Item 2. Properties

At December 31, 2022, the Company operated 2,333 stores in 49 states (2,066 Tractor Supply retail stores, 186 Petsense by Tractor Supply retail stores, and 81 Orscheln Farm and Home retail stores). The Company leases approximately 95% of its stores. Store leases typically have initial terms of between 10 and 20 years, with two to four optional renewal periods of five years each, exercisable at our option. No single lease is material to the Company’s operations. Approximately 59% of our stores are in freestanding buildings and 41% are located in shopping centers. The following is a count of store locations by state:

Index

The following is a list of distribution locations including the approximate square footage and if the location is leased or owned at December 31, 2022:

(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.

The Company’s Store Support Center occupies approximately 260,000 square feet of owned building space in Brentwood, Tennessee, and the Company’s Merchandising Innovation Center occupies approximately 32,000 square feet of leased building space in Nashville, Tennessee.

As part of the Orscheln Farm and Home transaction that closed on October 12, 2022, the Company acquired the Orscheln corporate headquarters and distribution center in Moberly, Missouri. These facilities are anticipated to be sold to Bomgaars Supply, Inc. during fiscal 2023. Refer to Note 3 to the Condensed Consolidated Financial Statements included under Part II, Item 8 of this Annual Report on Form 10-K.

On January 18, 2023, the Company opened its ninth distribution center located in Navarre, Ohio, which expanded the distribution center capacity by approximately 900,000 square feet. In addition, the Company is building a new distribution center in Maumelle, Arkansas and anticipates that the new facility will begin operations in the first quarter of 2024.

The Company also uses third-party operated import centers, mixing centers and pop-up distribution facilities which provide additional distribution capacity.