:
|
|
|
|
|
Our income tax returns are periodically audited by U.S. federal and state tax authorities. These audits include questions regarding our 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 our various tax filing positions, we record 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 we have established a reserve, is audited and fully resolved or clarified. We recognize 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. We adjust our tax contingencies reserve and income tax provision in the period in which actual results of a settlement with tax authorities differs from our established reserve, the statute of limitations expires for the relevant tax authority to examine the tax position or when more information becomes available.
|
|
Our tax contingencies reserve contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions and whether or not the minimum requirements for recognition of tax benefits have been met.
The effective income tax rate is also affected by changes in tax law, the tax jurisdiction of new stores or business ventures, the level of earnings and the results of tax audits.
|
|
We have not made any material changes in the accounting methodology used to establish our tax contingencies in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the reserves established for tax benefits not recognized.
Although management believes that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material.
To the extent we prevail in matters for which reserves have been established, or are required to pay amounts in excess of our reserves, our effective income tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement would require use of our cash and would result in an increase in our effective income tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in our effective income tax rate in the period of resolution.
A 10% change in our uncertain tax position reserve as of December 30, 2017, would have affected net income by approximately $0.1 million in fiscal 2017.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Impairment of Long-Lived Assets:
|
|
|
|
|
Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset’s estimated future cash flows (undiscounted and without interest charges). The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level. The significant assumptions used to determine estimated undiscounted cash flows include cash inflows and outflows directly resulting from the use of those assets in operations, including margin on net sales, payroll and related items, occupancy costs, insurance allocations and other costs to operate a store.
If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value, which may be based on an estimated future cash flow model. We recognize an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If we recognize 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.
|
|
Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values.
|
|
We have not made any material changes in our impairment loss assessment methodology in the financial periods presented.
We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. None of these estimates and assumptions are significantly sensitive, and a 10% change in any of these estimates would not have a material impact on our analysis. However, if actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Impairment of Goodwill and Other Indefinite-Lived Intangible Assets:
|
|
|
|
|
Goodwill and other indefinite-lived intangible assets are evaluated for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
In accordance with the accounting standards, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill or an indefinite-lived intangible asset is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value.
The quantitative impairment test for goodwill compares the fair value of a reporting unit with the carrying value of its net assets, including goodwill. If the fair value of the reporting unit is less than the carrying value of the reporting unit, an impairment charge would be recorded to the Company’s operations, for the amount, if any, in which the carrying amount exceeds the reporting unit’s fair value. We determine fair values for each reporting unit using the market approach, when available and appropriate, or the income approach, or a combination of both. If multiple valuation methodologies are used, the results are weighted appropriately.
The quantitative impairment test for other indefinite-lived intangible assets involves comparing the carrying amount of the asset to the sum of the discounted cash flows expected to be generated by the asset. If the implied fair value of the indefinite-lived intangible asset is less than the carrying value, an impairment charge would be recorded to the Company’s operations.
|
|
Our impairment loss calculation contains uncertainties because they require management to make assumptions and to apply judgment to qualitative factors as well as estimate future cash flows and asset fair values, including forecasting prospective financial information and selecting the discount rate that reflects the risk inherent in future cash flows.
|
|
The valuation approaches utilized to estimate fair value for the purposes of the impairment tests of goodwill and other indefinite-lived intangible assets require the use of assumptions and estimates, which involve a degree of uncertainty. If actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to non-cash impairment losses that could be material.
