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Tractor Supply Company (NASDAQ:TSCO)

Q2 2014 Results Earnings Conference Call

July 23, 2014, 05:00 PM ET

Executives

Christine Skold - VP, IR and Strategy

Gregory A. Sandfort - President and CEO

Anthony F. Crudele - EVP, CFO and Treasurer

Lee J. Downing - Executive Vice President of Store Operations

Analysts

Michael Lasser - UBS

Peter Benedict - Robert W. Baird

David Magee - SunTrust Robinson Humphrey

Chuck Cerankosky - Northcoast Research

John Lawrence – Stephens, Inc.

Christopher Horvers - JPMorgan

Scot Ciccarelli - RBC Capital Markets

Seth Basham - Wedbush Morgan Securities

Simeon Gutman - Morgan Stanley & Company

Alan Rifkin - Barclays

Mark Miller - William Blair & Company

Adam Sindler - Deutsche Bank

Aram Rubinson - Wolfe Research, LLC

Jon Berg - Piper Jaffray

Eric Bosshard - Cleveland Research

Joseph Feldman - Telsey Advisory Group

Operator

Good afternoon, ladies and gentlemen and welcome to the Tractor Supply Company's conference call to discuss Second Quarter 2014 results. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Please note that each participant will be permitted to ask to ask one question with one follow-up. Please be advised that reproduction of this call, in whole or in part, is not permitted without written authorization of Tractor Supply Company. And as a reminder this call is being recorded.

I would now like to introduce your host for today's call, Ms. Christine Skold, Vice President, Investor Relations and Strategy of Tractor Supply Company. Christine please go ahead.

Christine Skold

Thank you, operator. Good afternoon and thank you for joining us for Tractor Supply Company's quarterly earnings conference call.

Before we begin let me reference the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. This call may contain forward-looking statements that are subject to significant risks and uncertainties, including the future operating and financial performance of the company. Although the company believes the expectations reflected in its forward-looking statements are reasonable it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in the company's filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed. Investors should not assume that statements will remain operative at a later time. Lastly Tractor Supply Company undertakes no obligation to update any information discussed in this call.

I am now pleased to introduce Greg Sandfort, Tractor Supply Company's President and Chief Executive Officer. Greg, please go ahead.

Gregory A. Sandfort

Hey, good afternoon, everyone, and thank you for joining us today for our second quarter earnings call. With me today are Tony Crudele, our EVP and CFO; Lee Downing, our EVP of Store Operations and Real Estate; and Steve Barbarick, EVP of Merchandising and Marketing is out of town today attending a trade show so he will not be with us.

Now although the second quarter did not fully live up to our expectations I am pleased with how our team reacted and managed the business. Weather is always going to play some role in our business results and it is our job to manage successfully to all those types of external factors. What we faced in the second quarter of this year was different than previous years and I believe we reacted accordingly.

Now heading into the second quarter we anticipated that the quarter would start slow based on the cool weather patterns and late start to the spring selling season. Based on years past we expected that weather patterns would begin to normalize in May and we would see a spike in the spring seasonal business mid quarter. However that pattern did not hold true this year particularly in our northern markets where the weather turned warmer much later than normal. Instead of a spike we saw a much more gradual build in the seasonal business throughout the quarter. We reacted midway through the quarter by enhancing a few remaining key promotional events focusing on things that would drive sales and traffic while maintaining the integrity of our everyday value pricing model.

These promotions included the advancement of our 4th of July circular by one week, a second and more timely demo days sell event for the northern regions and an improved targeted distribution of our remaining circulars and direct mails. These actions resulted in improved redemption rates and while this had a modest impact on our overall margins in the quarter it did drive sales of seasonal categories midway through the quarter.

As weather became less of a factor in the northern markets we noticed a return to more normal sales trends. The momentum continued as the quarter progressed but again this was much more gradual than years past. June sales were strong and that strength has carried over into the first few weeks of July. This has given us confidence that the weaker sales trends in the first half of the year were in fact weather related while our underlying fundamental traffic and core businesses remained healthy with sales that were lost early in the second quarter and as such we adjusted our full year outlook in our business update just two weeks ago.

Tony will review the financials of the quarter in more detail but let me give you a few highlights. Comparable transaction count increased 2.3% making this our 25th consecutive quarter of positive comp transaction count. Comparable store sales were positive in each of the three months with the second half of the quarter above our expectations and the first half below our expectations. Regionally comparable store sales in the south significantly outperformed comparable sales in the north and not all spring seasonal sales products performed the same. We observed strength in grass seed, live goods, fencing and riding lawn mowers and in riding lawn movers it's been several years since we've seen a positive year-over-year sales comparison in that category.

But on the flip side we saw weakness in the outdoor power equipment such as tillers and chain saws as well as we saw weakness in accessories for mowers, trimmers and in the safe category. So for the quarter we made a number of inventory investments in key categories early on and we were pleased with how these categories performed. And we know that when we support product category from both a merchandizing and branding perspective and we place the inventory we typically do well and drive those sales that were re-targeted in those categories. For example our garden event, another big success again this year and that benefited from further investments in that category in both live goods and core products.

So while the early part of the quarter was not fully inline with our expectations we were pleased with the way it ended and the way that we managed the seasonal business and the underlying strength in our core business throughout the quarter.

I'll now turn the call over to Tony for a more detailed review of the financials after which I will offer a few closing comments and forward look on the second half of the year.

Anthony F. Crudele

Thanks Greg and good afternoon everyone. For the quarter ended June 28, 2014 on a year-over-year basis net sales increased 8.8% to $1.58 billion and net income grew by approximately 8% to $133.4 million and $0.95 per diluted share. Comparable store sales increased 1.9% for the second quarter compared to last year's increase of 7.2%. As Greg discussed the seasonal side of the quarter got off to a slow start as a result of the cold weather that continued further into May and in the prior year. Sales did not start to rebound until halfway through the quarter as spring finally broke and the build was much more gradual than last year. This was especially the case with our northern stores.

Sales were consistent with our plan in the back half of the quarter at June posted a solid comp and was the strongest comp month in the quarter. Comparable store sales were driven by continued strength of consumable, usable and edible products, our C.U.E. items and healthy traffic counts. Comp transaction count increased from the 25th consecutive quarter, gained 2.3% on top of a 4.8% increase last year. Certain spring categories performed very well such as live good grass seeds and fencing. These favorable trends were partially offset by weaker than expected sales of other seasonal categories in the North and continued declines in our safe category resulting from difficult comparisons from a year ago.

