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Tractor Supply Co. CEO Greg Sandfort, talking to analysts for the first time as CEO after taking over for Jim Wright, said Thursday on a conference call that the company rode strong private label sales to a good fourth quarter performance.
Same-store sales rose 4.7 percent in the quarter, and Sandfort said the company’s private label sales accounted for 24 percent of sales, up 150 basis points from a year earlier.
“We continue to see a high level of sales and profit performance from our exclusive brands,” Sandfort said, according to transcripts of the call from Seeking Alpha.
Sandfort said the company was nearly three years into product development and direct sourcing with its private label program, and the company expects to increase its penetration in 2013.
“Our immediate plans are to continue expansion of these exclusive brands through brand extension,” he told analysts. “And because these brands can only be purchased at Tractor Supply, this will ensure Tractor Supply will achieve the product differentiation from other farm store competition and Internet retailers.”
Tractor Supply has about 1,200 stores in 46 states nationwide, the largest retail farm and ranch store chain in the country.
Among the areas singled out in the quarter was pet food.
“Pet food and animal feed continue to generate solid results in the fourth quarter and remain important drivers of repeat footsteps in our stores,” Sandfort said. “As an example, EquiStages, our exclusive brand of equine feed introduced about 10 months ago, continues to perform well within our mix of feed due to number one, brand position, secondly, quality of ingredient and third, the value price proposition it offers it versus the national brand comparative.”
In response to a question, Sandfort detailed some of the brand extension plans for Tractor Supply going forward.
“The team continues to find opportunities within our assortments where we can build and place into the assortment a very competitive product under our own brand that our customers will accept and embrace and they’ll purchase,” he said, according to Seeking Alpha. “And in many cases, it’s not cannibalizing. It’s actually additive to what we have in our assortment because we recognize the gap that … the national brands can’t serve.
“So those businesses continue to grow, and we are developing some sophistication now … almost two years, almost going into three, with our product development side and with our direct sourcing side.”