1、Life Out Here2019 Annual ReportTractor Supply Company|2019 Annual ReportvntTRACTOR SUPPLYC!Anytime,Anywhere,Anyway:Our customers interact with us for our products and seasoned advice A Unique Understanding of Life Out Here:Knowledgeable team members;Products relevant to the lifestyle Cost Productivi
2、ty to Generate Strong Returns:Supply chain and logistics;Store labor efficiencies Driving Profitable Growth Building Customer-Centric Engagement Offering Relevant Products and Services Enhancing Our Core and Foundational Capabilities Team Member Engagement:Empower team members by developing their sk
3、ills and leadership Operational Efficiency:Support business capabilities through margin improvement and efficiencyWe Are Guided by Our Foundational StrengthsOur Strategic GoalsOur Goals in ActionHow We Meet Our Customers NeedsOur Mission and Values Our mission is to work hard,have fun and make money
4、 by providing legendary service and great products at everyday low prices.This mission is supported by a key set of valuesethics,respect,balance,winning attitude,communication,development,teamwork,change,initiative and accountabilitythat are the foundation of our culture and the guiding principles f
5、or how we conduct business.Our FocusTractor Supply is focused on being the most dependable supplier of relevant products and services for the lifestyle needs of recreational farmers and ranchers and all others who live the rural lifestyle.Tractor Supply customers are home,land,pet and livestock owne
6、rs that live a conservative and self-reliant lifestyle.They depend on us to have the products they need for Life Out Here.Our strategy is designed to provide a convenient shopping experience anytime,anywhere and in any way our customers choose.To learn more or shop online,visit TractorS and P.Tracto
7、r Supply is the largest rural lifestyle retailer in the United States.At December 28,2019,the Company operated 2,024 stores in 49 states,including 1,844 Tractor Supply stores and 180 Petsense pet specialty stores,and e-commerce websites at TractorS and P.About Tractor Supply1Tractor Supply Company|O
8、ur Stores68205493155714080609721902193589024139262279614523179146222321510106411311632213414146872121228568721820311051828119132421,844Tractor Supply Stores180Petsense Stores118%Store Count IncreaseOver 10 Years8In-Store Technology We continue to invest in infrastructure and process improvements whi
9、ch will support growth,scale,innovation and agility while improving the customer experience.We believe the continued convergence of our physical and digital storefronts and updates to our in-store and online capabilities are bringing value to our customers shopping experience.2|2019 Annual ReportTo
10、Our Stakeholders:“Tractor Supply had a heart.It had a vision.Joining Tractor Supply was like coming home.”This is what Jim Wright,CEO of Tractor Supply from 2004 to 2012,said about why he joined Tractor Supply in 2000.I feel the same way as Jim did nearly 20 years ago.It is a great honor to have bee
11、n named President and Chief Executive Officer of Tractor Supply in January of this year.Our Mission and Values are our secret sauce.Our mission is to“work hard,have fun and make money by providing legendary service and great products at everyday low prices.”This mission is supported by a key set of
12、valuesethics,respect,balance,winning attitude,communication,development,teamwork,change,initiative and account-ability.Combined they serve as the underpinnings of our culture and the guiding principles for how we conduct our business.We are deeply rooted in the lives of our team members,customers an
13、d communities.We equip a way of life we respect,love and often live ourselvesLife Out Here.This focus has been and will continue to be the foundation of our growth and source of value creation for our shareholders.We are uniquely positioned to become a more integral part of our customers lives.We ha
14、ve the opportunity to address the needs of our customer base better than anyone in this fragmented market.As we look forward,we see significant opportunities to broaden our customer reach and increase our market share as we enhance our product and service offerings,continue to grow our store base an
15、d expand our digital capabilities.On behalf of the more than 32,000 Tractor Supply team members,it is a privilege for me to update you on our highlights of fiscal 2019 and to review the opportunities ahead.Highlights of Fiscal 2019 In fiscal 2019,we delivered solid financial results:Net sales increa