Average comp ticket decreased by 30 basis points compared to last year's 2.3% increase. The decrease resulted principally from deflation of 100 basis points. An increase in items per transaction and favorable mix impact partially offset the negative impact of deflation.

The impact of big ticket was slightly negative as the increases we saw in the [inaudible] were more than offset by the declines in the safe category. A few key points about the quarter. As Greg mentioned, although we have seen solid comp sales performance in our spring seasonal categories in June and the first three weeks of July it is difficult to assess whether we will recapture all the lost sales resulting from the late spring. If you recall last year's third quarter benefited from a late and extended spring and summer selling season. Although the general pattern is similar to last year the build of the seasonal business has been more gradual this year and we do not know how this trend will progress. So while we are pleased with the comp performance so far in Q3 we do face difficult comparisons in the third quarter particularly in July and August when comps increase close to double-digits last year.

On a regional basis, our warmer southern regions outperformed our cooler northern regions as the southern regions were the least impacted by the delayed spring weather. All three months had positive comp sales with June tracking at our internal comp target.

Although big-ticket items as a group had a positive comp for the quarter, it was still a slight headwind to average ticket. Since the big ticket comp percent was less than chain average and the big ticket sales were a smaller mix of total sales from the softness in the safe category it had a slight negative impact on average ticket.

Deflation was approximately 100 basis points which is slightly higher than we expected. Last year's second quarter had approximately 140 basis points of inflation making the year-over-year swing 240 basis points.

Turning now to gross margin, which as a percentage of sales was flat to prior year at 34.8%. Our initial direct margin improved as a result of our initiatives around price optimization, markdown management and strategic sourcing. Import purchases in the quarter increased 8.1% and represented 11.5% of the sales mix. Also exclusive brand sales increased 9.4% compared to last year's Q2 and were almost 30.7% of sales. Deflation was the most significant favorable factor impacting margin as we focused on maintaining margin dollars per unit that typically will result in an improvement in gross margin rate in deflationary periods.

Offsetting the benefits from deflation and our margin enhancing initiatives was merchandise mix which we estimate had a negative impact of approximately 13 basis points. This was primarily related to the rider category that has a lower than average margin and had a solid year-over-year increases, and the softness in several of the seasonal categories that carry above chain average margin. The softness in seasonal sales also resulted in C.U.E. being a higher mix of sales for the quarter which in aggregate carry a lower than average margin.

Freight increased approximately 14 basis points as we had increased transportation rates related to inbound truck capacity and availability as well as an increase in store stem miles to the new western store base. Additionally the freight rate will increase as a percentage relative to sales and cost of goods in a deflationary period. The enhanced sales driving events during the quarter that Greg referred to also modestly impacted margin.

For the quarter SG&A including depreciation and amortization was 21.5% of sales, an increase of 27 basis points over the prior year quarter. Although we managed SG&A dollars well, we still de-levered as result of the short fall in sales. We knew that some of the investments we put in place in the second half of 2013 would make it difficult to leverage SG&A in the second quarter and this was exaggerated by the limited comp sales increase. We began to anniversary some of these investments in the back half of this year, for example we will cycle the added expense of the relocation of the Southeast distribution center and the relocation of our data center in the second half of 2014.

The largest variance was employee benefits where medical cost and workers' comp expense have been running higher than plan. Incentive compensation was favorable and offset a significant portion of the deleverage. Our effective income tax rate decreased to 36.7% in Q2 compared to 37.4% last year. The decrease was due principally to the timing of recognition of state and federal income tax credits.

Turning to the balance sheet, at the end of Q2 this year and last year we had a cash balance of $36 million and no outstanding debt. During the second quarter under our stock repurchase program we acquired approximately 961,000 shares for $62.5 million. We estimate that the share repurchase program did not have a material impact on EPS for the quarter.

Average inventory levels per store at quarter end were 3.4% lower than last year, while annualized inventory turns increased by three basis points for the quarter. We are pleased with the productivity of the inventory during the quarter as the team did an excellent job flowing early spring orders as sales demand warranted and managed seasonal inventories throughout the quarter. Overall we do not anticipate any markdown exposure in Q3 outside of our normal clearance activity.

Capital expenditures for the quarter were $40.2 million, compared to $49.3 million last year. We opened 23 stores this quarter compared to 26 stores in the second quarter of 2013. The decrease in capital expenditure relates to expenditures for the construction of our Southeast distribution center last year.

Turning our attention to full year outlook, based on the second quarter results the company believes its fiscal year 2014 results will be at the low end of the previous provided ranges which were net sales of $5.62 billion to $5.7 billion, comparable store sales of 2.5% to 4% and net income of $2.54 to $2.62 per diluted share.

We have reduced our estimated range for capital expenditures by $20 million to $220 million to $230 million. The new store pipeline is tracking to our full year goal of 102 to 106 new stores. Based on the volume of our share repurchase year-to-date we are also adjusting our estimate for full year diluted shares outstanding to approximately 140 million.

We now expect deflation to be higher than originally anticipated for the back half of the year as corn prices which is a directional indicator continue to remain low. We are now estimating deflation to range between 50 and 100 basis points in the second half with the third quarter being closer to the high end and moderating slightly down in the fourth quarter.

The safe category will continue to be headwind but the merchant team has put together a solid plan to drive total sales in the back half of the year. We expect gross margin to be flat to slightly in the second-half of the year. The fourth quarter will be tougher comparison in the back half as strong seasonal sell through last year minimized markdowns. We will continue to have freight and mix headwinds that will offset some of the benefits of our key gross margin initiatives.

With respect to SG&A, our store support center consolidation into our new campus is on budget and on time and will be completed before the end of the third quarter. The anticipated lease termination and transition cost will be incurred and expensed in the third quarter which we estimate to be $0.01 to $0.015 per diluted share.

We have a very focused plan to manage SG&A expense in the back half of the year and we expect to leverage SG&A in the back half principally in the fourth quarter, as we begin to cycle the investments made in the back half of last year. We expect SG&A leverage to be closer to flat in Q3 as a result of the store support center transition cost I just mentioned.

