Tractor Supply (TSCO) 10-K risk factor changes: FY2019 vs FY2018

[removed: General] [added: *General] economic conditions may adversely affect our financial [removed: performance.][added: performance.*]

A weakening of economic conditions affecting disposable consumer income such as lower employment levels, uncertainty or changes in business or political conditions, higher interest rates, higher tax rates, higher fuel and energy costs, higher labor and healthcare costs, the impact of natural disasters or acts of terrorism, [added: general health epidemics,] and other matters could reduce consumer spending or cause consumers to shift their spending to competitors.

[removed: Failure] [added: *Failure] to protect our reputation could have a material adverse effect on our brand [removed: name.][added: name or any of our exclusive brands.*]

Our success depends in part on the value and strength of the Tractor Supply [removed: name.][added: name, including our exclusive brands.]

[removed: We] [added: *We] may be unable to increase sales at our existing [removed: stores.][added: stores.*]

Various factors affect the comparable store sales at our existing stores, [removed: including] [added: including, among others,] the general retail sales environment, our ability to efficiently source and distribute products, changes in our merchandise assortment, competition, proximity of our locations to one another or to the locations of other competing retailers, increased presence of online retailers, current economic conditions, customer satisfaction with our products, [added: retail pricing,] the timing of promotional events, the release of new merchandise, the success of marketing [removed: programs] [added: programs,] and weather conditions.

[removed: Purchase] [added: *Purchase] price volatility, including inflationary and deflationary pressures, may adversely affect our financial [removed: performance.][added: performance.*]

We are subject to market risk with respect to the pricing of certain products and services, which include, among other items, grain, corn, steel, petroleum, cotton, and other commodities, as well as [added: duties, tariffs,] diesel [removed: fuel] [added: fuel,] and transportation services.

[removed: Weather] [added: *Weather] conditions may have a significant impact on our financial [removed: results.][added: results.*]

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

[added: While extreme weather conditions can positively impact our operating results by] increasing demand in affected locations for products needed to cope with the weather condition and its effects, they can also negatively affect our business depending on the severity and length of these conditions, as a result of store [removed: closings] [added: closings, damage to our stores] or [added: merchandise, or] the inability of customers to shop at our stores due to weather conditions.

[removed: Our] [added: *Our] merchandising and marketing initiatives may not provide expected [removed: results.][added: results.*]

If we misjudge the market or our marketing programs are not successful, we may overstock unpopular products and be forced to take inventory [added: impairment or retail] price reductions that have a material adverse effect on our profitability.

Shortages of key merchandise could also have a material adverse [removed: impact] [added: effect] on [removed: operating results and] [added: our] financial [removed: condition.][added: condition and results of operations.]

[removed: Capital] [added: *Capital] required for growth may not be [removed: available.][added: available.*]

[removed: Disruptions in] [added: In addition, disruptions to] the capital and credit markets could adversely affect the ability of the banks to meet their commitments.

[removed: Our access to funds under our debt facilities is dependent on the] ability of the banks that are parties to the facility to meet their funding commitments.

[removed: Failure] [added: *Failure] to open and manage new stores in the number and manner currently contemplated could adversely affect our [removed: financial][added: financial*]

[removed: performance.][added: *performance.*]

This expansion strategy is dependent on our ability to find suitable locations, and we face competition from many retailers [added: and other businesses] for such sites.

[removed: Our] [added: *Our] failure to attract and retain qualified team members, increases in [removed: wage] [added: wage,] and labor [removed: costs] [added: costs,] and changes in laws and other labor issues could adversely affect our financial [removed: performance.][added: performance.*]

Our ability to [added: maintain and] continue expanding operations depends on our ability to attract and retain a large and growing number of qualified team members.

[removed: The unanticipated] [added: *The] loss of current members of our senior management team and other key team members or the failure to successfully manage an executive officer transition may adversely affect our operating [removed: results.][added: results.*]

[removed: We] [added: *We] may pursue strategic acquisitions and the failure of an acquisition to produce the anticipated results or the inability to fully integrate the acquired companies could have an adverse impact on our [removed: business.][added: business.*]

[removed: Competition] [added: *Competition] may hinder our ability to execute our business strategy and adversely affect our [removed: operations.][added: operations.*]

[removed: We] [added: *We] face risks associated with vendors from whom our products are [removed: sourced.][added: sourced.*]

We have agreements with our vendors in which the vendors agree to comply with applicable laws, including labor and environmental laws, and to indemnify us against [added: certain liabilities and costs.]

This reliance exposes us to the risk of inadequate and untimely supplies of various products due to political, economic, social, [added: health (including, but not limited to, the recent COVID-19 coronavirus outbreak originating in China),] or environmental conditions, transportation delays, or changes in laws and regulations affecting distribution.

Any problems caused by these third-parties, [added: or issues associated with their products,] including [removed: those resulting from] [added: customer or governmental complaints,] breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, and cyber attacks or security breaches at a vendor could [added: subject the Company to litigation and] adversely affect the Company’s ability to deliver products and services to its customers and [removed: otherwise conduct its business.][added: have a material adverse effect on our results of operations and financial condition.]

As an importer, our business is subject to the risks generally associated with doing business internationally, such as domestic and foreign governmental regulations, economic disruptions, [added: global or regional health epidemics,] delays in shipments, transportation capacity and costs, currency exchange rates, and changes in political or economic conditions in countries from which we purchase products.

If any such factors were to render the conduct of business in particular countries undesirable or impractical or if additional U.S. quotas, duties, [added: tariffs,] taxes, or other charges or restrictions were imposed upon the importation of our products in the future, our financial condition and results of operations could be materially adversely affected.

Major developments in tax policy or trade relations, such as the disallowance of tax deductions for imported merchandise or the imposition of tariffs on imported products, could have a material adverse effect on our business, results of [removed: operations] [added: operations,] and [removed: liquidity.][added: financial condition.]

[removed: We] [added: *We] rely on manufacturers located in foreign countries, including China, for merchandise.

Our business may be materially adversely affected by risks associated with international trade, including the impact of tariffs [removed: recently imposed] [added: (imposed] and [removed: proposed] [added: potential)] by the U.S. with respect to certain consumer goods imported from [removed: China.][added: China.*]

The U.S. [removed: recently] [added: has] imposed tariffs on certain products imported into the U.S. from China and could propose additional tariffs.

The imposition of tariffs on imported products [removed: is expected to increase] [added: has increased] our costs and could result in reduced sales and profits.

We continue to evaluate the [removed: potential] impact of the effective and [removed: proposed] [added: potential] tariffs on our supply chain, costs, sales, and profitability as well as our strategies to mitigate any negative impact, including negotiating with our vendors, seeking alternative sourcing [removed: options] [added: options,] and adjusting retail selling prices.

Given the uncertainty regarding the scope and duration of the current and [removed: proposed] [added: potential] tariffs, as well as the potential for additional trade actions by the U.S. or other countries, the impact on our business, results of [removed: operations] [added: operations,] and financial condition is uncertain but could be significant.

[removed: A] [added: *A] significant disruption to our distribution network or to the timely receipt of inventory could adversely impact sales or increase our transportation costs, which would decrease our [removed: profits.][added: profits.*]

[added: Any disruption, unanticipated expense, or] operational failure related to this process could [added: negatively] affect [removed: store operations negatively.][added: our operations.]

Further, adverse publicity about our merchandise products, whether valid or not, may discourage consumers from buying the products we offer.

Our failure to generate expected cash flow could impair our growth.

Our access to funds under our debt facilities is dependent on the

[Index](#i_0_7)

Additionally, new stores can also impact the sales and contribution margins of existing stores located in close proximity.

[Index](#i_0_7)

*We face risks from our use of service providers or other third-parties whom we rely upon for conducting our business.*

The Company is dependent upon numerous service providers and other third-parties to conduct our business.

Any failure of these third-parties to provide the expected or agreed-upon level of service in a timely manner for any reason could adversely affect the Company’s ability to deliver products and services to its customers and otherwise conduct its business.

Further, our reputation or brand could be adversely impacted by the actions of these third-parties.

[Index](#i_0_7)

While the Company selects these third-party vendors carefully, it does not control their actions or the components or manufacturer of their products.

[Index](#i_0_7)

negatively affect our business.

[Index](#i_0_7)

[Index](#i_0_7)

[Index](#i_0_7)

Our operations, including our outsourced exclusive brand manufacturing partners, are subject to regulation by the Occupational Safety and Health Administration (“OSHA”), the Food and Drug Administration (the “FDA”), the Department of Agriculture (the “USDA”) and by various other federal, state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising, labeling and export of our products, including food safety standards.

While extreme weather conditions can positively impact our operating results by

certain liabilities and costs.

As a result, we may need to seek alternative suppliers or vendors, raise retail selling prices or make changes to our operations.

Any of these actions could have a material adverse effect on our sales and profitability, results of operations, and financial condition.

Any disruption, unanticipated expense, or

Because of the inherent limitations in all internal

[removed: The] [added: *The] following discussion and analysis is intended to provide the reader with information that will assist in understanding the significant factors affecting our consolidated operating results, financial condition, liquidity, and capital resources during the three-year period ended December [removed: 29, 2018] [added: 28, 2019] (our fiscal years [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016).][added: 2017).]