16、sed by 5.6%to reach a record$8.35 billion.Comparable store sales increased 2.7%for the year with increases in both transaction count and average ticket.Diluted earnings per share was$4.66,representing growth of 8.1%.Cash flow from operations was$812 million,an increase of 16.9%.We returned$696 milli
17、on to shareholders through the combination of share repurchases and quarterly cash dividends throughout the year.We increased our quarterly cash dividend for shareholders by 12.9%to$0.35 per share,marking our ninth consecutive year of dividend increases.Our operational highlights for fiscal 2019 inc
18、lude:We opened 80 new Tractor Supply stores and 8 Petsense locations,increasing our selling square footage by nearly 5%and our store count to over 2,000 stores.The ramp up of our new distribution center in Frankfort,New York,was completed to support our store expansion in the Northeast Corridor of t
19、he country.We enhanced our Buy Online,Pick Up In-Store capability.We completed the rollout of our Stockyard in-store kiosk and Mobile Point of Sale technologies to all stores across the chain,which offers immediate in-store access to our online inventory of products and is another way we are offerin
20、g a retail experience that is relevant for our customers and goes beyond“e-commerce”alone.Our Neighbors Club Loyalty Program continued to experience robust growth with membership approaching nearly 15 million members as we exited the year.We enhanced our Private Label Credit Card program with a 5%ba
21、ck reward to our Neighbors Club members.Our online sales,once again,grew strong double-digits for the year as we continued to drive traffic and con-version from our ongoing investments in our digital capabilities.Looking ForwardAs we look to the future,you can expect Tractor Supply to keep investing
22、 and growing.We are committed to being the most dependable supplier of relevant products and services for the rural lifestyle,creating customer loyalty through personalized experiences and providing con-venience for Life Out Hereanytime,anywhere and in any way our customers choose.Our strategic focu
23、s will continue to be on our ability to exceed the ever-evolving expectations of our customers,positioning us for growth Message from Our President and CEOHal Lawton|President and Chief Executive Officer3Tractor Supply Company|19181716158.47.97.36.86.219181716152.75.12.71.63.1191817161547%Livestock&
24、Pet20%Seasonal,Gift&Toy8%Clothing&Footwear4%Agriculture21%Hardware,Tools&Truck19181716154.664.313.303.273.00696497503454396Our PerformanceWe are the largest rural lifestyle retailer in the United States,and each day we strive to provide our customers with legendary customer service,in-store and onli
25、ne.Net Sales($in Billions)Net Income Per Diluted Share($)Sales by Category in 2019Comparable Store Sales Increase(%)Cash Returned to Shareholders($in Millions)through market share gains and new stores,and to generate increased shareholder value for the long term.In 2020,our capital spending is alloc
26、ated across existing store initiatives,information technology projects,our supply chain and new stores.We will invest in our existing stores to keep them fresh and optimize their space productivity.Our technology investments include enabling our Neighbors Club program,rolling out a mobile app and up
27、grading our website.Our supply chain investments will expand the capacity and improve the productivity of our network.We plan to open approximately 80 new Tractor Supply stores and about 10 to 15 Petsense locations.With more than 2,000 stores complemented by our online sites,we have substantial scal
28、e,strong brand loyalty with our customers,an incredible culture and a business model that is supported by a strong balance sheet and signifi-cant cash flow generation.At Tractor Supply,we have a differentiated experience,a robust set of competencies,and are well-positioned to become an even more int
29、egral part of our customers lives.As a needs-based retailer,our authentic purpose to help our customers live life on their terms provides us with unique opportunities for growth.Thank You to Greg SandfortI would like to recognize and thank Greg Sandfort,our CEO for the last seven years.During his tw
30、elve years of service,the Company saw significant growth and shareholder value creation.Most importantly,Greg was a steward of our Companys Mission&Values and helped advance our culture as a true competitive advantage.Under Gregs leadership,its not just been what we do,but how we do it that has set
31、Tractor Supply apart.Gregs fingerprints have left an indelible mark on the Company,and he helped set the foundation for a strong future at Tractor Supply.Closing RemarksI would like to thank the Tractor Supply team members across the Company for their hard work,dedication and commitment to legendary