We forecast that our effective tax rate for the full year will be approximately 36.9% compared to our previous guidance of 37%. To conclude our core business remains strong. We saw seasonal sales accelerated as the weather warmed and we managed the inventory properly positioning to try to supply for a healthy summer selling season.

So now I’d like to turn the call back over to Greg.

Gregory A. Sandfort

Thank you, Tony. Looking forward to the second half of 2014 we are focused on driving sales and operating margin growth for the full year. Last year the spring and summer selling season extended well into the third quarter and we benefited from having inventory in the right mix of seasonal products.

Our success in third quarter last year presents us with a challenging comparison this year but nevertheless we feel we are well prepared given how well we ended the second quarter with inventory and how we have successfully transitioned our assortments toward fall. In the second half of the year we have several merchandising initiatives which we are excited about including a number of direct mail campaigns, looking at a target distribution of our circulars and numerous in-store events focused on driving more footsteps into our stores.

While we will selectively sprinkle in a few individual store level efforts we are diligent in maintaining our everyday value pricing model. We also have our seasonal center court that I should mention where we also introduce new products that also support our customer’s lifestyle and drive business.

So in closing I’d like to thank our dedicated team members in the field distribution centers and here at the store support center for all the hard work and dedication to our company and our shareholders and the investment community for your continued support. We feel comfortable about the underlying trends and fundamentals of our business but we recognize that we need to continuously raise the bar on execution to address the external business conditions that can change and have changed around us.

We appreciate your time today. And we will now open the call for your questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instruction). And we will take our first quarter from Michael Lasser.

Michael Lasser - UBS

Thanks for taking my question. I was hoping to dig a little bit further into the gross margin. The last quarter you got about a 100 basis points of gross margin expansion, it sounds like largely from the deflation element of your retail prices adjusting a little bit more slowly than the wholesale prices. You laid out some factors that restrained that in the quarter like 13 basis points of mix, 14 basis points from freight, you didn’t call out promotions but you made sound like it was slightly less than that amount that would add up to around 40 to 45 basis points. So was there just less of a benefit from the deflation in the second quarter than there was in the first quarter or was there something else going on?

Anthony F. Crudele

No, Mike I think I summarized it. The deflation was a little bit less of an impact although it clearly was the largest and then we did benefit from our price optimization and exclusive brands initiatives. So but between clearance which you are correct, it was -- it is relatively modest it was definitely less than 10 basis points and mix and promotion really were the drivers. And when it came to mix, like I had mentioned earlier you had riding lawn mowers which tend to be well below chain average, you also then we were very light in some category that generally are above chain average, some of the key spring categories. So that was the key part of the mix impact and then as consumables continued to increase as a percentage of sales that also caused the mix to be to have an impact. But other than that there was nothing significant relative to the margin.

Michael Lasser - UBS

Okay. And the commentary about the promotions that you laid our during the quarter was very useful and it sounds like you could continue to follow some of that, those tactics, continue to use those tactics moving forward. Is there something that has changed about the customer or are you just digging into customers that are more expensive to attract and that’s why you are having to run the promotions, is there anything different about the competitive environment? And then does that influence your thinking about the long run margin outlook for the business where you have consistently got to do 25 basis points or so of expansion but have quite better than that. Thank you very much.

Gregory A. Sandfort

Michael this is Greg. First of all there is nothing significant that we can see that changed with our customer. They are still being conservative, they are still buying very close to need. What I think we saw was demand shifted later and as demand shifts later a lot of these customer say you know maybe I don’t need to make that investment in x, y and z we clearly saw them not interested this year in some of the outdoor products that in years past that they have performed very well and by the way those are higher margin products that we count on in our second quarter mix. So that’s the first thing. And I think we saw them pull back a little bit from what I’ll discretionary spending on some things.

I don’t think there is any competitive pressures that we can see, that have caused any issues. So I would say to that, no haven’t seen anything and I think in general our consumer will look at forward purchasing a little differently. We are already starting to see a good indication on some early reads and early sell-throughs on fall products in certain categories in our business but I won't get specifics from a competitive standpoint, but that is a very strong indication that they are looking forward, aren’t looking back and that's really what we need from them right now.

Michael Lasser - UBS

Okay, that's very helpful. Thanks again.

Operator

And we will take our next question from Peter Benedict with Robert W. Baird

Peter Benedict - Robert W. Baird

Hi guys. Thanks for taking the question. I guess following up on that a little bit, the inventory looked very well managed in the quarter. Does that limit your ability to capitalize on any extended spring selling season in Q3? And is that why maybe you're being a bit cautious on that or Greg maybe just a comment you just made that your customers are kind of looking forward?

Gregory A. Sandfort

Peter, two things. In some categories like some outdoor power equipment there will be a limited availability because either there is model change over or those manufacturing facilities have already moved on to making snow blowers and other type of winter products. So yeah, there will be some limit to that but we're able to grab some inventory before some of those conversions occurred. So I think we're sitting what we want to be with inventory and we think we can maximize what's left to the season.

Again I think the customers, what we’ve seen initial here is that they’re already looking forward which is a good thing but they're still buying to need. And in some of our regions where we have lot of moisture and heat, some of outdoor park equipment categories have been just extraordinarily strong.

And we're basically feeding that business day to day. So mix of things going on right now. Good look at fall forward as well as still trying to capture some of those lost sales from spring.

Peter Benedict - Robert W. Baird

Okay, fair enough. So my second question is just on the freight headwind that we saw in the quarter, I mean clearly the Western extension is expected to be a freight headwind here but I guess the in-bound capacity issue would seem somewhat new. So maybe you guys can talk a little bit about that and then whether you expect that persist going forward? Thank you.

Anthony F. Crudele

Peter, Tony when it comes to the inbound freight rate there has been a lot of conversion about some of these incremental costs as far as the truck and availability, driver availability that has increased our cost. We do expect to have going forward and we have taken that in consideration in our forecast.

It is somewhat impactful. It does add some basis points to the freight in the impact. But again we believe that we can manage that to that end have included it in our forecast in back half.

Peter Benedict - Robert W. Baird

Okay, and then I guess just looking at the back half our gross margin kind of as you had said, kind of flattish to down a little bit in second half and I think you are clearly expecting the fourth quarter to be down given the comparison. Do you also expect that the third quarter gross margin to be down or you think it’s going to be flat, just any color around that given what you're seeing so far? Thank you.