See “Forward-Looking Statements” and “Risk Factors” included elsewhere in this [removed: report.][added: report.*]

[removed: Tractor] [added: *Tractor] Supply reports its financial results in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

[removed: Overview][added: Overview]

The Company is focused on supplying the needs of recreational [removed: farmers and ranchers] [added: farmers, ranchers,] and [removed: others] [added: all those] who enjoy [added: living] the rural lifestyle (which we refer to as the [removed: “Out Here”] [added: “*Out Here*”] lifestyle), as well as tradesmen and small businesses.

As of December [removed: 29, 2018,] [added: 28, 2019,] we operated [removed: 1,940] [added: 2,024] retail stores in 49 states under the names [removed: Tractor] [added: *Tractor] Supply [removed: Company, Del’s] [added: Company,* *Del’s] Feed & Farm [removed: Supply,] [added: Supply,*] and [removed: Petsense.][added: *Petsense.* We also operate websites under the names *TractorSupply.com* and *Petsense.com*.]

[removed: | • |] [added: -] Equine, livestock, pet, and small animal products, including items necessary for their health, care, growth, and containment; [removed: |]

[removed: | • |] [added: -] Hardware, truck, towing, and tool products; [removed: |]

[removed: | • |] [added: -] Seasonal products, including heating, lawn and garden items, power equipment, gifts, and toys; [removed: |]

[removed: | • |] [added: -] Work/recreational clothing and footwear; and [removed: |]

[removed: | • |] [added: -] Maintenance products for agricultural and rural use. [removed: |]

Tractor Supply Company believes we can grow our business by being the most dependable supplier of relevant products and services for the [removed: “Out Here”] [added: “*Out Here*”] lifestyle, creating customer loyalty through personalized experiences, and providing convenience that our customers expect at anytime, anywhere, and in any way they choose.

Our long-term growth strategy is to: (1) drive profitable growth through new store openings and by expanding omni-channel capabilities, thus tying together our website product content, social media, digital, and online shopping experience, attracting new customers and driving loyalty, (2) build customer-centric engagement by leveraging analytics to deliver legendary customer service, seasoned advice, and personalized experiences, (3) offer relevant assortments and services across all channels through exclusive and national brands and continue to introduce new products [added: and services] through our test and learn strategy, (4) enhance our core and foundational capabilities by investing in infrastructure and process improvements which will support growth, scale, and agility while improving the customer experience, and (5) expand through selective acquisitions, as such opportunities arise, to add complementary businesses and to enhance penetration into new and existing markets to supplement organic growth.

Achieving this strategy will require a foundational focus on: (1) organizing, optimizing, and empowering our team members for growth by developing skills, talent, and leadership across the organization, and (2) implementing operational efficiency initiatives, including leverage of [removed: technology,] [added: technology and automation,] to align our cost structure to support new business capabilities for margin improvement and cost reductions.

Over the past five years, we have experienced considerable growth in stores, growing from [removed: 1,276] [added: 1,382] stores at the end of fiscal [removed: 2013] [added: 2014] to [removed: 1,940] [added: 2,024] stores [removed: (1,765] [added: (1,844] Tractor Supply and Del’s retail stores and [removed: 175] [added: 180] Petsense retail stores) at the end of fiscal [removed: 2018,] [added: 2019,] and in net sales, with a compounded annual growth rate of approximately [removed: 8.9%.][added: 7.9%.]

We have developed a proven method for selecting store sites and have identified [removed: approximately 700] [added: over 600] additional opportunities for new Tractor Supply stores.

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

[removed: Executive Summary][added: Executive Summary]

In fiscal 2017, we opened 101 new Tractor Supply stores and 25 [removed: new] Petsense [removed: stores.][added: stores and had three store relocations.]

This resulted in a selling square footage increase of approximately [removed: 4.9%] [added: 4.3%] in fiscal [removed: 2018] [added: 2019] and approximately [removed: 6.3%] [added: 4.9%] in fiscal [removed: 2017.][added: 2018.]

Net sales increased [removed: 9.0%] [added: 5.6%] to [removed: $7.91] [added: $8.35] billion in fiscal [removed: 2018] [added: 2019] from [removed: $7.26] [added: $7.91] billion in fiscal [removed: 2017.][added: 2018.]

Comparable store sales increased [removed: 5.1%] [added: 2.7%] in fiscal [removed: 2018] [added: 2019] versus a [removed: 2.7%] [added: 5.1%] increase in fiscal [removed: 2017.][added: 2018.]

Gross profit increased [removed: 8.4%] [added: 6.3%] to [removed: $2.70] [added: $2.87] billion in fiscal [removed: 2018] [added: 2019] from [removed: $2.49] [added: $2.70] billion in fiscal [removed: 2017,] [added: 2018,] and gross margin [removed: decreased 18] [added: increased 22] basis points to [removed: 34.16%] [added: 34.38%] of net sales in fiscal [removed: 2018] [added: 2019] from [removed: 34.34%] [added: 34.16%] of net sales in fiscal [removed: 2017.][added: 2018.]

Operating income [removed: decreased 59] [added: increased three] basis points to [removed: 8.87%] [added: 8.90%] of net sales in fiscal [removed: 2018] [added: 2019] from [removed: 9.46%] [added: 8.87%] of net sales in fiscal [removed: 2017.][added: 2018.]

For fiscal [removed: 2018,] [added: 2019,] net income was [removed: $532.4] [added: $562.4] million, or [removed: $4.31] [added: $4.66] per diluted share, compared to [removed: $422.6] [added: $532.4] million, or [removed: $3.30] [added: $4.31] per diluted share, in fiscal [removed: 2017.][added: 2018.]

Excluding the [added: after-tax] impact of [removed: the revaluation of the Company’s net deferred tax asset resulting] [added: an executive transition agreement] in [removed: a one-time, non-cash charge] [added: fiscal 2019] of approximately [removed: $4.9] [added: $2.3] million, or [removed: $0.03] [added: $0.02] per diluted share, adjusted net income for fiscal [removed: 2017] [added: 2019] was [removed: $427.5] [added: $564.7] million, or [removed: $3.33] [added: $4.68] per diluted share.

We ended the year with [removed: $86.3] [added: $84.2] million in cash and outstanding debt of [removed: $407.4] [added: $396.5] million, after returning [removed: $496.9] [added: $696.0] million to our stockholders through stock repurchases and quarterly cash dividends.

[removed: Significant] [added: Significant] Accounting Policies and [removed: Estimates][added: Estimates]

| [removed: Description] [added: Description] | | [removed: Judgments] [added: | | | | Judgments] and [removed: Uncertainties] [added: Uncertainties] | | [removed: Effect] [added: | | | | Effect] if Actual Results Differ from [removed: Assumptions] [added: Assumptions] | [added: | |]

| [removed: Inventory Valuation:] [added: Inventory Valuation:] | | | | | [added: | | | | | | | | | |]

| Inventory Impairment | | | | | [added: | | | | | | | | | |]

| 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. | | [added: | | | |] 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. | | [added: | | | |] 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 inventory impairment reserve as of December [removed: 29, 2018,] [added: 28, 2019,] would have affected net income by approximately [removed: $0.8] [added: $1.1] million in fiscal [removed: 2018.] [added: 2019.] | [added: | |]

| Shrinkage | | | | | [added: | | | | | | | | | |]

| 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. | | [added: | | | |] 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 merchandising strategies. | | [added: | | | |] 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 [removed: 29, 2018,] [added: 28, 2019,] would have affected net income by approximately $2.2 million in fiscal [removed: 2018.] [added: 2019.] | [added: | |]

| Vendor Funding | | | | | [added: | | | | | | | | | |]

| 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 [added: guaranteed] 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 [removed: is] [added: are] estimated based upon initial commitments and anticipated purchase levels with applicable vendors. | | [added: | | | |] 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. | | [added: | | | |] 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 [removed: 2018.] [added: 2019.] If a 10% reserve had been applied against our outstanding vendor funding due as of December [removed: 29, 2018,] [added: 28, 2019,] net income would have been affected by approximately [removed: $1.7] [added: $2.2] million in fiscal [removed: 2018.] [added: 2019.] 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. | [added: | |]

| Freight | | | | | [added: | | | | | | | | | |]

| 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. | | [added: | | | |] 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. | | [added: | | | |] 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 [removed: 29, 2018,] [added: 28, 2019,] net income would have been affected by approximately [removed: $11.7] [added: $10.4] million in fiscal [removed: 2018.] [added: 2019.] | [added: | |]

| [removed: Self-Insurance Reserves:] [added: Self-Insurance Reserves:] | | | | | [added: | | | | | | | | | |]

| We self-insure a significant portion of our [removed: employee medical insurance,] workers’ compensation [removed: insurance,] [added: 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, [removed: demographic] [added: loss development] factors, and severity factors. | | [added: | | | |] The full extent of certain [removed: claims, especially] workers’ compensation and general liability [removed: claims,] [added: 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. | | [added: | | | |] 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 [removed: 29, 2018,] [added: 28, 2019,] would have affected net income by approximately [removed: $5.1] [added: $5.0] million in fiscal [removed: 2018.] [added: 2019.] | [added: | |]

We believe this information is useful in providing period-to-period comparisons of the results of our continuing operations.*

In fiscal 2019, we opened 80 new Tractor Supply stores in 29 states and eight new Petsense stores in four states.