|
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter
|
|
Total
|
||||||||||
2017
|
|
(13 weeks)
|
|
(13 weeks)
|
|
(13 weeks)
|
|
(13 weeks)
|
|
(52 weeks)
|
||||||||||
Net sales
|
|
$
|
1,564,078
|
|
|
$
|
2,017,762
|
|
|
$
|
1,721,704
|
|
|
$
|
1,952,838
|
|
|
$
|
7,256,382
|
|
Gross profit
|
|
518,203
|
|
|
704,708
|
|
|
600,456
|
|
|
668,598
|
|
|
2,491,965
|
|
|||||
Operating income
|
|
96,362
|
|
|
257,925
|
|
|
148,253
|
|
|
183,842
|
|
|
686,382
|
|
|||||
Net income
|
|
60,311
|
|
|
160,649
|
|
|
91,896
|
|
|
109,743
|
|
|
422,599
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.46
|
|
|
$
|
1.25
|
|
|
$
|
0.73
|
|
|
$
|
0.87
|
|
|
$
|
3.31
|
|
Diluted
|
|
$
|
0.46
|
|
|
$
|
1.25
|
|
|
$
|
0.72
|
|
|
$
|
0.87
|
|
|
$
|
3.30
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comparable store sales (decrease) increase
(a)
|
|
(2.2
|
)%
|
|
2.2
|
%
|
|
6.6
|
%
|
|
4.0
|
%
|
|
2.7
|
%
|
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
Total
|
||||||||||
2016
(b)
|
|
(13 weeks)
|
|
(13 weeks)
|
|
(13 weeks)
|
|
(14 weeks)
|
|
(53 weeks)
|
||||||||||
Net sales
|
|
$
|
1,467,797
|
|
|
$
|
1,852,534
|
|
|
$
|
1,542,706
|
|
|
$
|
1,916,542
|
|
|
$
|
6,779,579
|
|
Gross profit
|
|
494,444
|
|
|
649,222
|
|
|
535,274
|
|
|
646,262
|
|
|
2,325,202
|
|
|||||
Operating income
|
|
108,195
|
|
|
249,249
|
|
|
142,020
|
|
|
194,616
|
|
|
694,080
|
|
|||||
Net income
|
|
67,668
|
|
|
156,425
|
|
|
89,444
|
|
|
123,583
|
|
|
437,120
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.51
|
|
|
$
|
1.17
|
|
|
$
|
0.67
|
|
|
$
|
0.94
|
|
|
$
|
3.29
|
|
Diluted
|
|
$
|
0.50
|
|
|
$
|
1.16
|
|
|
$
|
0.67
|
|
|
$
|
0.94
|
|
|
$
|
3.27
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comparable store sales increase (decrease)
(a)
|
|
4.9
|
%
|
|
(0.5
|
)%
|
|
(0.6
|
)%
|
|
3.1
|
%
|
|
1.6
|
%
|
|
2017
|
|
2016
|
|
2015
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of merchandise sold
(a)
|
65.7
|
|
|
65.7
|
|
|
65.6
|
|
Gross margin
(a)
|
34.3
|
|
|
34.3
|
|
|
34.4
|
|
Selling, general and administrative expenses
(a)
|
22.6
|
|
|
22.0
|
|
|
22.0
|
|
Depreciation and amortization
|
2.3
|
|
|
2.1
|
|
|
2.0
|
|
Operating income
|
9.4
|
|
|
10.2
|
|
|
10.4
|
|
Interest expense, net
|
0.2
|
|
|
0.1
|
|
|
—
|
|
Income before income taxes
|
9.2
|
|
|
10.1
|
|
|
10.4
|
|
Income tax provision
|
3.4
|
|
|
3.7
|
|
|
3.8
|
|
Net income
|
5.8
|
%
|
|
6.4
|
%
|
|
6.6
|
%
|
Tractor Supply
|
2017
|
|
2016
|
||
Store count, beginning of period
|
1,595
|
|
|
1,488
|
|
New stores opened
|
101
|
|
|
113
|
|
Stores closed
|
(11
|
)
|
|
(6
|
)
|
Store count, end of period
|
1,685
|
|
|
1,595
|
|
Petsense
|
|
|
|
||
Beginning of period
|
143
|
|
|
—
|
|
Stores acquired
|
—
|
|
|
136
|
|
New stores opened
|
25
|
|
|
8
|
|
Stores closed
|
—
|
|
|
(1
|
)
|
End of period
|
168
|
|
|
143
|
|
Consolidated end of period
|
1,853
|
|
|
1,738
|
|
|
|
|
|
||
Stores relocated
|
3
|
|
|
3
|
|
|
Percent of Net Sales
|
||||
Product Category:
|
2017
|
|
2016
|
||
Livestock and Pet
|
47
|
%
|
|
46
|
%
|
Hardware, Tools and Truck
|
22
|
|
|
22
|
|
Seasonal, Gift and Toy Products
|
19
|
|
|
19
|
|
Clothing and Footwear
|
8
|
|
|
8
|
|
Agriculture
|
4
|
|
|
5
|
|
Total
|
100
|
%
|
|
100
|
%
|
Tractor Supply
|
2016
|
|
2015
|
||
Store count, beginning of period
|
1,488
|
|
|
1,382
|
|
New stores opened
|
113
|
|
|
114
|
|
Stores closed
|
(6
|
)
|
|
(8
|
)
|
Store count, end of period
|
1,595
|
|
|
1,488
|
|
Petsense
|
|
|
|
||
Beginning of period
|
—
|
|
|
—
|
|
Stores acquired
|
136
|
|
|
—
|
|
New stores opened
|
8
|
|
|
—
|
|
Stores closed
|
(1
|
)
|
|
—
|
|
End of period
|
143
|
|
|
—
|
|
Consolidated end of period
|
1,738
|
|
|
1,488
|
|
|
|
|
|
||
Stores relocated
|
3
|
|
|
6
|
|
|
Percent of Net Sales
|
||||
Product Category:
|
2016
|
|
2015
|
||
Livestock and Pet
|
46
|
%
|
|
44
|
%
|
Hardware, Tools and Truck
|
22
|
|
|
23
|
|
Seasonal, Gift and Toy Products
|
19
|
|
|
20
|
|
Clothing and Footwear
|
8
|
|
|
8
|
|
Agriculture
|
5
|
|
|
5
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
2017
|
|
2016
|
|
Variance
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
109.1
|
|
|
$
|
53.9
|
|
|
$
|
55.2
|
|
Inventories
|
1,453.2
|
|
|
1,369.7
|
|
|
83.5
|
|
|||
Prepaid expenses and other current assets
|
88.3
|
|
|
90.6
|
|
|
(2.3
|
)
|
|||
Income taxes receivable
|
4.8
|
|
|
3.6
|
|
|
1.2
|
|
|||
Total current assets
|
1,655.4
|
|
|
1,517.8
|
|
|
137.6
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts payable
|
576.6
|
|
|
519.5
|
|
|
57.1
|
|
|||
Accrued employee compensation
|
31.6
|
|
|
25.2
|
|
|
6.4
|
|
|||
Other accrued expenses
|
201.7
|
|
|
215.7
|
|
|
(14.0
|
)
|
|||
Current portion of long-term debt
|
25.0
|
|
|
10.0
|
|
|
15.0
|
|
|||
Current portion of capital lease obligation
|
3.5
|
|
|
1.3
|
|
|
2.2
|
|
|||
Income taxes payable
|
10.8
|
|
|
5.5
|
|
|
5.3
|
|
|||
Total current liabilities
|
849.2
|
|
|
777.2
|
|
|
72.0
|
|
|||
Working capital
|
$
|
806.2
|
|
|
$
|
740.6
|
|
|
$
|
65.6
|
|
•
|
The cash balance increased primarily due to strong inventory turns at the end of fiscal 2017 stemming from the sale of cold weather seasonal merchandise.
|
•
|
The
increase
in inventory resulted from the purchase of additional inventory to support new store growth. We actively manage our inventory balances and in-stock levels at our stores. Average inventory per store decreased slightly year-over-year principally due to an improvement in inventory turns of seasonal and cold-weather merchandise at the end of fiscal 2017 as compared to fiscal 2016.