Anthony F. Crudele

As we look at the third quarter, we think that the gross profit is going to probably be more in the flattish range. We think that there is obviously more upside in Q3 than in Q4 because we did have such strong sell-through in the fourth quarter.

If we can continue to get good spring summer sell-through on some of the higher-margin goods there some potential upside there as well. But again just overall we try to stay away from the specific quarter guidance and try to keep it generic to the back half but we believe that there is a little bit more upside to Q3 than there is to Q4 when it comes to gross margin.

Peter Benedict - Robert W. Baird

Yeah, understood. Thank you.

Operator

And we will take our next question from David Magee with SunTrust.

David Magee - SunTrust Robinson Humphrey

Hi. Good afternoon guys.

Gregory A. Sandfort

Good afternoon.

David Magee - SunTrust Robinson Humphrey

You may have said this and I may have missed it but the new store productivity we’re getting around 75%, is that sound about right?

Gregory A. Sandfort

That's correct, yes.

David Magee - SunTrust Robinson Humphrey

And that number is sort of the higher end of the range that you’ve seen overtime, is there something that you're doing differently with these class of stores that's producing a better number?

Gregory A. Sandfort

There is clearly a lot more research that's going to on before we open these stores because we're going to into new regions David and we’ve spent time out there with the customer base, and our teams here at the store support center with our field people they are replacing out there. So much more focus on understand the consumer before we are out there opening more stores.

The second thing and I’ve mentioned this before, we have a team of people here at the store support center that with any new store that opens in its first 12 months of its life there is bit of a, I’ll call it a babysitting period where they really work very closely with that individual store understanding differences and needs, whether it be floor product, depth of product some change outs and planograms maybe some products that we need to introduce in the store because the customer demands so on and so forth.

So we spend that first 12 months with that new store trying to get that assortment and that new store positioned in that market before we turn it over and put into the run rate of the normal the rest of the company. So it’s a unique process. It takes time, it takes people but it’s paid big dividends for us.

David Magee - SunTrust Robinson Humphrey

Thanks Greg.

Anthony F. Crudele

David, just to also clarify on that, as we move west the mix of the store is going to be a little larger. So it’s a larger volume store.

David Magee - SunTrust Robinson Humphrey

Okay.

Anthony F. Crudele

So I should say you see that in a number of sort of increasing as a percentage of sales, total sales of the company or average store. Some of it is just due to the mix of the stores that we are opening.

David Magee - SunTrust Robinson Humphrey

Thank Tony. And the secondly you mentioned you got a good book or some look in to the fall product demand and it’s favorable. What products in particular are you looking at to see that?

Gregory A. Sandfort

Well, Dave unfortunately I can’t tell you which categories because from a competitive standpoint, but there are four that are key to our business just as there are three or four to the spring season and there are great indicators of forward look or forward trend and what I can tell with great confidence is we have started off with very, very positive trends and we expect those will continue.

David Magee - SunTrust Robinson Humphrey

Great, thanks and good luck.

Gregory A. Sandfort

Thank you.

Operator

And we will take our next question from Chuck Cerankosky with Northcoast Research.

Chuck Cerankosky - Northcoast Research

Good afternoon everyone.

Gregory A. Sandfort

Good afternoon Chuck.

Chuck Cerankosky - Northcoast Research

Just want to reflect back on the North-South spilt a little bit. Can you comment on how that looked among the new stores you opened, the cold versus the warm area?

Gregory A. Sandfort

Had lower warm than we had cold, that’s for sure.

Chuck Cerankosky - Northcoast Research

Yeah.

Anthony F. Crudele

You know Chuck, the newer stores as we grow in the Southwest are obviously going to be warm weather and as we had indicated earlier the southern stores did produce better than northern stores from a sales perspective. So for the most part we felt very good about the new stores and again they were specifically more in the south and obviously had a better opportunity to perform well during this delayed spring.

Chuck Cerankosky - Northcoast Research

All right, that makes sense. Thank you.

Operator

And we will take our next question from John Lawrence with Stephens.

John Lawrence – Stephens, Inc.

Good morning guys.

Gregory A. Sandfort

Good morning, John.

John Lawrence – Stephens, Inc.

Greg to follow that on the divergence between the north and the south, I mean was that the biggest spread and the largest spread between those regions you have seen in some time as far as that say April and May and part of June performance?

Gregory A. Sandfort

Yes it was. Lee you want talk to that?

Lee J. Downing

I think, John, the different in the north-south typically over the last I’d few quarters we have been relatively consistent across all regions but I think we, this time we saw we saw quite differentiation in particular with the northeast in kind of the Mid-Atlantic areas that they did not perform up to the area.

John Lawrence – Stephens, Inc.

And is it fair to say Greg your comments on some of the forward-looking, is it fair to say that those lines have converged and when weather is sort of a parity in both places that they look a lot similar going forward?

Gregory A. Sandfort

That is correct. And I will say that it echoing what Lee said, you know we still are seeing very consistent traffic and what happened really in the North versus the South was the mix in the basket was so different from a year ago and as the weather is warm in both locations now both parts of the country we are seeing very similar selling patterns, but we are also seeing a nice movement forward in business across the country. So very happy with that so far.

John Lawrence – Stephens, Inc.

Well, thanks, good luck.

Gregory A. Sandfort

Thank you.

Operator

And then we will take our next question from Chris Horvers of JPMorgan.

Christopher Horvers - JPMorgan

Thanks, good evening.

Gregory A. Sandfort

Good evening Chris.

Christopher Horvers - JPMorgan

As you talk about, as you think about really the first seven months of the year it would encouraged us to look at the business in terms of halfs and maybe including the July date is the right way to look at -- what do you think the core underlying trend in the business is, you had some early help from the cold and then it hurt you and then you had this delayed spring but now it seems to be helping you. So what's the right underlying trend in the business?

Gregory A. Sandfort

Well, let me, kind of bracket it for you. The first thing is there have been some comments about volatility but it's really not volatility. This is really I think we can give some great examples of how consistent some things are and the underlying components of the business. Number one, comp store traffic counts, they remain strong. They were very consistent and that's an underlying piece of the core business that the customers are still coming in and making purchases into and other products in store. Second thing the basket, the basket changed quite a bit in the first quarter this year versus a year ago and as the demand increased based upon the warmth of the weather and I hate to use weather but weather did have an impact, it then started to affect how the mix of basket and sales of products were from the stores. So the north and the south look very different in sales for the first five, six months.