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[Index](#i_0_7)

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| Description | | | | | | Judgments and Uncertainties | | | | | | Effect if Actual Results Differ from Assumptions | | |

[Index](#i_0_7)

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[Index](#i_0_7)

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| Description | | | | | | Judgments and Uncertainties | | | | | | Effect if Actual Results Differ from Assumptions | | |

[Index](#i_0_7)

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| 2019 | | | | | | (13 weeks) | | | | | | (13 weeks) | | | | | | (13 weeks) | | | | | | (13 weeks) | | | | | | (52 weeks) | | |

| Net sales | | | | | | $ | 1,822,220 | | | | | $ | 2,353,782 | | | | | $ | 1,984,144 | | | | | $ | 2,191,785 | | | | | $ | 8,351,931 | |

| Gross profit | | | | | | 614,984 | | | | | | 820,745 | | | | | | 694,240 | | | | | | 741,801 | | | | | | 2,871,770 | | |

| Operating income | | | | | | 103,408 | | | | | | 287,557 | | | | | | 161,817 | | | | | | 190,438 | | | | | | 743,220 | | |

| Net income | | | | | | 76,832 | | | | | | 219,210 | | | | | | 122,133 | | | | | | 144,179 | | | | | | 562,354 | | |

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| Basic | | | | | | $ | 0.63 | | | | | $ | 1.82 | | | | | $ | 1.03 | | | | | $ | 1.22 | | | | | $ | 4.70 | |

| Diluted | | | | | | $ | 0.63 | | | | | $ | 1.80 | | | | | $ | 1.02 | | | | | $ | 1.21 | | | | | $ | 4.66 | |

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| Comparable store sales increase (a) | | | | | | 5.0 | | % | | | | 3.2 | | % | | | | 2.9 | | % | | | | 0.1 | | % | | | | 2.7 | | % |

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| | | | | | | First Quarter | | | | | | Second Quarter | | | | | | Third Quarter | | | | | | Fourth Quarter | | | | | | Total | | |

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| Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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[Index](#i_0_7)

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We also operate websites under the names TractorSupply.com and Petsense.com.

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| 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 | | |

| 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 | | % |

Petsense stores are considered comparable stores beginning in the fourth quarter of fiscal 2017.

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Acquired Petsense stores are considered comparable beginning in the fourth quarter of fiscal 2017.

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negative impact from a mix shift of products sold during the fourth quarter, partially offset by strength in the Company’s price management program and strong sell through of seasonal merchandise throughout the year.

Fiscal 2017 Compared to Fiscal 2016

Net sales increased 7.0% to $7.26 billion in fiscal 2017 from $6.78 billion in fiscal 2016.

The prior year included an extra sales week as a part of the Company’s 53-week calendar in 2016, which negatively impacted the overall sales increase by approximately 1.6 percentage points.

The comparable store sales increase was driven by an increase in traffic counts and the year-round strength of C.U.E. products, primarily animal- and pet-related merchandise.

Warmer than normal weather patterns early in the first quarter negatively impacted the sales of winter seasonal items and winter storms in March had an unfavorable impact on the start to the spring selling season.

Beginning in the second quarter, we experienced broad-based improvement through the remainder of the year in all geographic regions and major product categories driven by strength in sales of everyday basic items in C.U.E. and year-round products.

The third quarter experienced an additional benefit from an extended spring and summer selling season and strong sales of emergency response products related to hurricanes during the quarter while the fourth quarter experienced an additional benefit from solid sales in cold weather and other seasonal products.

| Beginning of period | | 1,595 | | | 1,488 | |

| End of period | | 1,685 | | | 1,595 | |

| Stores acquired | | — | | | 136 | |

| End of period | | 168 | | | 143 | |

| Product Category: | | 2017 | | | 2016 | |

Gross profit increased 7.2% to $2.49 billion in fiscal 2017 compared to $2.33 billion in fiscal 2016.

As a percent of net sales, gross margin remained flat to prior year at 34.3%.

Gross margin percentage was negatively impacted by higher markdowns on cold weather merchandise and targeted promotional activity in the first quarter, as well as a higher freight expense throughout the year due to higher carrier costs, increased average fuel costs and a shift in product mix towards more freight intensive products.

These declines in gross margin were offset by strong sell-through rates and solid price and inventory management, particularly in the back half of the year.

SG&A expenses, including depreciation and amortization, for fiscal 2017 increased 10.7% to $1.81 billion from $1.63 billion in fiscal 2016.

The increase in SG&A as a percent of net sales was primarily attributable to higher store payroll from wage inflation and our continued effort to enhance customer service, increased incentive compensation at the store level from the strong year-over-year growth in comparable store sales, the deleverage of occupancy and other fixed costs resulting from the integration of Petsense expenses and the 53rd week of sales in fiscal 2016, that did not reoccur in fiscal 2017, and investments in infrastructure and technology to support our strategic long-term growth initiatives.

As a result of the TCJA, we made a reasonable estimate of the effects of the tax legislation on our existing deferred tax balances as of December 30, 2017, and recognized a one-time, non-cash charge of $4.9 million, which is included as a component of income tax expense from continuing operations in fiscal 2017.

Excluding the impacts of the TCJA, our effective income tax rate in fiscal 2017 would have been 36.4%.

Excluding the impact of the revaluation of the Company’s net deferred tax asset in fiscal 2017 resulting in a one-time, non-cash charge of approximately $4.9 million, or $0.03 per diluted share, adjusted net income for fiscal 2017, was $427.5

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

We are exposed to interest rate changes, primarily as a result of borrowings under our 2016 Senior Credit Facility (as discussed in Note [removed: 5] [added: 4] to the Consolidated Financial Statements), which bear interest based on variable rates.

As discussed in Note [removed: 6] [added: 5] to the Consolidated Financial Statements, we entered into interest rate swap agreements which are intended to mitigate interest rate risk associated with future changes in interest rates for the term loan borrowings under the 2016 Senior Credit Facility.

A 1% change in interest rates on our variable rate debt in excess of that amount covered by the interest rate swaps would have affected interest expense by approximately [removed: $1.6] [added: $1.9] million, [removed: $2.1] [added: $1.6] million, and [removed: $1.5] [added: $2.1] million in fiscal [added: 2019,] 2018, [removed: 2017,] and [removed: 2016,] [added: 2017,] respectively.

[removed: As] [added: Based on the amount] of [removed: December 29, 2018, we have no] outstanding variable rate debt [removed: other than the] [added: as of December 28, 2019, excluding those] borrowings [added: for] which [removed: are covered by] [added: we have] interest rate [removed: swaps; therefore, on a prospective basis,] [added: swaps,] a 1% change in interest rates [removed: on our variable rate debt, in excess of that amount covered by the interest rate swaps,] would [added: not] result in [removed: no additional] [added: any material increase in our] interest [removed: expense.][added: expense on a prospective basis.]

[removed: Purchase] [added: Purchase] Price [removed: Volatility][added: Volatility]

We are subject to market risk with respect to the pricing of certain products and services, which include, among other items, grain, corn, steel, petroleum, cotton, and other commodities, as well as [added: duties, tariffs, diesel fuel, and] transportation services.

Our strategy is to reduce or mitigate the effects of purchase price volatility, principally by taking advantage of vendor incentive programs, economies of scale from increased volume of purchases, adjusting retail [removed: prices] [added: prices,] and selectively buying from the most competitive vendors without sacrificing quality.

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

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[removed: Overview][added: Overview]

The Company is focused on supplying the needs of recreational [removed: farmers and ranchers] [added: farmers, ranchers,] and all [removed: others] [added: those] who enjoy [added: living] the rural lifestyle (which we refer to as the [removed: “Out Here”] [added: “*Out Here*”] lifestyle), as well as tradesmen and small businesses.

We operate retail stores under the names [removed: Tractor] [added: *Tractor] Supply Company, Del’s Feed & Farm [removed: Supply,] [added: Supply,*] and [removed: Petsense] [added: *Petsense*] and operate websites under the names [removed: TractorSupply.com] [added: *TractorSupply.com*] and [removed: Petsense.com.][added: *Petsense.com*.]

At December [removed: 29, 2018,] [added: 28, 2019,] we operated [removed: 1,940] [added: 2,024] retail stores in 49 states [removed: (1,765] [added: (1,844] Tractor Supply and Del’s retail stores and [removed: 175] [added: 180] Petsense retail stores).

[removed: Business Strategy][added: Business Strategy]

[removed: Market Niche][added: *Market Niche*]

We have identified a specialized market niche: supplying the lifestyle needs of recreational [removed: farmers and ranchers] [added: farmers, ranchers,] and [removed: others] [added: all those] who enjoy [added: living] the rural lifestyle, as well as tradesmen and small businesses.

