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Tractor Supply this week reported a stronger first quarter, driven by private label sales growth.
CEO Greg Sandfort told analysts on a conference call that the company’s private label share of sales reached 30 percent in the first quarter, up from 24 percent penetration in the fourth quarter of 2012.
“Exclusive brands enabled TSC to differentiate our products from that of our competition in both the off-line and online channels, and remains another important area for improving our profitability and customer loyalty,” Sandfort told analysts, according to transcripts from Seeking Alpha.
Sales rose 6.4 percent in the quarter to $1.09 billion, which would put quarterly private label sales at $327 million. At that rate, Tractor Supply would have about $1.3 billion in private label sales, which would put the company between Rite Aid and Whole Foods at 27thon the PLB Top 35.
Tractor Supply has about 1,200 stores in 46 states nationwide, and is the largest retail farm and ranch store chain in the country.
Growth was led by its consumable, usable, and edible part of the business, where its private brands showed strong sales.
“What we saw in the first quarter in exclusive brands, particularly in the C.U.E. categories, we saw a large acceleration,” Sandfort said, according to the Seeking Alpha transcripts. “And as you know, some of those C.U.E. products, whether it's our private brand or our exclusive brand feeds and pet foods and things, don't carry the same margin as some of the products maybe on the left-hand side of the store that are more hardlines driven and such. So we're thrilled with the market share growth that we saw.”
An example of the product’s success was its 4health dog food brand, which added new SKUs in grain-free formulas over the quarter.
“We're very pleased with the initial reception by our customers' purchase of the product,” Sandfort said.