Tractor Supply Falls After Weakness in Oil Regions Hits Forecastby
Tractor Supply Co., which runs about 1,500 farm-gear and hardware stores in the rural U.S., fell the most in five years after weaker sales in oil-producing regions prompted the company to cut its forecast.
Profit will be $3.22 to $3.26 a share this year, the Brentwood, Tennessee-based company said in a statement after the close of regular trading on Wednesday. That’s down from Tractor Supply’s previous projection of as much as $3.40 and trails analysts’ $3.38 average estimate.
Tractor Supply’s sales are taking a hit as domestic energy producers cope with falling oil and natural gas prices by curtailing output at some less-profitable sites. U.S. oil production fell in eight of the nine months through June, the most recent period for which data is available. And Tractor Supply isn’t alone in bemoaning the trend. Signet Jewelers Ltd., which owns the Kay, Zales and Jared chains, slashed its profit forecast, saying demand in energy-dependent regions has been sluggish.
“The most pronounced decreases in our traffic and sales are in energy and agricultural communities,” Chief Executive Officer Greg Sandfort said in the statement. “With our customers generally being fiscally conservative, we believe many of them have responded to the economic uncertainty by reducing their purchasing patterns in some of our key geographic regions.”
The shares tumbled as much as 16 percent to $70.02 in New York, the biggest intraday decline since August 2011. Tractor Supply already had slid 2.3 percent this year through Wednesday.