By focusing our product assortment on these core customers, we believe we are differentiated from general merchandise, home [removed: center] [added: center,] and other specialty retailers.

We cater to the rural lifestyle and often serve a market by being a trip consolidator for many basic maintenance needs for farm, [removed: ranch] [added: ranch,] and rural customers through convenient shopping options both in-store and online.

[removed: Customers][added: *Customers*]

This customer base includes recreational [removed: farmers and ranchers] [added: farmers, ranchers,] and all [removed: others] [added: those] who enjoy [added: living] the rural lifestyle, as well as tradesmen and small businesses.

[removed: Customer Service][added: *Customer Service*]

We also engage with our customers through our e-commerce website [removed: (TractorSupply.com),] [added: (*TractorSupply.com*),] which provides the opportunity to allow customers to shop at anytime, anywhere, and in any way they choose, while delivering enhanced product information, research, and decision tools that support product selection and informational needs in specific subject areas.

We use a third-party provider to [added: survey and] measure our level of customer service.

We carefully evaluate the feedback we receive from our customers and implement improvements at [added: both] the [added: Company and the] individual store level based on that feedback.

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

[removed: Store] [added: *Store] Personnel and [removed: Training][added: Training*]

We seek to hire store team members [added: who live and appreciate the *"Out Here"* lifestyle, including those] with farming and ranching backgrounds, with particular emphasis on general maintenance, equine, and welding.

[removed: | • |] [added: -] A thorough on-boarding process to prepare new team members for their new role; [removed: |]

[removed: | • |] [added: -] Productive workplace environment training that is intended to educate team members on company policies and procedures covering topics such as harassment, discrimination, and retaliation; [removed: |]

[removed: | • |] [added: -] New store opening training that prepares our store managers to open new stores to Company standards; [removed: |]

[removed: | • |] [added: -] A management training program which covers all aspects of our store operations, delivering superior service, and managing the team member experience; [removed: |]

[removed: | • |] [added: -] Structured training on customer service and selling skills; [removed: |]

[removed: | • |] [added: -] Online product knowledge training produced in conjunction with key vendors; [removed: |]

[removed: | • |] [added: -] Leadership development programs that prepare leaders to expand their current contributions; and [removed: |]

[removed: | • |] [added: -] An annual store manager meeting with vendor product presentations. [removed: |]

[removed: Store Environment][added: *Store Environment*]

[removed: Merchandising] [added: *Merchandising] and [removed: Purchasing][added: Purchasing*]

We offer an extensive assortment of products for all those seeking to enjoy the [removed: “Out Here”] [added: “*Out Here”*] lifestyle, as well as tradesmen and small businesses.

Our full line of product offerings includes a broad selection of high quality, reputable brand name and exclusive brand products and is supported by a strong in-stock inventory position with approximately 15,500 to 20,000 products per store as well as over [removed: 100,000] [added: 125,000] products online.

No single product accounted for more than 10% of our sales during fiscal [removed: 2018.][added: 2019.]

[removed: | • |] [added: -] Equine, livestock, pet, and small animal products, including items necessary for their health, care, growth, and containment; [removed: |]

[removed: | • |] [added: -] Hardware, truck, towing, and tool products; [removed: |]

[removed: | • |] [added: -] Seasonal products, including heating, lawn and garden items, power equipment, gifts, and toys; [removed: |]

[removed: | • |] [added: -] Work/recreational clothing and footwear; and [removed: |]

[removed: | • |] [added: -] Maintenance products for agricultural and rural use. [removed: |]

The following table indicates the percentage of net sales represented by each of our major product categories during fiscal [added: 2019,] 2018, [removed: 2017,] and [removed: 2016:][added: 2017:]

| | [removed: Percent] [added: | | Percent] of Net [removed: Sales] [added: Sales] | | | | | | | | [added: | | | | | | | | | | | | | | | | | | |]

| | [removed: Fiscal Year] | | [added: Fiscal Year] | | | | | | [added: | | | | | | | | | | | | | | | | | | | | |]

| [removed: Product Category:] [added: Product Category:] | [removed: 2018] | | [added: 2019] | [removed: 2017] | | | [removed: 2016] | | [added: 2018 | | | | | | 2017 | | | | | | | | | | | | | | |]

[Index](#i_0_7)

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[Index](#i_0_7)

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| • | | | *Countyline*® (livestock, farm and ranch equipment) | | | • | | | *Ridgecut*® (apparel) | | |

| • | | | *Huskee*® (outdoor power equipment) | | | • | | | *Treeline*® (hunting gear and accessories) | | |

We also use third-party operated import centers and mixing centers which provide additional distribution capacity.

In fiscal 2019, we completed and began shipping operations at our new northeast distribution center in Frankfort, New York.

[Index](#i_0_7)

The customer is our singular focus and our priority is ensuring they can engage with us in the most convenient manner for them whether in our stores, on our website, or via our Customer Solutions Center.

Our focus is on delivering a comprehensive mobile experience while maintaining a straight-forward shopping experience to further offer the convenience our customers need.

[Index](#i_0_7)

- Replenishment and allocation systems;

- Warehouse and transportation management systems;

[Index](#i_0_7)

At December 28, 2019, we operated 2,024 retail stores in 49 states (1,844 Tractor Supply and Del’s retail stores and 180 Petsense retail stores).

In December 2018, we announced a goal to reduce carbon emissions from our facilities by 25% by 2025 from our 2015 baseline as part of the Company's Stewardship Program.

Additional information can be found in our annual sustainability report on our website.

[Index](#i_0_7)

Information about our Executive Officers

| Harry A. Lawton, III | | | President and Chief Executive Officer | | | 45 | | |

| John P. Ordus | | | Executive Vice President – Chief Stores Officer | | | 44 | | |

| Jonathan S. Estep | | | Executive Vice President – Chief Merchandising Officer | | | 40 | | |

| Christi C. Korzekwa | | | Senior Vice President – Marketing | | | 54 | | |

| Colin W. Yankee | | | Executive Vice President – Chief Supply Chain Officer | | | 42 | | |

Harry A.

Lawton, III was appointed as President and Chief Executive Officer on January 13, 2020.

Mr. Lawton served as President of Macy's, Inc. from September 2017 to December 2019.

Prior to that time, Mr. Lawton served as Senior Vice President, North America at eBay, Inc. since May 2015.

Mr. Lawton previously held a number of leadership positions at Home Depot, Inc. from 2005 to 2015, including Senior Vice President of Merchandising and head of Home Depot's online business.

Since January 2019, Mr. Lawton has served as a director of Sealed Air Corporation and previously served as a director of Buffalo Wild Wings, Inc. from October 2016 to February 2018.

Since March 2018, Mr. Mills has served as a director of B&G Foods, Inc.

John P.

Ordus was promoted to Executive Vice President - Chief Stores Officer in February 2020, after having served as Senior Vice President - Store Operations since August 2015.

Mr. Ordus joined the Company as a District Manager in February 2002 after the acquisition of Quality Farm and Fleet with which Mr. Ordus held roles since January 1988.

Jonathan S.

Prior to that time, Mr. Estep served the Company as a Vice President, Divisional Merchandise Manager from February 2014.

Mr. Estep also previously served in various other leadership roles in merchandising since he re-joined the Company in January 2008.

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| Ÿ Groundwork® (lawn and garden supplies) | Ÿ Treeline® (hunting gear and accessories) |

| Ÿ JobSmart® (tools) | Ÿ Untamed® (pet foods) |

In fiscal 2018, we completed the expansion of our existing distribution center in Waverly, Nebraska.

Additionally, we substantially completed the construction of our new northeast distribution center in Frankfort, New York, which began receiving merchandise in the fourth quarter of fiscal 2018, and is expected to begin shipping merchandise to our stores in the first quarter of fiscal 2019.

We connect with our customers in their manner of choosing, whether in our store, on our e-commerce website (TractorSupply.com), or through e-mail, social media, direct mail, or our Customer Solutions Center.

We also provide additional convenience by offering flexible payment options and a simplified checkout process.

We are focused on delivering an enhanced mobile and tablet experience, improving the site response time, and expanding our product offerings for vendor direct to customer shipments, allowing us to serve our customers at any time they choose.

| • | Replenishment system; |

Executive Officers of the Registrant

| | | |

| --- | --- | --- |

| Gregory A. Sandfort | Chief Executive Officer | 63 |

| Steve K. Barbarick | President – Chief Operating Officer | 51 |

| Chad M. Frazell | Senior Vice President – Human Resources | 46 |

Gregory A.

Sandfort has served as Chief Executive Officer since December 2012.

Mr. Sandfort served as President and Chief Executive Officer of the Company from December 2012 to May 2016.

Prior to that time, Mr. Sandfort served as President and Chief Operating Officer of the Company since February 2012.

Mr. Sandfort served as President and Chief Operating Officer at Michaels Stores, Inc. from March 2006 to August 2007, and as Executive Vice President – General Merchandise Manager at Michaels Stores, Inc. from January 2004 to February 2006.

Mr. Sandfort has served as a Director of the Company since February 2013.

Steve K.

Barbarick has served as President – Chief Operating Officer since August 2018, prior to which he served as President and Chief Merchandising Officer since May 2016.

