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Tractor Supply issues FY'18 guidance with Q4, FY'17 results

Rural lifestyle store operator Tractor Supply Co. issued guidance for fiscal 2018, saying it expects net sales in the range of $7.69 billion to $7.77 billion and net income in the range of $490 million to $515 million during the period ending Dec. 31.

The company issued the guidance while reporting its earnings results for the 13-week fourth quarter period and 52-week full year period, both ended Dec. 30, 2017.

For 2018, the company expects comparable store sales growth to range from 2% to 3% and diluted earnings per share between $3.95 and $4.15. The S&P Capital IQ consensus normalized EPS estimate for the year is $4.11.

The retailer also assumes that its capital expenditures for the coming fiscal year will fall in between $260 million and $300 million. Moreover, given the recently enacted tax legislation, the company's 2018 effective tax rate is expected to decrease to a range of about 23.0% to 23.5% from about 36.7%.

In 2018, the company anticipates balancing investments between new store growth and its digital strategic initiative ONETractor, CEO Greg Sandfort said.

"We believe this balanced strategy positions us well to gain market share as we leverage our physical store assets and our growing digital capabilities. While these investments will partially offset the expected benefit from tax reform, we believe our strategic investments in the customer experience, stores, supply chain and most importantly, our store team members are the right steps to drive long-term sustainable growth and shareholder value," Sandfort said.

For the fourth quarter of 2017, the specialty retailer reported a 1.9% increase in net sales to $1.95 billion from $1.92 billion the previous year period. It also posted a 4% growth in comparable store sales. Its adjusted net income for the quarter reached $114.6 million. The company reported an adjusted diluted EPS of 91 cents for the quarter. The S&P Capital IQ consensus normalized EPS estimate for the quarter was 87 cents.

For full year 2017, Tractor Supply reported a 7% growth in net sales to $7.26 billion from $6.78 billion in 2016 and an adjusted net income of $427.5 million. It also posted a 2.7% increase in comparable store sales, versus the 1.6% it reported in 2016. Its adjusted diluted EPS for fiscal 2017 was at $3.33, while the S&P Capital IQ consensus normalized EPS estimate for the year was $3.30.