This was probably some of the most extreme weather, honestly we've ever seen at least for the time I have been with the company. So we dealt with it but it was clearly a shifting of product mix and demand from consumer of certain products based upon the fact that you get out and either in the yards, work in the gardens, do work outside in general. So underlying it's good. Now deflation had some impact, no question. Deflation played a role but I think generally speaking demand shifted later in the north and the upper mid-west and that we saw pretty normalized business in more mid-west than south.

Christopher Horvers - JPMorgan

And then as you think about the feed and food category aspects I guess maybe for -- on a unit basis. Is that -- has the growth in that business moderated, has there been much change there? I think some of the dog category it seems like there is some consternation out there on the dog category. But overall as you think about dog and horse has the food and feed category been pretty good for you?

Gregory A. Sandfort

I can tell you that our unit counts were up in both categories. So we are continuing to take market share.

Christopher Horvers - JPMorgan

Okay. And then, perfect. In the July commentary is it fair to say that July is an unassisted comp and some of the questions focusing on the promotional level here, I think people -- investors were trying to understand that you are driving the business or being forced to drive the business through promotions. Is the July commentary about trend largely in unassisted or unpromoted.

Gregory A. Sandfort

Yes, Chris, July is a return to more normal but we would expect it would be the performance of tractor supply as we known it. Yeah, we did nothing to further assist the business this is just a good solid trend of business that honestly just came later.

Christopher Horvers - JPMorgan

Perfect. Thanks very much.

Gregory A. Sandfort

Thank you.

Operator

And we will take our next question from Scot Ciccarelli with RBC Capital Markets.

Scot Ciccarelli - RBC Capital Markets

Hi guys. I guess everyone’s kind of talking around it but can you give us an idea for how big the difference was between the south and northeast and whether is a range or some other way to think about it?

Gregory A. Sandfort

Yeah. I think when you look at it, I guess we can give you some range but what's interesting is that as we progressed in the quarter, we did start to see the north come back. So as much as we feel that there was little bit of some lost sales there, it did start to moderate some. So when you look across the chain and if you look at it from a full year basis actually the northeast came back very nicely. When you look at some of the range, it's probably somewhere between 300 to 400 basis points of swing between north and the south far as the performance of those regions, when it comes to sort of the spring categories.

Scot Ciccarelli - RBC Capital Markets

Got you, that's very helpful. And then I don't know how you really answer that, I mean Greg you kind of talked about, you didn't really see a change in consumer behavior but obviously there are some people out there thinking that there are significant deflationary forces on some of your core customers with corn et cetera. So maybe if you can just give us some of your thoughts on if that could have some sort of impact on your overall customer base or what's the right way for investors to kind of think about that as a potential impact on the business? Thanks.

Gregory A. Sandfort

Well the first thing I would say is that what gives us comfort is the fact that we were having consistent growth in our transaction count at the store. So our customer base continuous to shop with us and it continuous to grow. I would tell you that in many of the products we sell, corn is a very small component. However it’s a good indicator of what can happen with the rest of grains and other mixtures and products in feed and food.

We have not seen any shift downward in quality of the product that the customer is buying or them buying any less of and we saw that back in the earlier part of the recession if you remember you have been following the company back in ’08 we saw customers trading down into lower price feeds and foods, we are not seeing that at all, not seeing at all. As a matter of fact many customers, I think are seeing great value and understanding that, that a better quality feed or food is better for animals. So no indications of that there were some challenges, no question.

In the early part of the year with weather and being able to run trucks and get product to stores but that was past us so the second quarter really was more of, it was circled around the demand for other seasonal products and the C.U.E. categories are performing very well, we are very pleased with those and we believe because of that traffic count and the unit increases that business is solid.

Scot Ciccarelli - RBC Capital Markets

That’s very helpful. Thanks guys.

Anthony F. Crudele

This is Tony. We have done some analysis in sort of the more rural areas where we would expect the farm income to have an impact and we have not seen any large disparities relative to the performance of the stores in those areas.

Scot Ciccarelli - RBC Capital Markets

Got you, all very helpful. Thanks, guys.

Operator

And we will take our next question from Seth Basham with Wedbush Securities.

Seth Basham - Wedbush Morgan Securities

Hi, there.

Gregory A. Sandfort

Hi.

Seth Basham - Wedbush Morgan Securities

Our question really around the consumer and I am trying to understand your concern little bit better. On the one hand you are talking about strength in some big ticket discretionary categories like riding lawn mowers and on the other hand you are talking about more limited behavior or sales in other high margin discretionary things in the spring. How do you juxtapose those things and what do you think the consumer is really thinking right now?

Gregory A. Sandfort

This is Greg. I think it’s a simple answer. Some of those what I call discretionary purchases are more ornamental and decorative types things and there is a life to those. Typically you buy them early, you kind of use them and they transition from year-to-year. Our customers typically shop on need, so I think because of the delay and their ability to use some of those products, particularly some of outdoor products they may have made some decision to say no I am going to continue to support the things I need and I am going to move on and I’ll look forward to next season.

And what we did was when we start seeing that trend we started to moderate our inventory levels in those categories and manage ourselves to a successful conclusion. So I don’t think that’s anything unusual particularly given how late the season developed.

Seth Basham - Wedbush Morgan Securities

Got it, that’s helpful. And then secondly, as you think about the gross margin outlook being a little bit limited going forward, are you guys changing your cost control measures to offset that in anyway?

Gregory A. Sandfort

Seth, we have a hard look at the back half and we believe we have a very focused approach around SG&A and that’s why we have adjusted our outlook relative to the SG&A where we believe that we can drive some leverage from SG&A in the back half for the year.

Seth Basham - Wedbush Morgan Securities

Anything specific that you can point to?

Gregory A. Sandfort

Well, obviously there is some discretionary spend. There is also some initiatives that we’ve been able to manage more efficiently and some that we discontinued to make sure that we don’t spend ahead of the benefits that we receive from some of the key initiatives and we had been able to manage some of the CapEx spend as well around those projects. So we believe that those are few things that we have done relative to drive some expenses and obviously we are always looking at things like managing labor and some of the key occupancy expenses when it comes to repairs and maintenance but at the same time we want to make sure that we take care of our store base.

So it’s a balancing act but we really feel that as we move into the back half the plan that we put together we can achieve some SG&A leverage.