Mr. Barbarick previously served as Senior Vice President – Merchandising since February 2011, after having served as Vice President – Merchandising since June 2009, and as Vice President and Divisional Merchandise Manager since 2003.

Mr. Barbarick joined the Company as a Buyer in 1998.

Chad M.

Frazell has served as Senior Vice President – Human Resources since August 2014.

Mr. Frazell previously served as Senior Vice President, Human Resources for Shopko Stores Operating Co., LLC from April 2011 until he joined the Company.

From 2008 to 2011, Mr. Frazell served as Vice President, Human Resources for Kohl’s Corporation, where he began as a Store Manager in 1999.

Prior to 1999, Mr. Frazell served as a Store Manager and Assistant Manager for Target Corporation.

Mr. Frazell began his career with Wal-Mart Stores, Inc., where he served as an Assistant Manager and Sales Associate.

The Company believes [removed: that] [added: that, based upon information currently available,] any estimated loss related to such matters has been adequately provided for in accrued liabilities to the extent probable and reasonably estimable.

However, litigation and other legal matters involve an element of uncertainty.

Future developments in such matters, including adverse decisions or settlements or resulting required changes to the Company’s business operations, could affect our consolidated operating results when resolved in future periods or could result in liability or other amounts material to the Company’s Consolidated Financial Statements.

[removed: 10-K 1 a2018q4form10-k.htm 10-K TRACTOR] [added: TRACTOR] SUPPLY [removed: COMPANY][added: COMPANY]

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: WASHINGTON,] [added: WASHINGTON,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

| [removed: ý] [added: ☒] | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended December [removed: 29, 2018][added: 28, 2019]

| [removed: o] [added: ☐] | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

[removed: ][added: ]

| Delaware | | [added: | | | |] 13-3139732 | [added: | |]

| (State or Other Jurisdiction of Incorporation or Organization) | | [added: | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 5401 Virginia Way, Brentwood, Tennessee | | [added: | | | |] 37027 | [added: | |]

| (Address of Principal Executive Offices) | | [added: | | | |] (Zip Code) | [added: | |]

| Registrant’s Telephone Number, Including Area Code: | | [added: | | | |] (615) 440-4000 | [added: | |]

| Title of each class | | [added: | | | | Trading Symbol(s) | | | | | |] Name of each exchange on which registered | [added: | |]

| Common Stock, $.008 par value | | [added: | | | | TSCO | | | | | |] NASDAQ Global Select Market | [added: | |]

[removed: YES þ NO o][added: Yes ☑ No ☐]

[removed: YES o NO þ][added: Yes ☐ No ☑]

| | [added: | |] Large accelerated filer | [removed: þ] | [added: | ☑ | | |] Accelerated filer | [removed: o] | [added: | ☐ | | |]

| | [added: | |] Non-accelerated filer | [removed: o] | [added: | ☐ | | |] Smaller reporting company | [removed: o] | [added: | ☐ | | |]

| | | | [added: | | | | | |] Emerging growth company | [removed: o] | [added: | ☐ | | |]

The aggregate market value of the Common Stock held by non-affiliates of the registrant, based on the closing price of the Common Stock on The NASDAQ Global Select Market on June [removed: 30, 2018,] [added: 29, 2019,] the last business day of the registrant’s most recently completed second fiscal quarter, was approximately [removed: $8.3] [added: $10.8] billion.

| Class | | [added: | | | |] Outstanding at January [removed: 26, 2019] [added: 25, 2020] | [added: | |]

| Common Stock, $.008 par value | | [removed: 121,279,792] | [added: | | | 117,282,010 | | |]

[removed: Documents] [added: Documents] Incorporated by [removed: Reference:][added: Reference:]

[removed: Portions] [added: Portions] of the Registrant’s definitive Proxy Statement for its [removed: 2019] [added: 2020] Annual Meeting of Stockholders are incorporated by reference into Part III [removed: hereof.][added: hereof.]

| [removed: Item no.] [added: Item no.] | | [removed: Form] [added: | | | | | | | Form] 10-K Report [removed: Page] [added: Page] | [added: | |]

| [Forward-Looking [removed: Statements](#s4052864627845E2FB240873F6FCACC9A)] [added: Statements](#i_0_10)] | | [removed: [ii](#s4052864627845E2FB240873F6FCACC9A)] | [added: | | | | | | [ii](#i_0_10) | | |]

| [PART [removed: I](#s40FF4FA4C32F5E04A1B06FC4AD59A9B1)] [added: I](#i_0_13)] | | [removed: [1](#s40FF4FA4C32F5E04A1B06FC4AD59A9B1)] | [added: | | | | | | [1](#i_0_13) | | |]

| [removed: [1.](#s03FDFF540CFD5E18B2C41152C6BC1AFF)] [added: [1.](#i_0_16)] | [removed: [Business](#s03FDFF540CFD5E18B2C41152C6BC1AFF)] | [removed: [1](#s03FDFF540CFD5E18B2C41152C6BC1AFF)] | [added: [Business](#i_0_16) | | | [1](#i_0_16) | | | | | |]

| [removed: [1A.](#s39DBBF1F2CDA540EA8855958C9D86718)] [added: [1A.](#i_0_19)] | [added: | |] [Risk [removed: Factors](#s39DBBF1F2CDA540EA8855958C9D86718)] [added: Factors](#i_0_19)] | [removed: [9](#s39DBBF1F2CDA540EA8855958C9D86718)] | [added: | [9](#i_0_19) | | | | | |]

| [removed: [1B.](#s6DF46C3960D45F998A5E0747B7A06ABC)] [added: [1B.](#i_0_22)] | [added: | |] [Unresolved Staff [removed: Comments](#s6DF46C3960D45F998A5E0747B7A06ABC)] [added: Comments](#i_0_22)] | [removed: [16](#s6DF46C3960D45F998A5E0747B7A06ABC)] | [added: | [17](#i_0_22) | | | | | |]

| [removed: [2.](#s14DA1C54B289575EBC91E5FEB87001AE)] [added: [2.](#i_0_25)] | [removed: [Properties](#s14DA1C54B289575EBC91E5FEB87001AE)] | [removed: [17](#s14DA1C54B289575EBC91E5FEB87001AE)] | [added: [Properties](#i_0_25) | | | [17](#i_0_25) | | | | | |]

| [removed: [3.](#sF3C407A09A9A5C4FBECA19DB4E6442D0)] [added: [3.](#i_0_28)] | [added: | |] [Legal [removed: Proceedings](#sF3C407A09A9A5C4FBECA19DB4E6442D0)] [added: Proceedings](#i_0_28)] | [removed: [18](#sF3C407A09A9A5C4FBECA19DB4E6442D0)] | [added: | [19](#i_0_28) | | | | | |]

| [removed: [4.](#s17E7E211505C5653A40C996E97E66646)] [added: [4.](#i_0_31)] | [added: | |] [Mine Safety [removed: Disclosures](#s17E7E211505C5653A40C996E97E66646)] [added: Disclosures](#i_0_31)] | [removed: [18](#s17E7E211505C5653A40C996E97E66646)] | [added: | [19](#i_0_31) | | | | | |]

| [PART [removed: II](#sB3D82DB68DB05C3A9CBBB505CCD30C59)] [added: II](#i_0_34)] | | [removed: [19](#sB3D82DB68DB05C3A9CBBB505CCD30C59)] | [added: | | | | | | [19](#i_0_34) | | |]

| [removed: [5.](#s0E1343A53B2F57C8A31A0E6CAD722457)] [added: [5.](#i_0_37)] | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#s0E1343A53B2F57C8A31A0E6CAD722457)] [added: Securities](#i_0_37)] | [removed: [19](#s0E1343A53B2F57C8A31A0E6CAD722457)] | [added: | [19](#i_0_37) | | | | | |]

| [removed: [6.](#sCA40E2A0D0535DAA8CCE1669DF6F4EC6)] [added: [6.](#i_0_40)] | [added: | |] [Selected Financial [removed: Data](#sCA40E2A0D0535DAA8CCE1669DF6F4EC6)] [added: Data](#i_0_40)] | [removed: [22](#sCA40E2A0D0535DAA8CCE1669DF6F4EC6)] | [added: | [22](#i_0_40) | | | | | |]

| [removed: [7.](#s98CBDAC4594F529C872A64964E03E5BE)] [added: [7.](#i_0_43)] | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s98CBDAC4594F529C872A64964E03E5BE)] [added: Operations](#i_0_43)] | [removed: [23](#s98CBDAC4594F529C872A64964E03E5BE)] | [added: | [23](#i_0_43) | | | | | |]

| [removed: [7A.](#sF40590FFD25B5EAD9878199581D2D4EC)] [added: [7A.](#i_0_70)] | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sF40590FFD25B5EAD9878199581D2D4EC)] [added: Risk](#i_0_70)] | [removed: [38](#sF40590FFD25B5EAD9878199581D2D4EC)] | [added: | [38](#i_0_70) | | | | | |]

