Tractor Supply Adds Accountants, Purchasing Pros in Bid to Lower Costs

With inflation on the rise, rural lifestyle retailer Tractor Supply Company has ramped up its cost-cutting efforts even as it celebrated continued net sales growth in its most recent earnings report last week, according to a Wall Street Journal report Tuesday (Feb. 1).

TSC has boosted its financial analysis team to 20 employees in the past year, up 40% in the past 12 months, and doubled the size of its indirect procurement group, which negotiates purchases for items not sold in stores, to 15 people, Chief Financial Kurt Barton said in the report.

The company sells products ranging from gardening and pet supplies to outdoor apparel and farm equipment. It has 150 finance-related employees among its 46,000 total workers. Plans are underway to double the size of the company’s financial planning team by the end of this year.

Barton has asked TSC’s procurement team to “go after a lot of our fixed costs, our occupancy costs, our supplies — everything that’s in there,” he said.

Costs for transportation, steel for fencing, corn for animal feed, petroleum for industrial lubricants were up 9% in the fourth quarter of the last fiscal year, Barton told WSJ, compared to their expectation of a 2% to 3% hike. TSC isn’t planning layoffs as part of its cost-cutting measures.

Tractor Supply expects to increase its net sales by 6% to 7% per year for the next five years and plans to operate at a margin of between 10.1% and 10.6% during that time.

“To be able to accomplish what we’re committing to, we’ve got to drive some savings,” Barton said in the WSJ report.

Related: Tractor Supply Company Looks Long Term, Updates ‘Life Out Here’ Strategy

During last week’s quarterly earnings update, TSC promised to improve customers’ in-store experience through service enhancements and a transformed staffing model, create personalized mobile offerings and make improvements to its supply chain capabilities as part of its “Life Out Here” strategy.