Seth Basham - Wedbush Morgan Securities

Got it, thank you.

Operator

And we will take our next question from Simeon Gutman with Morgan Stanley.

Simeon Gutman - Morgan Stanley & Company

Hi, good afternoon.

Gregory A. Sandfort

Good afternoon.

Simeon Gutman - Morgan Stanley & Company

Can you talk about if you can estimate the magnitude of the comp lift or the sale lift that promotions drove the business and then if I interpreted it right, the promotional levels were they similar to cadence of sales growth meaning the promotions were let's say more prevalent in the month of June versus the other months of the quarter?

Gregory A. Sandfort

Simeon, this is Greg. I would say two things on that. One is, it was moderate as far as impact on sales and moderate impact on margin, so minimum. What we already had as weather started to change we happened to be, I think in the right place at the right time with some of the promotions we had already put into play. And for example by shifting the July fourth piece up a week that just gave us a little bit of more time to understand where is the customer on some of these products

It typically all you are doing is shifting the business typically earlier sometimes versus extending it out but we tried that to see if we get any kind of comp increase out of it. So it had some effect not a large degree of effect. We're already starting to see some turning of the business in the positive direction and the comps as Tony mentioned were significantly better in June and it continued into July. And July has been a month where we’ve changed nothing. It's been exactly the same and we didn't do anything really significant in the month of June, nothing like going out and dropping another piece of circular or circulation for two to three main customers which would be a normal drop for us. We didn't do that.

This was more local store type event, something we can do from inside the store. And I leave with that.

Simeon Gutman - Morgan Stanley & Company

Okay. And then on the feed business you mentioned your units in dog or one of the categories was up, you were probably taking share, can you talk about where you think that's coming from? Is it the same customer who is buying large animal feed, are you pulling from more of suburban market, so maybe from the strip center customer, where that coming from or is there also and is the private label or your private offering within that growing faster than the brands?

Gregory A. Sandfort

I can't tell you exactly what's going to come, Simeon. I wish I knew. We do our best to try to track that. I think in general, our pricing structure, our in-stock levels and our offering and mix tends to drive customers to our stores.

We are seeing nice growth, continued growth in our own exclusive brands. That's a range for people to come to our store, you can only buy those at Tractor. So I think this has been something we’ve seen for a while and we see it continuing as we increase the depth and breadth of those assortments in our stores.

Simeon Gutman - Morgan Stanley

Okay, thanks.

Operator

(Operator Instructions). We'll take our next question from Alan Rifkin with Barclays. Go ahead.

Alan Rifkin - Barclays

Thank you very much. Greg, understanding the perishability components of your commodity side of the business, is there anything at all that can be done by you guys on a proactive basis to try to take advantage or somehow not be as susceptible to the declining prices in commodities be it slowing your turns or anything?

Gregory A. Sandfort

Well, a couple of things we have there. We made some significant investments in inventory that we would forecast with our suppliers but we don't buy -- we're not buying the commodity type products, when out there. And the fact that we've been able to build exclusive brands in our company and that's a base of business that we can control from a slow margin and exclusivity standpoint helps us but I’m not in the futures business, don't plan to be. And I think we do a fine job today working that inventory and turning that inventory. We're not having out of stock issues. What we're having more of is trying to look at what's the next level of business in some of our exclusive brands more so than even some of the national brands on occasion.

So it's a good mix, and it's good healthy mix. We need both.

Alan Rifkin - Barclays

Okay. I mean you said on more than one occasion that the buildup was more gradual than what you anticipated. I mean what do you think is really behind that? Is it a macro issue?

Gregory A. Sandfort

I think -- we are convince now looking on how the business developed, it was primarily weather because as things normalized, when weather normalized business was back to like I said the typical what we would call Tractor Supply performance. So I don't like to use weather as any type of issue but it clearly was driven primarily North and the Coastal side of the Midwest. And that area of the country just didn’t respond until the weather actually warmed and once it did business normalized. So and we are clearly convinced it was the weather.

Alan Rifkin - Barclays

Okay. And one more question if I may. I know it’s been asked ten different ways but with respect to the weather I mean besides the north, did you hit your plan in all other areas whatever that plan maybe?

Gregory A. Sandfort

When you say hit the plan do you mean sales in other regions?

Alan Rifkin - Barclays

Yeah.

Gregory A. Sandfort

The answer to that would be yes we did. We actually accelerated in a number of regions beyond plan so significant weakness in the north and in the Mid-Atlantic, significant strength in other parts of the country.

Alan Rifkin - Barclays

Okay, got you. Thank you very much.

Operator

And we will take our next question from Mark Miller with William Blair.

Mark Miller - William Blair & Company

Hi, good afternoon. Seems like one of the swing fact, the gross margin near term would be some of these spring seasonal categories that you talked about and you highlighted the importance of three or four, going forward, three or four looking back. Could you give little more perspective on what some of the three-four spring categories that you are hoping to see good call through late in the season?

Gregory A. Sandfort

Well one of the categories is the riding lawn motor business. It’s been exceptional this year and we don’t know if it’s because honestly the season just developed late and equipment from last year were up or it’s we are going to just -- advantage just likely we have, we have inventory in quality products and maybe people will compete with a sell-through, things like suppliers and chemicals those are business that typically start early in the season and when they came later as they have this year I’ll give an example, we are talking -- we are hearing that cutting of hay this year there is probably still two cuttings left. Well at this time a year ago there would have maybe one.

The twine business is extremely strong and why is that? Well there forecasted more cutting and things so, there is some unusual things year-to-year either happening but they are delayed and are still coming so, you know our biggest challenge right now is managing trying to gain the maximum return on the inventory we have in those categories and then also transitioning to fall and then I said earlier we are very pleased with we are seeing in some of the early indications of the some of the fall sets in some of the northern region and so you know I feel quite good right now about the mixes inventory how things are selling through but is unusual, this is not a typical year that we wouldn’t be seeing some of the selling of some of these products this late in the season.

Mark Miller - William Blair & Company

Great, that’s helpful. And then something apart from the weather, on the import purchases up around high single-digit in the first-half. That had been growing a little bit faster than total sales in the past. So I guess can you kind of give us a sense for what is your current outlook for higher penetration of import which are the categories again are you really focusing on and if you think that will star accelerating again or you’re kind of getting closer to where the business can go? Thanks.