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Yes ☑ No ☐

Yes ☑ No ☐

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Yes ☐ No ☑

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[Index](#i_0_7)

| | |

| --- | --- |

TRACTOR SUPPLY COMPANY

| | | |

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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[Index](#sEAD189C9FC1654E58BD83FD4B086B573)

At December [removed: 29, 2018,] [added: 28, 2019,] the Company operated [removed: 1,940] [added: 2,024] stores in 49 states [removed: (1,765] [added: (1,844] Tractor Supply and Del’s retail stores and [removed: 175] [added: 180] Petsense retail stores).

| [removed: State] [added: State] | | [removed: Number] [added: | | | | Number] of [removed: Stores] [added: Stores] | | [removed: State] | | [removed: Number] [added: | | State | | | | | | Number] of [removed: Stores] [added: Stores] | [added: | |]

| Texas | | [removed: 212] | | [added: | | 221 | | | | | |] Wisconsin | | [removed: 23] | [added: | | | 24 | | |]

| North Carolina | | [removed: 99] | | [removed: Colorado] | | [removed: 22] [added: 100] | [added: | | | | | Massachusetts | | | | | | 23 | | |]

| Pennsylvania | | [added: | | | |] 97 | | [added: | | | |] Maryland | | [removed: 22] | [added: | | | 23 | | |]

| Michigan | | [removed: 87] | | [added: | | 90 | | | | | |] New Hampshire | | [added: | | | |] 21 | [added: | |]

| New York | | [removed: 82] | | [added: | | 90 | | | | | |] New Jersey | | [removed: 19] | [added: | | | 21 | | |]

| Indiana | | [removed: 61] | | [added: | | 63 | | | | | |] North Dakota | | [added: | | | |] 14 | [added: | |]

| Virginia | | [removed: 59] | | [added: | | 63 | | | | | |] Minnesota | | [added: | | | |] 13 | [added: | |]

| Oklahoma | | [removed: 55] | | [added: | | 56 | | | | | |] South Dakota | | [added: | | | |] 9 | [added: | |]

| South Carolina | | [removed: 45] | | [added: | | 48 | | | | | |] Vermont | | [removed: 7] | [added: | | | 8 | | |]

| Missouri | | [added: | | | |] 30 | | [added: | | | |] Idaho | | [added: | | | |] 5 | [added: | |]

| New Mexico | | [added: | | | |] 29 | | [added: | | | |] Rhode Island | | [added: | | | |] 5 | [added: | |]

| West Virginia | | [added: | | | |] 28 | | [added: | | | |] Nevada | | [added: | | | |] 4 | [added: | |]

| Kansas | | [removed: 24] | | [added: | | 26 | | | | | |] Hawaii | | [added: | | | |] 2 | [added: | |]

| Washington | | [removed: 23] | | | | [added: 25] | [added: | | | | | | | | | | | | | |]

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

| [removed: Distribution] [added: Distribution] Facility [removed: Location] [added: Location] | | [removed: Approximate] [added: | | | | Approximate] Square [removed: Footage] [added: Footage] | | [removed: Owned/Leased Facility] | [added: | | | Owned/Leased Facility | | |]

| Frankfort, New York [removed: (a)] | | [added: | | | |] 924,000 | | [added: | | | |] Owned | [added: | |]

| Franklin, Kentucky | | [added: | | | |] 833,000 | | [added: | | | |] Owned | [added: | |]

| Pendleton, Indiana | | [added: | | | |] 764,000 | | [added: | | | |] Owned | [added: | |]

| Macon, Georgia | | [added: | | | |] 684,000 | | [added: | | | |] Owned | [added: | |]

| Waco, Texas | | [added: | | | |] 666,000 | | [added: | | | |] Owned | [added: | |]

| Casa Grande, Arizona | | [added: | | | |] 650,000 | | [added: | | | |] Owned | [added: | |]

| Hagerstown, Maryland [removed: (b)] [added: (a)] | | [added: | | | |] 482,000 | | [added: | | | |] Owned | [added: | |]

| Hagerstown, Maryland [removed: (b)] [added: (a)] | | [added: | | | |] 309,000 | | [added: | | | |] Leased | [added: | |]

| Waverly, Nebraska | | [added: | | | |] 592,000 | | [added: | | | |] Owned | [added: | |]

| Seguin, Texas [removed: (c)] [added: (b)] | | [added: | | | |] 71,000 | | [added: | | | |] Owned | [added: | |]

| Lakewood, Washington [added: (b)] | | [added: | | | |] 64,000 | | [added: | | | |] Leased | [added: | |]

| Longview, Texas [removed: (c)] [added: (b)] | | [added: | | | |] 63,000 | | [added: | | | |] Owned | [added: | |]

[removed: (b)] [added: (a)] The leased distribution center in Hagerstown is treated as an extension of the existing owned Hagerstown location and is not considered a separate distribution center.

[removed: (c)] [added: (b)] This is a mixing center designed to process certain high-volume bulk products.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Tennessee | | | | | | 97 | | | | | | Colorado | | | | | | 22 | | |

| Ohio | | | | | | 93 | | | | | | Illinois | | | | | | 22 | | |

| Georgia | | | | | | 92 | | | | | | Maine | | | | | | 21 | | |

| Florida | | | | | | 73 | | | | | | Connecticut | | | | | | 20 | | |

| Kentucky | | | | | | 71 | | | | | | Nebraska | | | | | | 18 | | |

| California | | | | | | 69 | | | | | | Utah | | | | | | 15 | | |

| Alabama | | | | | | 62 | | | | | | Oregon | | | | | | 10 | | |

| Louisiana | | | | | | 59 | | | | | | Iowa | | | | | | 9 | | |

| Mississippi | | | | | | 41 | | | | | | Wyoming | | | | | | 8 | | |

| Arkansas | | | | | | 38 | | | | | | Delaware | | | | | | 6 | | |

| Arizona | | | | | | 34 | | | | | | Montana | | | | | | 6 | | |

| | | | | | | | | | | | | | | | | | | 2,024 | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

[Index](#i_0_7)

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Tennessee | | 96 | | Massachusetts | | 22 |

| Ohio | | 92 | | Maine | | 21 |

| Georgia | | 86 | | Illinois | | 19 |

| Kentucky | | 70 | | Connecticut | | 18 |

| California | | 66 | | Nebraska | | 18 |

| Florida | | 65 | | Utah | | 15 |

| Alabama | | 58 | | Iowa | | 9 |

| Louisiana | | 53 | | Wyoming | | 8 |

| Mississippi | | 40 | | Montana | | 6 |

| Arkansas | | 36 | | Oregon | | 6 |

| Arizona | | 34 | | Delaware | | 5 |

| | | | | | | 1,940 |

| | | | | |

| --- | --- | --- | --- | --- |

(a) The Frankfort, New York, distribution center began receiving merchandise in fourth quarter of fiscal 2018, and is expected to begin shipping merchandise to stores in the first quarter of fiscal 2019.

The Company also leases approximately 8,000 square feet of building space for the Petsense corporate headquarters, located in Scottsdale, Arizona.

[removed: PART II][added: PART II]

[Index](#sEAD189C9FC1654E58BD83FD4B086B573)

| | |

| --- | --- |

| | [removed: Price Range] | | [added: Price Range] | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [removed: High] | | [removed: Low] [added: High] | | [removed: High] | | [removed: Low] | [added: | Low | | | | | | High | | | | | | Low | | | | | | | | | | | | | | | | | | | | |]

| First Quarter | [added: | | $98.58 | | | | | | $80.31 | | | | | |] $82.68 | | [added: | | | |] $58.78 | | [removed: $78.25] | | [removed: $67.70] | [added: | | | | | | | | | | | | | | | |]

| Second Quarter | [added: | | $109.67 | | | | | | $96.61 | | | | | |] $79.04 | | [added: | | | |] $58.27 | | [removed: $71.53] | | [removed: $52.09] | [added: | | | | | | | | | | | | | | | |]

| Third Quarter | [added: | | $114.25 | | | | | | $88.41 | | | | | |] $92.45 | | [added: | | | |] $74.93 | | [removed: $63.40] | | [removed: $49.87] | [added: | | | | | | | | | | | | | | | |]

| Fourth Quarter | [added: | | $99.37 | | | | | | $89.07 | | | | | |] $97.65 | | [added: | | | |] $78.67 | | [removed: $75.64] | | [removed: $54.76] | [added: | | | | | | | | | | | | | | | |]

As of [removed: February 1, 2019,] [added: January 25, 2020,] the number of record holders of our common stock was [removed: 571] [added: 519] (excluding individual participants in nominee security position listings), and the estimated number of beneficial holders of our common stock was approximately [removed: 220,000.][added: 240,000.]