|
•
|
Accounts payable increased primarily as a result of new store growth along with timing of payments to vendors.
|
|
|
December 30,
2017 |
|
December 31,
2016 |
||||
Senior Notes
|
|
$
|
150.0
|
|
|
$
|
—
|
|
Senior Credit Facility:
|
|
|
|
|
||||
February 2016 Term Loan
|
|
180.0
|
|
|
190.0
|
|
||
June 2017 Term Loan
|
|
97.5
|
|
|
—
|
|
||
Revolving credit loans
|
|
—
|
|
|
85.0
|
|
||
Total outstanding borrowings
|
|
427.5
|
|
|
275.0
|
|
||
Less: unamortized debt issuance costs
|
|
(1.4
|
)
|
|
(1.1
|
)
|
||
Total debt
|
|
426.1
|
|
|
273.9
|
|
||
Less: current portion of long-term debt
|
|
(25.0
|
)
|
|
(10.0
|
)
|
||
Long-term debt
|
|
$
|
401.1
|
|
|
$
|
263.9
|
|
|
|
|
|
|
||||
Outstanding letters of credit
|
|
$
|
39.6
|
|
|
$
|
44.3
|
|
|
2017
|
|
2016
(a)
|
|
2015
(a)
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
(52 weeks)
|
||||||
Net cash provided by operating activities
|
$
|
631.5
|
|
|
$
|
650.7
|
|
|
$
|
456.2
|
|
Net cash used in investing activities
|
(238.0
|
)
|
|
(369.3
|
)
|
|
(235.9
|
)
|
|||
Net cash used in financing activities
|
(338.3
|
)
|
|
(291.3
|
)
|
|
(207.6
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
55.2
|
|
|
$
|
(9.9
|
)
|
|
$
|
12.7
|
|
|
2017
|
|
2016
(a)
|
|
Variance
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
|
||||||
Net income
|
$
|
422.6
|
|
|
$
|
437.1
|
|
|
$
|
(14.5
|
)
|
Depreciation and amortization
|
165.8
|
|
|
143.0
|
|
|
22.8
|
|
|||
Share-based compensation expense
|
29.2
|
|
|
23.6
|
|
|
5.6
|
|
|||
Deferred income taxes
|
26.7
|
|
|
10.0
|
|
|
16.7
|
|
|||
Inventories and accounts payable
|
(26.5
|
)
|
|
14.8
|
|
|
(41.3
|
)
|
|||
Prepaid expenses and other current assets
|
2.3
|
|
|
1.8
|
|
|
0.5
|
|
|||
Accrued expenses
|
(3.9
|
)
|
|
2.1
|
|
|
(6.0
|
)
|
|||
Income taxes
|
4.2
|
|
|
11.8
|
|
|
(7.6
|
)
|
|||
Other, net
|
11.1
|
|
|
6.5
|
|
|
4.6
|
|
|||
Net cash provided by operating activities
|
$
|
631.5
|
|
|
$
|
650.7
|
|
|
$
|
(19.2
|
)
|
|
2016
(a)
|
|
2015
(a)
|
|
Variance
|
||||||
|
(53 weeks)
|
|
(52 weeks)
|
|
|
||||||
Net income
|
$
|
437.1
|
|
|
$
|
410.4
|
|
|
$
|
26.7
|
|
Depreciation and amortization
|
143.0
|
|
|
123.6
|
|
|
19.4
|
|
|||
Stock compensation expense
|
23.6
|
|
|
19.4
|
|
|
4.2
|
|
|||
Deferred income taxes
|
10.0
|
|
|
(5.5
|
)
|
|
15.5
|
|
|||
Inventories and accounts payable
|
14.8
|
|
|
(112.5
|
)
|
|
127.3
|
|
|||
Prepaid expenses and other current assets
|
1.8
|
|
|
(21.1
|
)
|
|
22.9
|
|
|||
Accrued expenses
|
2.1
|
|
|
16.9
|
|
|
(14.8
|
)
|
|||
Income taxes payable
|
11.8
|
|
|
16.3
|
|
|
(4.5
|
)
|
|||
Other, net
|
6.5
|
|
|
8.7
|
|
|
(2.2
|
)
|
|||
Net cash provided by operating activities
|
$
|
650.7
|
|
|
$
|
456.2
|
|
|
$
|
194.5
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
(52 weeks)
|
||||||
Information technology
|
$
|
82.1
|
|
|
$
|
40.5
|
|
|
$
|
35.8
|
|
New and relocated stores and stores not yet opened
|
79.3
|
|
|
111.2
|
|
|
96.7
|
|
|||
Distribution center capacity and improvements
|
45.8
|
|
|
21.0
|
|
|
80.2
|
|
|||
Existing stores
|
43.0
|
|
|
53.1
|
|
|
23.1
|
|
|||
Corporate and other
|
0.2
|
|
|
0.2
|
|
|
0.7
|
|
|||
Total capital expenditures
|
$
|
250.4
|
|
|
$
|
226.0
|
|
|
$
|
236.5
|
|
•
|
We plan to open approximately
80
Tractor Supply stores and 20 Petsense stores in fiscal
2018
.
|
•
|
We plan to continue to invest in the development of our new northeast distribution center. We also plan to invest in two additional mixing centers and an East Coast import center.
|
•
|
Additionally, we will continue to enhance our digital and omni-channel capabilities to better serve our customers.
|
|
2017
|
|
2016
(a)
|
|
Variance
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
|
||||||
Net borrowings and repayments under debt facilities
|
$
|
152.5
|
|
|
$
|
125.0
|
|
|
$
|
27.5
|
|
Repurchase of common stock
|
(369.4
|
)
|
|
(331.7
|
)
|
|
(37.7
|
)
|
|||
Net proceeds from issuance of common stock
|
16.3
|
|
|
41.0
|
|
|
(24.7
|
)
|
|||
Cash dividends paid to stockholders
|
(133.8
|
)
|
|
(122.3
|
)
|
|
(11.5
|
)
|
|||
Other, net
|
(3.9
|
)
|
|
(3.3
|
)
|
|
(0.6
|
)
|
|||
Net cash used in financing activities
|
$
|
(338.3
|
)
|
|
$
|
(291.3
|
)
|
|
$
|
(47.0
|
)
|
|
2016
(a)
|
|
2015
(a)
|
|
Variance
|
||||||
|
(53 weeks)
|
|
(52 weeks)
|
|
|
||||||
Net borrowings and repayments under debt facilities
|
$
|
125.0
|
|
|
$
|
150.0
|
|
|
$
|
(25.0
|
)
|
Repurchase of common stock
|
(331.7
|
)
|
|
(292.7
|
)
|
|
(39.0
|
)
|
|||
Net proceeds from issuance of common stock
|
41.0
|
|
|
41.7
|
|
|
(0.7
|
)
|
|||
Cash dividends paid to stockholders
|
(122.3
|
)
|
|
(103.1
|
)
|
|
(19.2
|
)
|
|||
Other, net
|
(3.3
|
)
|
|
(3.5
|
)
|
|
0.2
|
|
|||
Net cash used in financing activities
|
$
|
(291.3
|
)
|
|
$
|
(207.6
|
)
|
|
$
|
(83.7
|
)
|
|
|
Payment Due by Period
|
||||||||||||||||||
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Operating leases
|
|
$
|
2,680,687
|
|
|
$
|
324,813
|
|
|
$
|
611,835
|
|
|
$
|
524,991
|
|
|
$
|
1,219,048
|
|
Capital leases
(a)
|
|
48,265
|
|
|
5,201
|
|
|
10,449
|
|
|
9,466
|
|
|
23,149
|
|
|||||
Long-term debt
(b)
|
|
512,400
|
|
|
36,222
|
|
|
78,280
|
|
|
211,114
|
|
|
186,784
|
|
|||||
Construction commitments
(c)
|
|
55,000
|
|
|
55,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$
|
3,296,352
|
|
|
$
|
421,236
|
|
|
$
|
700,564
|
|
|
$
|
745,571
|
|
|
$
|
1,428,981
|
|
Item 8
.