Gregory A. Sandfort

Mark I have always stated that there is no set numbers for us as far as a target but it will shift between you know seasons this year and we did pull back a little bit on some, I’ll call it import products in the outdoor category and I think it was a good move on merchants’ part because it was a category unfortunately that was soft this year. It wasn’t because of the inventory because the customer just decided that that income was going somewhere else.

We still see growth, we still see the machine behind our product development and sourcing piece of the company growing. I still think that we will see, I don’t know it could 300, 400, 500 basis points of more growth as we get into end of the year and in to next year still so there is no slowing of that conversion but I don’t have a target number to give you. I think it would be wrong to say because it’s a totally different mix between the parts of the business, some piece is a higher percentage others low so look for you know continued improvements and increases in the mix.

Mark Miller - William Blair & Company

That’s helpful, great. Thanks.

Operator

And we will take our next question from Adam Sindler with Deutsche Bank.

Adam Sindler - Deutsche Bank

Yes, good afternoon guys, thank you. So two questions one, sorry both on weather. One, if you remind us what an extended season mean for you guys specifically what it about the weather last year that helped drive double-digit comps in July and August? And then as it relates to the commentary on fall, just wondering if that was concentrated in sort of the Ohio, Michigan, Western New York Pennsylvania areas which did see for whatever reason a very late hold of Vortex over the last couple of weeks the temperatures dropping very well below average just to make sure we're not getting sort of a false lead on that?

Gregory A. Sandfort

Let me address your last piece, there is no false read here. What you got is our consumers last year honestly were caught a little short on a number of categories of products because we had a very what I would gracious long winter. So what we typically have seen in the history of our company is when that happens they start to buy earlier for the next year in an effort not to get caught short and in an effort to make sure that they will start on product. So that's what I think is happening there pulling Vortex aside. As far as the other weather things what you see is extension, ironically this year is -- they are still planting grass seed they are still putting in gardens, they are still cutting hay. There is a number of things that typically would start to be winding down at this time of the year, that are still very vibrant up the Midwest in the coastal areas and the Carolinas and up to the northeast.

So that’s going to play itself out for a while and we are still seeing again some forward buying but I like what we're seeing is the reaction to, I'll call it a late spring but they will come a point of time and it will be right around labor day or shortly before that will shift again and we are in great shape to take advantage of that.

Adam Sindler - Deutsche Bank

Okay. Very good. Thank you. I appreciate it.

Operator

And we'll take our next question from Aram Rubinson with Wolfe Research.

Aram Rubinson - Wolfe Research, LLC

Hi guys. Thanks for taking my question. What I'm trying to get a handle on is the historical kind of perspective of the promotions you mentioned you’re kind of sprinkling in some promotions which I understand but just remind of the history of that when you done that last and how it kind of developed, if you don't mind.

Gregory A. Sandfort

Aram we have been doing that for a number of years now and it's not really promotion. What it is store level, I'll call it customer interactions, whether we would do a farmers market on a weekend in a group of stores in a certain part of the country or we would have a pet swap meet or something. I mean it's all kind of interesting things that our marketing department has researched and developed and they are really local store events that we give the stores the opportunity to execute to and we actually put together a marketing package for them that’s done at the store.

So understand it's not about more promotion and it's not about on sale. This is we are an everyday price value company and that's how customers have come to trust us on pricing. So these are events that draw customers to the store they are primarily geared on the weekends and there is really a menu of things that they can use and we usually give them some guidance but we've been doing this for a number of years now.

Aram Rubinson - Wolfe Research, LLC

And maybe just last question is we are trying to rebound to get back to normal which is kind of let’s say 3.5 or 4 something maybe for the back half and in years past doing the 3.5 and the 4 wouldn't have kind of passed muster because you were comping up six, sevens and eight. I'm just wondering kind of the new normal kind of 3 to 4 and what can you do to get back to the old normal, because those were even better still?

Gregory A. Sandfort

Great question, not a simple answer. You know some of the things that I am encouraged about is that we are continuing to find new products and able to take some businesses that we thought had cycled through and were kind of mature and actually breathe some new life into them. We talked a little bit early about the safe business. That business was running hot for a number of years and we knew it's going to soften at some point. So it's one of those things when you look at those businesses and you say how do you offset that, how you continue to grow it well.

Sometimes if a pie gets smaller you have to go and look at how to get more of that pie. But I think in general we are going to continue to do the things that we think we do best and that is introduce new products, use in store events and things to bring customers through, introduce them to new products, make sure we’re in stock and watch those in stock levels and make those investments and really look at maximizing probably three or four key categories each season where we believe we have a dominant position.

You know we've learned that we get behind some of these categories from a merchandise presentation and branding and promotion level we can drive the business and I think we can do it at healthy margin. So there is more for us to do, unfortunately we have seen a little bit of some weather challenges that have gotten in the way but I believe we’ll get back to being the Tractor you know here shortly.

Aram Rubinson - Wolfe Research, LLC

Thanks, I hope so, bye.

Operator

(Operator Instructions). And we’ll take our next question Peter Keith with Piper Jaffray.

Jon Berg - Piper Jaffray

Great, thanks for taking our question. This is actually Jon Berg on for Pete tonight. It sounds like you guys have talked about corn being you know a deflation kind of indicator on the business and just curious about what you have seen with oil and steel in your business so far this year and how you are looking at those categories for the second half?

Anthony F. Crudele

Jon, this is Tony. The big driver as far as our adjustment to deflation is really corn prices. When we look at the other two factors which is oil and scraps steel are the other two indicators for our business. We did see some flattening out when it came to oil. But as we look at the back half of the year we don’t believe that those two indicators will be a significant driver of the deflation/inflation in the back half.

Jon Berg - Piper Jaffray

Okay, great. And then just quickly a second question. When did the softness in the safe category really start to set in and I mean how long do you anticipate that core category being a headwind?

Gregory A. Sandfort

Right the safe category has really been a headwind just the last two quarters so really 2014 and obviously the big driver has been some of the gun control issues that are there, especially the when it surfaced after Sandy Hook. So last year was very, very strong gun safe sales year and again most retailers have talked about that, especially in the sporting goods area about the softness of the industry.

Jon Berg - Piper Jaffray

Okay, great. Thanks a lot and good luck in the second-half.

Gregory A. Sandfort

Thank you.

Operator

And we will take our next question from Eric Bosshard with Cleveland Research Company.