[removed: Common] [added: Common] Stock [removed: Dividends][added: Dividends]

During [removed: 2018] [added: fiscal 2019] and [removed: 2017,] [added: 2018,] the Company’s Board of Directors declared the following cash dividends:

| [removed: Date Declared] [added: Date Declared] | | [removed: Dividend] [added: | | | | Dividend] Amount Per Share [added: of Common Stock] | | [removed: Stockholders of Record Date] | | [removed: Date Paid] | [added: | Record Date | | | | | | Date Paid | | |]

| November 7, 2018 | | [added: | | | |] $0.31 | | [added: | | | |] November 26, 2018 | | [added: | | | |] December 11, 2018 | [added: | |]

| August 8, 2018 | | [added: | | | |] $0.31 | | [added: | | | |] August 27, 2018 | | [added: | | | |] September 11, 2018 | [added: | |]

| May 9, 2018 | | [added: | | | |] $0.31 | | [added: | | | |] May 29, 2018 | | [added: | | | |] June 12, 2018 | [added: | |]

| February 7, 2018 | | [added: | | | |] $0.27 | | [added: | | | |] February 26, 2018 | | [added: | | | |] March 13, 2018 | [added: | |]

It is the present intention of the Company’s Board of Directors to continue to pay a quarterly cash dividend; however, the declaration and payment of future dividends will be determined by the Company’s Board of Directors in its sole discretion and will depend upon the earnings, financial condition, and capital needs of the Company, [removed: as well as] [added: along with any] other factors which the Company’s Board of Directors deem relevant.

On February [removed: 6, 2019,] [added: 5, 2020,] the Company’s Board of Directors declared a quarterly cash dividend of [removed: $0.31] [added: $0.35] per share of the Company’s [added: outstanding] common stock.

The dividend will be paid on March [removed: 12, 2019,] [added: 10, 2020,] to stockholders of record as of the close of business on February [removed: 25, 2019.][added: 24, 2020.]

[removed: [Index](#sEAD189C9FC1654E58BD83FD4B086B573)][added: [Index](#i_0_7)]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

The Company’s Board of Directors has authorized common stock repurchases under a share repurchase [removed: program of up to $3 billion, exclusive of any fees, commissions or other expenses related to such repurchases through December 31, 2020.][added: program.]

Stock purchase activity during fiscal [removed: 2018] [added: 2019] is set forth in the table below:

| [removed: Period] [added: Period] | | [removed: Total] [added: | | | | Total] Number of Shares [removed: Purchased] [added: Purchased] | | | [removed: Average] [added: | | | Average] Price Paid Per [removed: Share] [added: Share] | | | | [removed: Total] [added: | | Total] Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs] [added: Programs] | | | [removed: Maximum] [added: | | | Maximum] Dollar Value of Shares That May Yet Be Purchased Under the Plans or [removed: Programs] [added: Programs] | | |

| Fourth Quarter: (a) | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

(a) The total number of shares purchased and average price paid per share include shares withheld from vested stock awards to satisfy employees’ minimum statutory tax withholding requirements of [removed: 8,228] [added: 33,999] during the first quarter, [removed: 672] [added: 1,118] during the [added: second quarter, 6,381 during the] third quarter, and [removed: 8,231] [added: 288] during the fourth quarter.

Any additional stock repurchase programs will be subject to the discretion of our Board of Directors and [removed: subject to our results of operations,] [added: will depend upon earnings,] financial condition, [removed: cash requirements,] and [added: capital needs of the Company, along with any] other factors [removed: deemed relevant by our] [added: which the] Board of [removed: Directors.][added: Directors deem relevant.]

[removed: STOCK] [added: STOCK] PERFORMANCE [removed: GRAPH][added: GRAPH]

The following graph compares the cumulative total stockholder return on our common stock from December [removed: 28, 2013] [added: 27, 2014] to December [removed: 29, 2018] [added: 28, 2019] (the Company’s fiscal year-end), with the cumulative total returns of the S&P 500 Index and the S&P Retail Index over the same period.

The comparison assumes that $100 was invested on December [removed: 28, 2013,] [added: 27, 2014,] in our common stock and in each of the foregoing indices and in each case assumes reinvestment of dividends.

[removed: ][added: ]

| | | [removed: 12/28/2013] | | | | [removed: 12/27/2014] [added: 12/27/2014] | | | | [removed: 12/26/2015] | | [added: 12/26/2015] | | [removed: 12/31/2016] | | | | [removed: 12/30/2017] [added: 12/31/2016] | | | | [removed: 12/29/2018] | | [added: 12/30/2017] | [added: | | | | | 12/29/2018 | | | | | | 12/28/2019 | | |]

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| | | | 2019 | | | | | | | | | | | | | | | | | | 2018 | | | | | | | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| November 6, 2019 | | | | | | $0.35 | | | | | | November 25, 2019 | | | | | | December 10, 2019 | | |

| August 7, 2019 | | | | | | $0.35 | | | | | | August 26, 2019 | | | | | | September 10, 2019 | | |

| May 8, 2019 | | | | | | $0.35 | | | | | | May 28, 2019 | | | | | | June 11, 2019 | | |

| February 6, 2019 | | | | | | $0.31 | | | | | | February 25, 2019 | | | | | | March 12, 2019 | | |

| | | | | | | | | | | | | | | | | | | | | |

On May 8, 2019, the Company's Board of Directors authorized a $1.5 billion increase to the existing share repurchase program, bringing the total amount authorized since the inception of the program up to $4.5 billion, exclusive of any fees, commissions or other expenses related to such repurchases.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| First Quarter (a) | | | | | | 1,758,099 | | | | | | $ | 90.07 | | | | | 1,724,100 | | | | | | $ | 364,717,356 | |

| Second Quarter (a) | | | | | | 1,733,618 | | | | | | 103.27 | | | | | | 1,732,500 | | | | | | 1,685,822,720 | | |

| Third Quarter (a) | | | | | | 1,476,094 | | | | | | 105.95 | | | | | | 1,469,713 | | | | | | 1,530,099,430 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 9/29/19 - 10/26/19 | | | | | | 119,000 | | | | | | 93.12 | | | | | | 119,000 | | | | | | 1,519,019,236 | | |

| 10/27/19 - 11/23/19 | | | | | | 111,288 | | | | | | 96.43 | | | | | | 111,000 | | | | | | 1,508,316,429 | | |

| 11/24/19 - 12/28/19 | | | | | | 228,000 | | | | | | 94.55 | | | | | | 228,000 | | | | | | 1,486,763,173 | | |

| | | | | | | 458,288 | | | | | | 94.64 | | | | | | 458,000 | | | | | | 1,486,763,173 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| As of December 28, 2019 | | | | | | 5,426,099 | | | | | | $ | 98.99 | | | | | 5,384,313 | | | | | | $ | 1,486,763,173 | |

[Index](#i_0_7)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Tractor Supply Company | | | | | | $ | 100.00 | | | | | $ | 110.89 | | | | | $ | 99.25 | | | | | $ | 99.58 | | | | | $ | 112.55 | | | | | $ | 126.57 | |

| S&P 500 | | | | | | $ | 100.00 | | | | | $ | 100.77 | | | | | $ | 111.92 | | | | | $ | 136.35 | | | | | $ | 129.26 | | | | | $ | 171.88 | |

| S&P Retail Index | | | | | | $ | 100.00 | | | | | $ | 126.12 | | | | | $ | 133.60 | | | | | $ | 174.21 | | | | | $ | 195.19 | | | | | $ | 252.10 | |

[Index](#i_0_7)

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| --- | --- | --- | --- | --- | --- | --- | --- |

| | 2018 | | | | 2017 | | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| 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 |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| First Quarter (a) | | 2,375,075 | | | $ | 66.54 | | | 2,366,847 | | | $ | 712,278,077 | |

| Second Quarter | | 1,477,200 | | | 64.37 | | | | 1,477,200 | | | 617,214,452 | | |

| Third Quarter (a) | | 452,004 | | | 81.22 | | | | 451,332 | | | 580,564,002 | | |

| 09/30/18 – 10/27/18 | | 87,256 | | | 87.75 | | | | 87,256 | | | 572,909,246 | | |

| 10/28/18 – 11/24/18 | | 123,689 | | | 91.87 | | | | 123,000 | | | 561,612,001 | | |

| 11/25/18 – 12/29/18 | | 488,631 | | | 86.56 | | | | 481,089 | | | 520,006,956 | | |

| | | 699,576 | | | 87.65 | | | | 691,345 | | | 520,006,956 | | |

| As of December 29, 2018 | | 5,003,855 | | | $ | 70.17 | | | 4,986,724 | | | $ | 520,006,956 | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Tractor Supply Company | | $ | 100.00 | | | $ | 104.11 | | | $ | 115.45 | | | $ | 103.33 | | | $ | 103.67 | | | $ | 117.18 | |

| S&P 500 | | $ | 100.00 | | | $ | 115.76 | | | $ | 116.64 | | | $ | 129.55 | | | $ | 157.84 | | | $ | 149.63 | |

| S&P Retail Index | | $ | 100.00 | | | $ | 111.18 | | | $ | 140.22 | | | $ | 148.53 | | | $ | 193.68 | | | $ | 217.01 | |

| | |

| --- | --- |

[removed: FIVE] [added: FIVE] YEAR SELECTED FINANCIAL AND OPERATING [removed: HIGHLIGHTS] [added: HIGHLIGHTS] (a)(b)

| | [removed: 2018] | | [added: 2019] | | [removed: 2017] | | | | [removed: 2016] [added: 2018] | | | | [removed: 2015] | | [added: 2017] | | [removed: 2014] | | | [added: | 2016 | | | | | | 2015 | | | | | | | | |]