|
Financial Statements and Supplementary Data
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
/s/ Gregory A. Sandfort
|
|
|
|
/s/ Kurt D. Barton
|
Gregory A. Sandfort
Chief Executive Officer
|
|
|
|
Kurt D. Barton
Senior Vice President -
Chief Financial Officer and Treasurer
|
February 22, 2018
|
|
|
|
February 22, 2018
|
|
Fiscal Year
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
(52 weeks)
|
||||||
Net sales
|
$
|
7,256,382
|
|
|
$
|
6,779,579
|
|
|
$
|
6,226,507
|
|
Cost of merchandise sold
|
4,764,417
|
|
|
4,454,377
|
|
|
4,083,333
|
|
|||
Gross profit
|
2,491,965
|
|
|
2,325,202
|
|
|
2,143,174
|
|
|||
Selling, general and administrative expenses
|
1,639,749
|
|
|
1,488,164
|
|
|
1,369,097
|
|
|||
Depreciation and amortization
|
165,834
|
|
|
142,958
|
|
|
123,569
|
|
|||
Operating income
|
686,382
|
|
|
694,080
|
|
|
650,508
|
|
|||
Interest expense, net
|
13,859
|
|
|
5,810
|
|
|
2,891
|
|
|||
Income before income taxes
|
672,523
|
|
|
688,270
|
|
|
647,617
|
|
|||
Income tax expense
|
249,924
|
|
|
251,150
|
|
|
237,222
|
|
|||
Net income
|
$
|
422,599
|
|
|
$
|
437,120
|
|
|
$
|
410,395
|
|
|
|
|
|
|
|
||||||
Net income per share – basic
|
$
|
3.31
|
|
|
$
|
3.29
|
|
|
$
|
3.03
|
|
Net income per share – diluted
|
$
|
3.30
|
|
|
$
|
3.27
|
|
|
$
|
3.00
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|||
Basic
|
127,588
|
|
|
132,905
|
|
|
135,582
|
|
|||
Diluted
|
128,204
|
|
|
133,813
|
|
|
136,845
|
|
|||
|
|
|
|
|
|
||||||
Dividends declared per common share outstanding
|
$
|
1.05
|
|
|
$
|
0.92
|
|
|
$
|
0.76
|
|
|
Fiscal Year
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
(52 weeks)
|
||||||
Net income
|
$
|
422,599
|
|
|
$
|
437,120
|
|
|
$
|
410,395
|
|
|
|
|
|
|
|
||||||
Other comprehensive income:
|
|
|
|
|
|
||||||
Change in fair value of interest rate swaps, net of taxes
|
1,371
|
|
|
1,392
|
|
|
—
|
|
|||
Total other comprehensive income
|
1,371
|
|
|
1,392
|
|
|
—
|
|
|||
Total comprehensive income
|
$
|
423,970
|
|
|
$
|
438,512
|
|
|
$
|
410,395
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
109,148
|
|
|
$
|
53,916
|
|
Inventories
|
1,453,208
|
|
|
1,369,656
|
|
||
Prepaid expenses and other current assets
|
88,252
|
|
|
90,557
|
|
||
Income taxes receivable
|
4,760
|
|
|
3,680
|
|
||
Total current assets
|
1,655,368
|
|
|
1,517,809
|
|
||
|
|
|
|
||||
Property and equipment:
|
|
|
|
|
|
||
Land
|
99,336
|
|
|
94,940
|
|
||
Buildings and improvements
|
1,037,730
|
|
|
965,582
|
|
||
Furniture, fixtures and equipment
|
605,957
|
|
|
567,653
|
|
||
Computer software and hardware
|
266,898
|
|
|
224,370
|
|
||
Construction in progress
|
83,816
|
|
|
21,320
|
|
||
Property and equipment, gross
|
2,093,737
|
|
|
1,873,865
|
|
||
Accumulated depreciation and amortization
|
(1,049,234
|
)
|
|
(911,557
|
)
|
||
Property and equipment, net
|
1,044,503
|
|
|
962,308
|
|
||
|
|
|
|
||||
Goodwill and other intangible assets
|
124,492
|
|
|
125,717
|
|
||
Deferred income taxes
|
18,494
|
|
|
45,218
|
|
||
Other assets
|
25,912
|
|
|
23,890
|
|
||
|
|
|
|
||||
Total assets
|
$
|
2,868,769
|
|
|
$
|
2,674,942
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
576,568
|
|
|
$
|
519,522
|
|
Accrued employee compensation
|
31,673
|
|
|
25,246
|
|
||
Other accrued expenses
|
201,656
|
|
|
215,650
|
|
||
Current portion of long-term debt
|
25,000
|
|
|
10,000
|
|
||
Current portion of capital lease obligations
|
3,545
|
|
|
1,294
|
|
||
Income taxes payable
|
10,772
|
|
|
5,482
|
|
||
Total current liabilities
|
849,214
|
|
|
777,194
|
|
||
|
|
|
|
||||
Long-term debt
|
401,069
|
|
|
263,850
|
|
||
Capital lease obligations, less current maturities
|
32,617
|
|
|
25,919
|
|
||
Deferred rent
|
105,906
|
|
|
100,078
|
|
||
Other long-term liabilities
|
61,290
|
|
|
54,683
|
|
||
Total liabilities
|
1,450,096
|
|
|
1,221,724
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred Stock, $1.00 par value; 40 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common Stock, $0.008 par value; 400,000 shares authorized at December 30, 2017 and December 31, 2016; 170,375 shares issued and 125,303 shares outstanding at December 30, 2017 and 169,943 shares issued and 130,795 shares outstanding at December 31, 2016
|
1,363
|
|
|
1,360
|
|
||
Additional paid-in capital
|
716,228
|
|
|
671,515
|
|
||
Treasury stock, at cost, 45,072 shares at December 30, 2017 and 39,148 shares at December 31, 2016
|
(2,130,901
|
)
|
|
(1,761,498
|
)
|
||
Accumulated other comprehensive income
|
2,763
|
|
|
1,392
|
|
||
Retained earnings
|
2,829,220
|
|
|
2,540,449
|
|
||
Total stockholders’ equity
|
1,418,673
|
|
|
1,453,218
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,868,769
|
|
|
$
|
2,674,942
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Shares
|
|
Dollars
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Accum. Other Comp. Income
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||||
Stockholders' equity at
December 27, 2014 |
136,382
|
|
|
$
|
1,342
|
|
|
$
|
510,997
|
|
|
$
|
(1,137,085
|
)
|
|
$
|
—
|
|
|
$
|
1,918,307
|
|
|
$
|
1,293,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of common stock under employee stock purchase plan
|
68
|
|
|
1
|
|
|
4,709
|
|
|
|
|
|
|
|
|
|
4,710
|
|
||||||||
Exercise of stock options and restricted stock units
|
1,190
|
|
|
9
|
|
|
36,970
|
|
|
|
|
|
|
|
|
|
|
36,979
|
|
|||||||
Share-based compensation
|
|
|
|
|
|
|
19,420