32、 customer service each and every day.I am excited about the prospects for Tractor Supply.We have tremendous opportunities in front of us,and we will pursue these opportunities with efficient allocation of resources.We look forward to updating you on the evolution of our business and our continued su
33、ccess.Thank you for your support and the confidence you have placed in Tractor Supply.Sincerely,Hal Lawton President and CEO4|2019 Annual ReportCorporate Responsibility and Doing the Right ThingOur VisionTractor Supply believes that a healthy environment,properly managed resources,and vibrant commun
34、ities are keys to a secure and prosperous future.The LifestyleWe are dedicated to helping create a healthy environment today and ensuring that the rural lifestyle we love is available for future generations.The EnvironmentWe continuously work to improve our environmental impact by reducing resource
35、consumption and waste,increasing efficiency,and providing alternatives to customers and team members wherever appropriate.The BusinessWe view sustainability to be a process of continuous improvement,offering opportunities to complement our business values.In addition to minimizing our impact on the
36、environment,many of our initiatives have the added benefit of reducing costs.Reducing costs enables us to continue to offer our customers everyday low prices,and becoming more efficient provides us with an opportunity to improve our returns to shareholders and provide good jobs for our team members.
37、Community SupportTo ensure we are helping the people we care most aboutour customers and team memberswe focus our corporate giving on four areas:In 2019,we made great progress with our recycling programs:138 Millionkilowatt hours saved through energy management system88,544 Gallonsof oil collected f
38、rom customers for recycling3.3 Millionwood pallets recycled17,560 Tonsof cardboard recycled2025 Goal:To reduce our Scope 1 and 2 carbon emission equivalents from our facilities by 25 percent by 2025 from the 2015 baseline.To learn more about what Corporate Responsibility means to Tractor Supply,visi
39、t Corporate.TractorS and AnimalCommunityVeterans Causes 0 2019 Form 10-KLife Out HerevntTRACTOR SUPPLYC!UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended D
40、ecember 28,2019 orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from_to_.Commission file number 000-23314TRACTOR SUPPLY COMPANY(Exact name of registrant as specified in its charter)Delaware13-3139732(State or Other Jurisdiction ofInc
41、orporation or Organization)(I.R.S.Employer Identification No.)5401 Virginia Way,Brentwood,Tennessee37027(Address of Principal Executive Offices)(Zip Code)Registrants Telephone Number,Including Area Code:(615)440-4000Securities Registered Pursuant to Section 12(b)of the Act:Title of each classTrading
42、 Symbol(s)Name of each exchange on which registeredCommon Stock,$.008 par valueTSCONASDAQ Global Select MarketSecurities Registered Pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Ind
43、icate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 1
44、2 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements forthe past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pur
45、suant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a
46、 smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act:Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting company
47、Emerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whethe
48、r the registrant is a shell company(as defined in Rule 12b-2 of the Act.)Yes No 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 NASDAQGlobal Select Market on June 29,2019,the last business day of the regist
49、rants most recently completed second fiscal quarter,was approximately$10.8 billion.For purposes of this response,the registrant has assumed that its directors,executive officers,and beneficial owners of 5%or more of itsCommon Stock are affiliates of the registrant.Indicate the number of shares outst
50、anding of each of the registrants classes of common stock as of the latest practicable date.ClassOutstanding at January 25,2020Common Stock,$.008 par value117,282,010Documents Incorporated by Reference:Portions of the Registrants definitive Proxy Statement for its 2020 Annual Meeting of Stockholders
51、 are incorporated by reference into Part III hereof.YmTRACTOR l SUPPLYC!Item no.Form 10-K Report PageForward-Looking StatementsiiPART I11.Business11A.Risk Factors91B.Unresolved Staff Comments172.Properties173.Legal Proceedings194.Mine Safety Disclosures19PART II195.Market for Registrants Common Equi