| | [added: | |] (52 weeks) | | | | [added: | |] (52 weeks) | | | | [removed: (53] [added: | | (52] weeks) | | | | [removed: (52] [added: | | (53] weeks) | | | | [added: | |] (52 weeks) | | | [added: | | | | | |]

| [removed: Operating Results:] [added: Operating Results:] | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Net sales | [added: | |] $ | [added: 8,351,931 | | | | | $ |] 7,911,046 | | | [added: | |] $ | 7,256,382 | | | [added: | |] $ | 6,779,579 | | | [added: | |] $ | 6,226,507 | | | [removed: $] | [removed: 5,711,715] | | [added: | |]

| Gross profit | [added: | | 2,871,770 | | | | | |] 2,702,528 | | | | [added: | |] 2,491,965 | | | | [added: | |] 2,325,202 | | | | [added: | |] 2,143,174 | | | | [removed: 1,950,415] | | | [added: | |]

| Selling, general and administrative expenses | [added: | | 1,932,572 | | | | | |] 1,823,440 | | | | [added: | |] 1,639,749 | | | | [added: | |] 1,488,164 | | | | [added: | |] 1,369,097 | | | | [removed: 1,246,308] | | | [added: | |]

| Depreciation and amortization | [added: | | 195,978 | | | | | |] 177,351 | | | | [added: | |] 165,834 | | | | [added: | |] 142,958 | | | | [added: | |] 123,569 | | | | [removed: 114,635] | | | [added: | |]

| Operating income | [added: | | 743,220 | | | | | |] 701,737 | | | | [added: | |] 686,382 | | | | [added: | |] 694,080 | | | | [added: | |] 650,508 | | | | [removed: 589,472] | | | [added: | |]

| Interest expense, net | [added: | | 19,843 | | | | | |] 18,352 | | | | [added: | |] 13,859 | | | | [added: | |] 5,810 | | | | [added: | |] 2,891 | | | | [removed: 1,885] | | | [added: | |]

| Income before income taxes | [added: | | 723,377 | | | | | |] 683,385 | | | | [added: | |] 672,523 | | | | [added: | |] 688,270 | | | | [added: | |] 647,617 | | | | [removed: 587,587] | | | [added: | |]

| Income tax expense | [added: | | 161,023 | | | | | |] 151,028 | | | | [added: | |] 249,924 | | | | [added: | |] 251,150 | | | | [added: | |] 237,222 | | | | [removed: 216,702] | | | [added: | |]

| Net income | [added: | |] $ | [added: 562,354 | | | | | $ |] 532,357 | | | [added: | |] $ | 422,599 | | | [added: | |] $ | 437,120 | | | [added: | |] $ | 410,395 | | | [removed: $] | [removed: 370,885] | | [added: | |]

| Net income per share – basic (c) | [added: | |] $ | [added: 4.70 | | | | | $ |] 4.34 | | | [added: | |] $ | 3.31 | | | [added: | |] $ | 3.29 | | | [added: | |] $ | 3.03 | | | [removed: $] | [removed: 2.69] | | [added: | |]

| Net income per share – diluted (c) | [added: | |] $ | [added: 4.66 | | | | | $ |] 4.31 | | | [added: | |] $ | 3.30 | | | [added: | |] $ | 3.27 | | | [added: | |] $ | 3.00 | | | [removed: $] | [removed: 2.66] | | [added: | |]

| Weighted average shares – diluted (c) | [added: | | 120,743 | | | | | |] 123,471 | | | | [added: | |] 128,204 | | | | [added: | |] 133,813 | | | | [added: | |] 136,845 | | | | [removed: 139,435] | | | [added: | |]

| Dividends declared per common share outstanding | [added: | |] $ | [added: 1.36 | | | | | $ |] 1.20 | | | [added: | |] $ | 1.05 | | | [added: | |] $ | 0.92 | | | [added: | |] $ | 0.76 | | | [removed: $] | [removed: 0.61] | | [added: | |]

| [removed: Operating] [added: Operating] Data (percent of net [removed: sales):] [added: sales):] | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Gross margin | [added: | | 34.4 | | % | | | |] 34.2 | | % | | [added: | |] 34.3 | | % | | [added: | |] 34.3 | | % | | [added: | |] 34.4 | | % | | [removed: 34.1] | | [removed: %] | [added: | |]

| Selling, general and administrative expenses | [added: | | 23.1 | | % | | | |] 23.0 | | % | | [added: | |] 22.6 | | % | | [added: | |] 22.0 | | % | | [added: | |] 22.0 | | % | | [removed: 21.8] | | [removed: %] | [added: | |]

| Operating income | [added: | |] 8.9 | | % | | [added: | | 8.9 | | % | | | |] 9.4 | | % | | [added: | |] 10.2 | | % | | [added: | |] 10.4 | | % | | [removed: 10.3] | | [removed: %] | [added: | |]

| Net income | [added: | |] 6.7 | | % | | [added: | | 6.7 | | % | | | |] 5.8 | | % | | [added: | |] 6.4 | | % | | [added: | |] 6.6 | | % | | [removed: 6.5] | | [removed: %] | [added: | |]

| [removed: Store,] [added: Store,] Sales, and Other [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Stores open at end of year | [added: | | 2,024 | | | | | |] 1,940 | | | | [added: | |] 1,853 | | | | [added: | |] 1,738 | | | | [added: | |] 1,488 | | | | [removed: 1,382] | | | [added: | |]

| Comparable store sales increase (d) | [added: | | 2.7 | | % | | | |] 5.1 | | % | | [added: | |] 2.7 | | % | | [added: | |] 1.6 | | % | | [added: | |] 3.1 | | % | | [removed: 3.8] | | [removed: %] | [added: | |]

| New store sales (as a % of net sales) (e) | [added: | | 2.8 | | % | | | |] 3.8 | | % | | [added: | |] 5.6 | | % | | [added: | |] 5.6 | | % | | [added: | |] 5.6 | | % | | [removed: 6.2] | | [removed: %] | [added: | |]

| Average transaction value | [added: | |] $ | [added: 46.89 | | | | | $ |] 45.85 | | | [added: | |] $ | 44.61 | | | [added: | |] $ | 44.42 | | | [added: | |] $ | 44.87 | | | [removed: $] | [removed: 44.84] | | [added: | |]

| Comparable store average transaction value increase (decrease) (c) | [added: | | 2.4 | | % | | | |] 2.8 | | % | | [added: | |] 0.5 | | % | | [removed: (0.9] | | [removed: )%] [added: (0.9)] | | [removed: (0.2] [added: %] | | [removed: )%] | | [removed: 0.6] [added: (0.2)] | | % | [added: | | | | | |]

| Comparable store average transaction count increase (d) | [added: | | 0.3 | | % | | | |] 2.2 | | % | | [added: | |] 2.2 | | % | | [added: | |] 2.6 | | % | | [added: | |] 3.3 | | % | | [removed: 3.2] | | [removed: %] | [added: | |]

| Total selling square footage (000’s) | [added: | | 30,854 | | | | | |] 29,571 | | | | [added: | |] 28,180 | | | | [added: | |] 26,511 | | | | [added: | |] 23,938 | | | | [removed: 22,176] | | | [added: | |]

| Total team members | [added: | | 33,500 | | | | | |] 30,500 | | | | [added: | |] 29,300 | | | | [added: | |] 26,000 | | | | [added: | |] 23,000 | | | | [removed: 21,100] | | | [added: | |]

| Capital expenditures (000’s) | [added: | |] $ | [added: 217,450 | | | | | $ |] 278,530 | | | [added: | |] $ | 250,401 | | | [added: | |] $ | 226,017 | | | [added: | |] $ | 236,496 | | | [removed: $] | [removed: 160,613] | | [added: | |]

| [removed: Balance] [added: Balance] Sheet Data (at end of [removed: period):] [added: period):] | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | |]

| Average inventory per store (f) | [added: | |] $ | [added: 751.3 | | | | | $ |] 766.8 | | | [added: | |] $ | 735.4 | | | [added: | |] $ | 741.7 | | | [added: | |] $ | 820.1 | | | [removed: $] | [removed: 752.7] | | [added: | |]

| Inventory turns | [added: | | 3.23 | | | | | |] 3.27 | | | | [added: | |] 3.24 | | | | [added: | |] 3.19 | | | | [added: | |] 3.23 | | | | [removed: 3.32] | | | [added: | |]

| Working capital [removed: (g)] | [added: | |] $ | [added: 540,287 | | | | | $ |] 856,292 | | | [added: | |] $ | 806,154 | | | [added: | |] $ | 740,615 | | | [added: | |] $ | 768,177 | | | [removed: $] | [removed: 670,897] | | [added: | |]

| Total assets [added: (g)] | [added: | |] $ | [added: 5,289,268 | | | | | $ |] 3,085,262 | | | [added: | |] $ | 2,868,769 | | | [added: | |] $ | 2,674,942 | | | [added: | |] $ | 2,370,826 | | | [removed: $] | [removed: 2,034,571] | | [added: | |]