Eric Bosshard - Cleveland Research

You spoke briefly on the west stores and the relative size and sales volume. Curious if you can talk a bit about the margin experience at this point and what you think as you forward as you open more stores out there specifically on the gross margin opportunity, what you are seeing and learning from those stores?

Gregory A. Sandfort

As we move west obviously we like the sales volume of those stores. As we talked in the past the real estate cost are more expensive. So from a modeling standpoint they fit into our model, from an economic standpoint. What we see in the gross margin side it’s going to vary slightly but we do like what we see from a gross margin perspective. Those territories that are a little competitive obviously are going to be much stronger. Some of that gross margin that we -- that is above chain average can be eaten up a little by the additional freight. So as we eventually get our distribution center out there at the end of 2015, hopefully some of that freight degradation will moderate some.

So net-net we really like what we see out there from a sales standpoint and from a gross margin standpoint and we believe there will be a very profitable segment of the business?

Eric Bosshard - Cleveland Research

From a mix, I understand the comments from competition, from a mix of what you are selling there and I suppose competition is well when the smoke clears and the infrastructure is there to supply those stores, is that likely to be a similar, better or worse gross margin relative to the existing business?

Gregory A. Sandfort

I think net it will be a better gross margin business.

Eric Bosshard - Cleveland Research

And then secondly, as it relates to -- Greg I understood the comments on some of the marketing things you have done with promotions and connecting with customers, but from a merchandising standpoint, curious if there is anything new or incremental either specifically or strategically that you are doing, merchandising to help grow the sales as we look out this year and in to next year if there is anything changing materially there that you can speak to?

Gregory A. Sandfort

Eric, there are number of things that we are doing differently but again I am reluctant to speak to in specific terms but I can tell you this that we still drive a lot newness into our stores that’s how we learn really where our customer is headed. They give us great indication very early on. So the testing programs are still robust and you will see as you travel our stores you will be able to tell where the focus is at. There is no question, you will see the investment behind inventory, you will see it in some of the promotions that we will run out there in print and online. So I would say to you that the pipeline is still full of new initiatives and new products and we continue to learn from the web business which is interesting there is some things that the web is teaching us about demand and about some products even in some price tiers that we can sell on the web and we are now are feeling that we can sell in store. So both are working nicely in tandem.

Eric Bosshard - Cleveland Research

Okay. Thank you.

Operator

And we'll take our next question from Matt Nemer with Wells Fargo.

Unidentified Analyst

Good afternoon. This is [Omera] on for Matt. You had previously mentioned a high level of moisture on the ground which is traditionally a tailwind to sale. Is that moisture still on the ground and then is it a potential benefit in Q3 and does that benefit sort of disappear when we get in around this time of the year?

Gregory A. Sandfort

Well traditionally we start seeing -- if you look at the -- we look at weather maps and we look at those forecasts and what we've seen is that this year in the Southwest and as we go to the Midwest and that no question that more moistures drive broader sales, it drives weed control and bug infestations and all those types of things. So those businesses still have a little bit of running room. But we haven't seen any kind moisture in those areas for a while. We've typically seen the maps showing a lot of drought. So that helped us this year a bit in the south and the southwest. I don't think it's going to give us any great benefit in third quarter. I think it's more you know in the second quarter obviously will benefit from that.

Unidentified Analyst

Great, thank you.

Operator

And we'll take our next question from Joe Feldman with Telsey Advisory Group.

Joseph Feldman - Telsey Advisory Group

Hi guys. Good afternoon. Thanks for taking my question. I wanted to ask you know I know you talked a lot about marketing promotion and the cadence and I apologize if I missed this during the call but any update on an Affinity type program I know you guys don't want to give away anything we've talked about that in the past, but just any, anything new on that front because I know you’ve talked about testing different things on the Affinity side?

Gregory A. Sandfort

Yeah. You are correct. We are still in the testing modes and we are, I would say developing a position now on what we believe will work tractor supply. It is not an additional discount type program as many of these programs turn out to be. This is different and we will be able to tell you more about that as the year progresses.

Joseph Feldman - Telsey Advisory Group

That's great. And then I wanted to go back to something I think a question or two ago you had brought up some comments about learning some things from the web and online sales and I guess I kind of wanted to broaden that out to like are you seeing anything shifting towards the web because I think there is this general view out there and certainly we have it that your business is somewhat defensive against the internet and I am wondering if you've seen any shifts in the business model that may suggest there is categories that do lend itself to e-commerce and maybe not a threat from Amazon but at least maybe more benefit for you to sell via the web?

Gregory A. Sandfort

I think generally speaking because we continue to see footsteps and traffic being very consistent in the store, what happens for us is the web becomes a facilitator and people use it for research. There are some products we are learning though that we can sell on the web and I'll give example of one, chicken coops. Now you may say that it's kind of a silly category to talk about but we can sell very high end coops on the web and much larger scale coops on the web than we can even sell from and really facilitate our presentation in our stores for. And that was an category that to be honest with you we weren’t sure that it was going to work as well as it did. It’s been terrific.

I also say to you that the web also teaches us a little bit about price transparency and when it comes to things like a [drill] that's not going to be a category, I am going to spend a lot of time and money on because honestly that drill is out there from everybody at a price. But I will have it and I will have an assortment so that my customer sort of meets their needs but what I will find is other products in other categories are things that are unique to me that I can offer my customer around that can’t be found on the website or if it is you have to search multiple places to find it. But our whole focus is to use that web piece as an extension of the stores and to use it as a piece of communication as well as to drive commerce and we are very pleased with the progress we are seeing there and what it is again, there is some teaching going in forth between both of those groups, the store level group and the web group on how to manage some of our businesses and what we can sell.

Joseph Feldman - Telsey Advisory Group

Got it, that’s helpful. Thanks and have a good quarter guys.

Gregory A. Sandfort

Thank you.

Operator

And that does conclude today’s question-and-answer session. At this time I will turn the conference back over to the speakers for any additional or closing remarks.

Gregory A. Sandfort

Yeah, this concludes our second quarter earnings call. I like to thank you all for your interest in Tractor Supply and we look forward to speaking to you again on our third quarter earnings call in October.

Operator

That does conclude today's conference. Thank you for your participation.

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Source: Tractor Supply Company's (TSCO) CEO Gregory Sandfort on Q2 2014 Results - Earnings Call Transcript
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