|
|
|
|
|
|
|
|
|
|
|
19,420
|
|
|||||||
Tax benefit of stock options exercised
|
|
|
|
|
|
|
27,032
|
|
|
|
|
|
|
|
|
|
|
27,032
|
|
|||||||
Repurchase of shares to satisfy tax obligations
|
|
|
|
|
|
|
(2,997
|
)
|
|
|
|
|
|
|
|
|
|
(2,997
|
)
|
|||||||
Repurchase of common stock
|
(3,416
|
)
|
|
|
|
|
|
|
|
(292,705
|
)
|
|
|
|
|
|
|
(292,705
|
)
|
|||||||
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(103,101
|
)
|
|
(103,101
|
)
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
410,395
|
|
|
410,395
|
|
|||||||
Stockholders' equity at
December 26, 2015 |
134,224
|
|
|
1,352
|
|
|
596,131
|
|
|
(1,429,790
|
)
|
|
—
|
|
|
2,225,601
|
|
|
1,393,294
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of common stock under employee stock purchase plan
|
70
|
|
|
1
|
|
|
4,808
|
|
|
|
|
|
|
|
|
|
|
4,809
|
|
|||||||
Exercise of stock options and restricted stock units
|
899
|
|
|
7
|
|
|
36,194
|
|
|
|
|
|
|
|
|
|
|
36,201
|
|
|||||||
Share-based compensation
|
|
|
|
|
|
|
23,554
|
|
|
|
|
|
|
|
|
|
|
23,554
|
|
|||||||
Tax benefit of stock options exercised
|
|
|
|
|
|
|
11,671
|
|
|
|
|
|
|
|
|
|
|
11,671
|
|
|||||||
Repurchase of shares to satisfy tax obligations
|
|
|
|
|
|
|
(843
|
)
|
|
|
|
|
|
|
|
|
|
(843
|
)
|
|||||||
Repurchase of common stock
|
(4,398
|
)
|
|
|
|
|
|
|
|
(331,708
|
)
|
|
|
|
|
|
|
(331,708
|
)
|
|||||||
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(122,272
|
)
|
|
(122,272
|
)
|
|||||||
Change in fair value of interest rate swaps, net of taxes
|
|
|
|
|
|
|
|
|
1,392
|
|
|
|
|
1,392
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
437,120
|
|
|
437,120
|
|
|||||||
Stockholders' equity at
December 31, 2016 |
130,795
|
|
|
1,360
|
|
|
671,515
|
|
|
(1,761,498
|
)
|
|
1,392
|
|
|
2,540,449
|
|
|
1,453,218
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of common stock under employee stock purchase plan
|
83
|
|
|
1
|
|
|
4,282
|
|
|
|
|
|
|
|
|
4,283
|
|
|||||||||
Exercise of stock options and restricted stock units
|
349
|
|
|
2
|
|
|
12,045
|
|
|
|
|
|
|
|
|
12,047
|
|
|||||||||
Share-based compensation
|
|
|
|
|
|
29,202
|
|
|
|
|
|
|
|
|
29,202
|
|
||||||||||
Repurchase of shares to satisfy tax obligations
|
|
|
|
|
|
(816
|
)
|
|
|
|
|
|
|
|
(816
|
)
|
||||||||||
Repurchase of common stock
|
(5,924
|
)
|
|
|
|
|
|
(369,403
|
)
|
|
|
|
|
|
(369,403
|
)
|
||||||||||
Dividends paid
|
|
|
|
|
|
|
|
|
|
|
|
(133,828
|
)
|
|
(133,828
|
)
|
||||||||||
Change in fair value of interest rate swaps, net of taxes
|
|
|
|
|
|
|
|
|
|
1,371
|
|
|
|
|
1,371
|
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
422,599
|
|
|
422,599
|
|
||||||||||
Stockholders' equity at
December 30, 2017 |
125,303
|
|
|
$
|
1,363
|
|
|
$
|
716,228
|
|
|
$
|
(2,130,901
|
)
|
|
$
|
2,763
|
|
|
$
|
2,829,220
|
|
|
$
|
1,418,673
|
|
|
Fiscal Year
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(52 weeks)
|
|
(53 weeks)
|
|
(52 weeks)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
422,599
|
|
|
$
|
437,120
|
|
|
$
|
410,395
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
165,834
|
|
|
142,958
|
|
|
123,569
|
|
|||
Loss on disposition of property and equipment
|
460
|
|
|
579
|
|
|
315
|
|
|||
Share-based compensation expense
|
29,202
|
|
|
23,554
|
|
|
19,420
|
|
|||
Deferred income taxes
|
26,724
|
|
|
9,976
|
|
|
(5,450
|
)
|
|||
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Inventories
|
(83,552
|
)
|
|
(67,650
|
)
|
|
(168,925
|
)
|
|||
Prepaid expenses and other current assets
|
2,305
|
|
|
1,782
|
|
|
(21,066
|
)
|
|||
Accounts payable
|
57,046
|
|
|
82,477
|
|
|
56,426
|
|
|||
Accrued employee compensation
|
6,427
|
|
|
(18,237
|
)
|
|
5,628
|
|
|||
Other accrued expenses
|
(10,338
|
)
|
|
20,368
|
|
|
11,252
|
|
|||
Income taxes
|
4,210
|
|
|
11,787
|
|
|
16,282
|
|
|||
Other
|
10,533
|
|
|
5,997
|
|
|
8,366
|
|
|||
Net cash provided by operating activities
|
631,450
|
|
|
650,711
|
|
|
456,212
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
(250,401
|
)
|
|
(226,017
|
)
|
|
(236,496
|
)
|
|||
Proceeds from sale of property and equipment
|
11,220
|
|
|
362
|
|
|
584
|
|
|||
Acquisition of Petsense, net of cash acquired
|
1,225
|
|
|
(143,610
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(237,956
|
)
|
|
(369,265
|
)
|
|
(235,912
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Borrowings under debt facilities
|
1,180,000
|
|
|
945,000
|
|
|
680,000
|
|
|||
Repayments under debt facilities
|
(1,027,500
|
)
|
|
(820,000
|
)
|
|
(530,000
|
)
|
|||
Debt issuance costs
|
(599
|
)
|
|
(1,380
|
)
|
|
—
|
|
|||
Principal payments under capital lease obligations
|
(2,446
|
)
|
|
(1,150
|
)
|
|
(507
|
)
|
|||
Repurchase of shares to satisfy tax obligations
|
(816
|
)
|
|
(843
|
)
|
|
(2,997
|
)
|
|||
Repurchase of common stock
|
(369,403
|
)
|
|
(331,708
|
)
|
|
(292,705
|
)
|
|||
Net proceeds from issuance of common stock
|
16,330
|
|
|
41,010
|
|
|
41,689
|
|
|||
Cash dividends paid to stockholders
|
(133,828
|
)
|
|
(122,272
|
)
|
|
(103,101
|
)
|
|||
Net cash used in financing activities
|
(338,262
|
)
|
|
(291,343
|
)
|
|
(207,621
|
)
|
|||
Net change in cash and cash equivalents
|
55,232
|
|
|
(9,897
|
)
|
|
12,679
|
|
|||
Cash and cash equivalents at beginning of year
|
53,916
|
|
|
63,813
|
|
|
51,134
|
|
|||
Cash and cash equivalents at end of year
|
$
|
109,148
|
|
|
$
|
53,916
|
|
|
$
|
63,813
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
10,481
|
|
|
$
|
6,124
|
|
|
$
|
2,283
|
|
Income taxes
|
219,081
|
|
|
232,258
|
|
|
226,968
|
|
|||
|
|
|
|
|
|
||||||
Supplemental disclosures of non-cash activities:
|
|
|
|
|
|
||||||
Property and equipment acquired through capital lease
|
$
|
11,395
|
|
|
$
|
10,493
|
|
|
$
|
13,207
|
|
Non-cash accruals for construction in progress
|
8,647
|
|
|
12,303
|
|
|
16,050
|
|
|
Life
|
Buildings
|
30 – 35 years
|
Leasehold and building improvements
|
1 – 35 years
|
Furniture, fixtures and equipment
|
5 – 10 years
|
Computer software and hardware
|
3 – 5 years
|
|
|
Bond Term
|
Bond Authorized Amount
(in millions)
|
Amount Drawn
(in millions)
|
Franklin, Kentucky Distribution Center
|
|
30 years
|
$54.0
|
$51.8
|
Macon, Georgia Distribution Center
|
|
15 years
|
$58.0
|
$49.9
|
Brentwood, Tennessee Store Support Center
|
|
10 years
|
$78.0
|
$75.3
|
|
Fiscal Year
|
||||||
|
2017
|
|
2016
|
|
2015
|
||
Expected price volatility
|
25.1 - 26.0%
|
|
|
25.5 - 27.9%
|
|
|
27.3 – 28.8%
|
Risk-free interest rate
|
1.7 - 1.9%
|
|
|
0.9 - 1.3%
|
|
|
1.2 – 1.5%
|
Weighted average expected lives (in years)
|
4.4
|
|
|
4.4
|
|
|
4.5
|
Forfeiture rate
|
7.2
|
%
|
|
7.1
|
%
|
|
6.9%
|
Dividend yield
|
1.3
|
%
|
|
0.9
|
%
|
|
1.0%
|
|
Options
|
|
Weighted
Average Exercise
Price
|
|
Weighted Average Fair Value
|
|
Weighted Average
Remaining
Contractual Term
|
|
Aggregate Intrinsic Value
(
in thousands)
|
|||||||
Outstanding December 27, 2014
|
4,083,426
|
|
|
$
|
41.93
|
|
|
|
|
|
7.2
|
|
$
|
146,967
|
|
|
Granted
|
1,080,490
|
|
|
83.70
|
|
|
$
|
19.53
|
|
|
|
|
|
|||
Exercised
|
(1,116,828
|
)
|
|
33.11
|
|
|
|
|
|
|
|
|||||
Canceled
|
(185,582
|
)
|
|
67.28
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
Outstanding December 26, 2015
|
3,861,506
|
|
|
$
|
54.95
|
|
|
|
|
7.1
|
|
$
|
119,050
|
|
||
Granted
|
1,150,941
|
|
|
86.05
|
|
|
$
|
19.27
|
|
|
|
|
|
|||
Exercised
|
(851,118
|
)
|
|
42.53
|
|
|
|
|
|
|
|
|||||
Canceled
|
(187,582
|
)
|
|
80.01
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
Outstanding December 31, 2016
|
3,973,747
|
|
|
$
|
65.43
|
|
|
|
|
6.9
|
|
$
|
59,601
|
|
||
Granted
|
1,625,140
|
|
|
72.11
|
|
|
$
|
14.56
|
|
|
|
|
|
|||
Exercised
|
(309,904
|
)
|
|
38.87
|
|
|
|
|
|
|
|
|||||
Canceled
|
(290,457
|
)
|
|
79.08
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
Outstanding December 30, 2017
|
4,998,526
|
|
|
$
|
68.46
|
|
|
|
|
6.9
|
|
$
|
50,145
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Exercisable at December 30, 2017
|
2,582,283
|
|
|
$
|
60.46
|
|
|
|
|
5.3
|
|
$
|
45,939
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total fair value of stock options vested
|
$
|
15,996
|
|
|
$
|
15,184
|
|
|
$
|
13,207
|
|
Total intrinsic value of stock options exercised
|
$
|
9,237
|
|
|
$
|
39,696
|
|
|
$
|
60,082
|
|
Restricted Stock Units
|
|
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Restricted at December 27, 2014
|
|
277,347
|
|
|
$
|
42.64
|
|
Granted
|
|
56,052
|
|
|
84.86
|
|
|
Exercised
|
|
(107,548
|
)
|
|
25.97
|
|
|
Forfeited
|
|
(6,234
|
)
|
|
63.57
|
|
|
|
|
|
|
|
|||
Restricted at December 26, 2015
|
|
219,617
|
|
|
$
|
60.99
|
|
Granted
|
|
59,586
|
|
|
83.22
|
|
|
Exercised
|
|
(58,503
|
)
|
|
52.51
|
|
|
Forfeited
|
|
(26,669
|
)
|
|
76.51
|
|
|
|
|
|
|
|
|||
Restricted at December 31, 2016
|
|
194,031
|
|
|
$
|
68.04
|
|
Granted
|
|
85,049
|
|
|
66.34
|
|
|
Exercised
|
|
(51,069
|
)
|
|
64.64
|
|
|
Forfeited
|
|
(4,781
|
)
|
|
79.65
|
|
|
|
|
|
|
|
|||
Restricted at December 30, 2017
|
|
223,230
|
|
|
$
|
67.92
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total grant date fair value of restricted stock units vested and issued
|
$
|
3,301
|
|
|
$
|
3,072
|
|
|
$
|
2,793
|
|
Total intrinsic value of restricted stock units vested and issued
|
$
|
3,465
|
|
|
$
|
5,104
|
|
|
$
|
9,139
|
|
Consideration transferred
|
$
|
144,476
|
|
Assets acquired:
|
|
||
Current assets
|
$
|
21,875
|
|
Property and equipment
|
25,519
|
|
|
Other intangible assets - tradename
|
31,300
|
|
|
Other assets
|
428
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
(12,091
|
)
|
|
Long-term liabilities
|
(5,489
|
)
|
|
Total identifiable net assets acquired
|
61,542
|
|
|
Excess of consideration transferred over identifiable net assets acquired (goodwill)
|
$
|
82,934
|
|
|
2017
|
|
2016
|
||||
Balance, beginning of year
|
$
|
94,417
|
|
|
$
|
10,258
|
|
Goodwill acquired as part of acquisition
|
—
|
|
|
84,159
|
|
||
Working capital settlement
|
(1,225
|
)
|
|
—
|
|
||
Impairment loss
|
—
|
|
|
—
|
|
||
Balance, end of year
|
$
|
93,192
|
|
|
$
|
94,417
|
|
|
|
December 30,
2017 |
|
December 31,
2016 |
||||
Senior Notes
|
|
$
|
150.0
|
|
|
$
|
—
|
|
Senior Credit Facility:
|
|
|
|
|
||||
February 2016 Term Loan
|
|
180.0
|
|
|
190.0
|
|
||
June 2017 Term Loan
|
|
97.5
|
|
|
—
|
|
||
Revolving credit loans
|
|
—
|
|
|
85.0
|
|
||
Total outstanding borrowings
|
|
427.5
|
|
|
275.0
|
|
||
Less: unamortized debt issuance costs
|
|
(1.4
|
)
|
|
(1.1
|
)
|
||
Total debt
|
|
426.1
|
|
|
273.9
|
|
||
Less: current portion of long-term debt
|
|
(25.0
|
)
|
|
(10.0
|
)
|
||
Long-term debt
|
|
$
|
401.1
|
|
|
$
|
263.9
|
|
|
|
|
|
|
||||
Outstanding letters of credit
|
|
$
|
39.6
|
|
|
$
|
44.3
|
|
|
|
Balance Sheet Location
|
|
2017
|
|
2016
|
||||
Interest rate swaps (short-term portion)
|
|
Other current assets / (Other accrued expenses)
|
|
$
|
900
|
|
|
$
|
(398
|
)
|
Interest rate swaps (long-term portion)
|
|
Other assets
|
|
4,252
|
|
|
3,215
|
|
||
Total net assets
|
|
|
|
$
|
5,152
|
|
|
$
|
2,817
|
|
|
|
2017
|
|
2016
|
||||
Beginning fiscal year AOCI balance
|
|
$
|
1,392
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Current fiscal period gain recognized in OCI
|
|
1,371
|
|
|
1,392
|
|
||
Amounts reclassified from AOCI (AOCL) into current fiscal period earnings
|
|
—
|
|
|
—
|
|
||
Other comprehensive gain, net of tax
|
|
1,371
|
|
|
1,392
|
|
||
Ending fiscal period AOCI balance
|
|
$
|
2,763
|
|
|
$
|
1,392
|
|
|
|
Financial Statement Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
Effective portion of gains recognized in OCI
during the period
|
|
Other comprehensive income
|
|
$
|
2,240
|
|
|
$
|
2,283
|
|
|
$
|
—
|
|
Amounts reclassified from AOCI (AOCL) into earnings
|
|
Interest expense, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ineffective portion of gains recognized in earnings
during the period
|
|
Interest expense, net
|
|
95
|
|
|
534
|
|
|
—
|
|
|
|
2017
|
|
2016
|
||||
Income tax expense of interest rate swaps on AOCI
|
|
$
|
869
|
|
|
$
|
891
|
|
|
Capital
Leases
|
|
Operating
Leases
|
||||
2018
|
$
|
5,201
|
|
|
$
|
324,813
|
|
2019
|
5,215
|
|
|
315,062
|
|
||
2020
|
5,234
|
|
|
296,773
|
|
||
2021
|
5,294
|
|
|
273,932
|
|
||
2022
|
4,172
|
|
|
251,059
|
|
||
Thereafter
|
23,149
|
|
|
1,219,048
|
|
||
Total minimum lease payments
|
48,265
|
|
|
$
|
2,680,687
|
|
|
Amount representing interest
|
(12,103
|
)
|
|
|
|
||
Present value of minimum lease payments
|
36,162
|
|
|
|
|
||
Less: current portion
|
(3,545
|
)
|
|
|
|
||
Long-term capital lease obligations
|
$
|
32,617
|
|
|
|
|
|
2017
|
|
2016
|
||||
Building and improvements, gross
|
$
|
29,324
|
|
|
$
|
29,324
|
|
Computer software and hardware
|
11,388
|
|
|
—
|
|
||
Less: accumulated depreciation and amortization
|
(6,462
|
)
|
|
(3,381
|
)
|
||
Assets under capital lease, net
|
$
|
34,250
|
|
|
$
|
25,943
|
|
Date Declared
|
|
Dividend Amount
Per Share
|
|
Stockholders of Record Date
|
|
Date Paid
|
November 6, 2017
|
|
$0.27
|
|
November 20, 2017
|
|
December 5, 2017
|
August 7, 2017
|
|
$0.27
|
|
August 21, 2017
|
|
September 6, 2017
|
May 8, 2017
|
|
$0.27
|
|
May 22, 2017
|
|
June 6, 2017
|
February 8, 2017
|
|
$0.24
|
|
February 27, 2017
|
|
March 14, 2017
|
|
|
|
|
|
|
|
October 31, 2016
|
|
$0.24
|
|
November 14, 2016
|
|
November 29, 2016
|
August 1, 2016
|
|
$0.24
|
|
August 15, 2016
|
|
August 30, 2016
|
May 2, 2016
|
|
$0.24
|
|
May 16, 2016
|
|
June 1, 2016
|
February 3, 2016
|
|
$0.20
|
|
February 22, 2016
|
|
March 8, 2016
|
|
2017
|
|||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|||||
Basic net income per share
|
$
|
422,599
|
|
|
127,588
|
|
|
$
|
3.31
|
|
Dilutive stock options and restricted stock units outstanding
|
—
|
|
|
616
|
|
|
(0.01
|
)
|
||
Diluted net income per share
|
$
|
422,599
|
|
|
128,204
|
|
|
$
|
3.30
|
|
|
2016
|
|||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|||||
Basic net income per share
|
$
|
437,120
|
|
|
132,905
|
|
|
$
|
3.29
|
|
Dilutive stock options and restricted stock units outstanding
|
—
|
|
|
908
|
|
|
(0.02
|
)
|
||
Diluted net income per share
|
$
|
437,120
|
|
|
133,813
|
|
|
$
|
3.27
|
|
|
2015
|
|||||||||
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|||||
Basic net income per share
|
$
|
410,395
|
|
|
135,582
|
|
|
$
|
3.03
|
|
Dilutive stock options and restricted stock units outstanding
|
—
|
|
|
1,263
|
|
|
(0.03
|
)
|
||
Diluted net income per share
|
$
|
410,395
|
|
|
136,845
|
|
|
$
|
3.00
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current tax expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
207,986
|
|
|
$
|
221,207
|
|
|
$
|
225,253
|
|
State
|
14,516
|
|
|
20,858
|
|
|
17,419
|
|
|||
Total current
|
222,502
|
|
|
242,065
|
|
|
242,672
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
|||||
Federal
|
22,469
|
|
|
12,256
|
|
|
(7,017
|
)
|
|||
State
|
4,953
|
|
|
(3,171
|
)
|
|
1,567
|
|
|||
Total deferred
|
27,422
|
|
|
9,085
|
|
|
(5,450
|
)
|
|||
Total provision
|
$
|
249,924
|
|
|
$
|
251,150
|
|
|
$
|
237,222
|
|
|
2017
|
|
2016
|
||||
Tax assets:
|
|
|
|
||||
Inventory valuation
|
$
|
13,029
|
|
|
$
|
19,713
|
|
Accrued employee benefits costs
|
7,092
|
|
|
14,120
|
|
||
Accrued sales tax audit reserve
|
3,479
|
|
|
4,317
|
|
||
Rent expenses in excess of cash payments required
|
24,728
|
|
|
35,391
|
|
||
Deferred compensation
|
20,299
|
|
|
23,978
|
|
||
Workers’ compensation insurance
|
9,153
|
|
|
13,565
|
|
||
General liability insurance
|
4,265
|
|
|
5,332
|
|
||
Lease exit obligations
|
1,829
|
|
|
2,617
|
|
||
Income tax credits
|
4,206
|
|
|
4,265
|
|
||
Other
|
6,997
|
|
|
7,311
|
|
||
|
95,077
|
|
|
130,609
|
|
||
Tax liabilities:
|
|
|
|
|
|
||
Inventory basis difference
|
(4,141
|
)
|
|
(4,600
|
)
|
||
Prepaid expenses
|
(1,423
|
)
|
|
(2,912
|
)
|
||
Depreciation
|
(65,650
|
)
|
|
(73,336
|
)
|
||
Amortization
|
(3,818
|
)
|
|
(2,419
|
)
|
||
Other
|
(1,551
|
)
|
|
(2,124
|
)
|
||
|
(76,583
|
)
|
|
(85,391
|
)
|
||
|
|
|
|
||||
Net deferred tax asset
|
$
|
18,494
|
|
|
$
|
45,218
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Tax provision at statutory rate
|
$
|
235,383
|
|
|
$
|
240,894
|
|
|
$
|
226,666
|
|
Tax effect of:
|
|
|
|
|
|
||||||
State income taxes, net of federal tax benefits
|
14,320
|
|
|
15,527
|
|
|
13,976
|
|
|||
Tax credits, net of federal tax benefits
|
(5,060
|
)
|
|
(7,227
|
)
|
|
(3,763
|
)
|
|||
Stock-based compensation programs
|
(1,040
|
)
|
|
—
|
|
|
—
|
|
|||
Enactment of tax legislation
|
4,856
|
|
|
—
|
|
|
—
|
|
|||
Other
|
1,465
|
|
|
1,956
|
|
|
343
|
|
|||
Total income tax expense
|
$
|
249,924
|
|
|
$
|
251,150
|
|
|
$
|
237,222
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
1,579
|
|
|
$
|
2,922
|
|
|
$
|
3,500
|
|
Additions based on tax positions related to the current year
|
527
|
|
|
460
|
|
|
869
|
|
|||
Additions for tax positions of prior years
|
14
|
|
|
139
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
(127
|
)
|
|
(1,829
|
)
|
|
(1,447
|
)
|
|||
Reductions due to audit results
|
—
|
|
|
(113
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
1,993
|
|
|
$
|
1,579
|
|
|
$
|
2,922
|
|
|
Percent of Net Sales
|
|||||||
Product Category:
|
2017
|
|
2016
|
|
2015
|
|||
Livestock and Pet
|
47
|
%
|
|
46
|
%
|
|
44
|
%
|
Hardware, Tools and Truck
|
22
|
|
|
22
|
|
|
23
|
|
Seasonal, Gift and Toy Products
|
19
|
|
|
19
|
|
|
20
|
|
Clothing and Footwear
|
8
|
|
|
8
|
|
|
8
|
|
Agriculture
|
4
|
|
|
5
|
|
|
5
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Item 9
.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A
.
|
Controls and Procedures
|
Item 9B
.
|
Other Information
|
Item 10
.
|
Directors, Executive Officers and Corporate Governance
|
Plan Category
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options, Warrants, and Rights
|
|
Weighted Average
Exercise Price of
Outstanding Options, Warrants and Rights
|
|
Number of Securities
Remaining Available
for Future Issuance
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
||||
Stock Incentive Plans
|
|
5,221,756
|
|
(a)
|
$
|
65.53
|
|
(b)
|
2,277,812
|
|
Employee Stock Purchase Plan
|
|
—
|
|
|
—
|
|
|
12,010,832
|
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
5,221,756
|
|
|
$
|
65.53
|
|
|
14,288,644
|
|
|
|
TRACTOR SUPPLY COMPANY
|
|
|
|
|
|
Date:
|
February 22, 2018
|
By:
|
/s/ Kurt D. Barton
Senior Vice President – Chief Financial Officer and Treasurer
|
Signature
|
Title
|
|
Date
|
/s/ Kurt D. Barton
Kurt D. Barton
|
Senior Vice President –
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
|
February 22, 2018
|
/s/ Gregory A. Sandfort
Gregory A. Sandfort
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
February 22, 2018
|
/s/ Cynthia T. Jamison
Cynthia T. Jamison
|
Chairman of the Board
|
|
February 22, 2018
|
/s/ Johnston C. Adams
Johnston C. Adams
|
Director
|
|
February 22, 2018
|
/s/ Peter D. Bewley
Peter D. Bewley
|
Director
|
|
February 22, 2018
|
/s/ Thomas A. Kingsbury
Thomas A. Kingsbury
|
Director
|
|
February 22, 2018
|
/s/ Ramkumar Krishnan
Ramkumar Krishnan
|
Director
|
|
February 22, 2018
|
/s/ George MacKenzie
George MacKenzie
|
Director
|
|
February 22, 2018
|
/s/ Edna K. Morris
Edna K. Morris
|
Director
|
|
February 22, 2018
|
/s/ Mark J. Weikel
Mark J. Weikel
|
Director
|
|
February 22, 2018
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25
|
|
|
|
10.26
|
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32
|
|
|
|
10.33*
|
|
|
|
10.34*
|
|
|
|
21*
|
|
|
|
23*
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32*
|
101*
|
The following financial information from our Annual Report on Form 10-K for fiscal
2017
, filed with the SEC on
February 22, 2018
, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets at
December 30, 2017
and
December 31, 2016
, (ii) the Consolidated Statements of Income for the fiscal years ended
December 30, 2017
,
December 31, 2016
, and
December 26, 2015
, (iii) the Consolidated Statements of Comprehensive Income for the fiscal years ended
December 30, 2017
,
December 31, 2016
, and
December 26, 2015
, (iv) the Consolidated Statements of Cash Flows for the fiscal years ended
December 30, 2017
,
December 31, 2016
, and
December 26, 2015
, (v) the Consolidated Statements of Stockholders’ Equity for the fiscal years ended
December 30, 2017
,
December 31, 2016
, and
December 26, 2015
, and (vi) the Notes to Consolidated Financial Statements.
|
Diluted EPS
|
Percentage of Diluted EPS Target Award
Performance Units Earned
|
|
200%
|
|
100%
|
|
50%
|
Total Revenue
|
Percentage of Total Revenue
Target Award
Performance Units Earned
|
|
200%
|
|
100%
|
|
50%
|
Diluted EPS
|
Percentage of Diluted EPS Target Award
Performance Units Earned
|
|
200%
|
|
100%
|
|
50%
|
Total Revenue
|
Percentage of Total Revenue
Target Award
Performance Units Earned
|
|
200%
|
|
100%
|
|
50%
|
Subsidiaries
|
|
Jurisdiction of Organization
|
|
|
|
Tractor Supply Co. of Michigan, LLC
|
|
Michigan
|
Tractor Supply Co. of Texas, LP
|
|
Texas
|
Tractor Supply Company of Utah, LLC
|
|
Delaware
|
Dels Farm Supply, LLC
|
|
Delaware
|
TSC Purchasing LLC
|
|
Delaware
|
TSC Franklin DC, LLC
|
|
Delaware
|
TSC SSC Bond, LLC
|
|
Delaware
|
HomeTown Pet, LLC
|
|
Delaware
|
Petsense, LLC
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Tractor Supply Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 22, 2018
|
/s/ Gregory A. Sandfort
|
|
|
Gregory A. Sandfort
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Tractor Supply Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 22, 2018
|
/s/ Kurt D. Barton
|
|
|
Kurt D. Barton
|
|
|
Senior Vice President - Chief Financial Officer and Treasurer
|
|
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|