52、ty,Related Stockholder Matters,and Issuer Purchases of Equity Securities196.Selected Financial Data227.Managements Discussion and Analysis of Financial Condition and Results of Operations237A.Quantitative and Qualitative Disclosures About Market Risk388.Financial Statements and Supplementary Data399
53、.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure729A.Controls and Procedures729B.Other Information72PART III7210.Directors,Executive Officers,and Corporate Governance7211.Executive Compensation7312.Security Ownership of Certain Beneficial Owners and Management an
54、d Related Stockholder Matters7313.Certain Relationships and Related Transactions,and Director Independence7314.Principal Accountant Fees and Services73PART IV7415.Exhibits and Financial Statement Schedules7416.Form 10-K Summary74iFORWARD-LOOKING STATEMENTS OR INFORMATIONThis Form 10-K and statements
55、 included or incorporated by reference in this Form 10-K include certain historical and forward-looking information.The forward-looking statements included are made pursuant to the safe harbor provisions of the PrivateSecurities Litigation Reform Act of 1995(the“Act”).All statements,other than state
56、ments of historical facts,which addressactivities,events or developments that we expect or anticipate will or may occur in the future,including such things as futurecapital expenditures(including their amount and nature),business strategy,expansion and growth of the business operationsand other such
57、 matters are forward-looking statements.To take advantage of the safe harbor provided by the Act,we areidentifying certain factors that could cause actual results to differ materially from those expressed in any forward-lookingstatements,whether oral or written.These factors include,without limitati
58、on,national,regional and local economic conditionsaffecting consumer spending,weather conditions,the seasonal nature of the business,the timing and acceptance of newproducts in the stores,the timing and mix of goods sold,purchase price volatility(including inflationary and deflationarypressures),the
59、 ability to increase sales at existing stores,the failure to realize anticipated benefits of our investments intechnology,infrastructure,and digital and omni-channel capabilities,the ability to manage growth and identify suitablelocations,failure of an acquisition to produce anticipated results,the
60、ability to successfully manage expenses and execute keygross margin enhancing initiatives,increases in fuel,carrier and other transportation costs,increases in wages due tocompetitive pressures or minimum wage laws and regulations,the availability of favorable credit sources,capital marketconditions
61、 in general,the ability to open new stores in the manner and number currently contemplated,the impact of new storeson the business,competition,including competition from online retailers,effective merchandising and marketing initiatives,theability to retain vendors,reliance on foreign suppliers,the
62、ability to attract,train and retain qualified employees,productliability and other claims,changes in federal,state or local regulations,potential judgments,fines,legal fees and other costs,breach of information systems or theft of employee or customer data,ongoing and potential future legal or regul
63、atoryproceedings,management of the Companys information systems,failure to develop and implement new technologies,thefailure of customer-facing technology systems,business disruption resulting from a natural or other disaster or implementationof new technologies,including but not limited to,new supp
64、ly chain technologies,effective tax rate changes,including expectedeffects of the Tax Cuts and Jobs Act,and results of examination by taxing authorities,the imposition of tariffs on importedproducts or the disallowance of tax deductions on imported products,the ability to maintain an effective syste
65、m of internalcontrol over financial reporting,changes in accounting standards,assumptions and estimates,and those described in Item 1A.“Risk Factors.”Forward-looking statements are based on currently available information and are based on our currentexpectations and projections about future events.W
66、e undertake no obligation to release publicly any revisions to theseforward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipatedevents.Indexii-PART IItem 1.BusinessOverviewTractor Supply Company(the“Company”or“we”or“our”or“us”)is t
67、he largest rural lifestyle retailer in the United States(“U.S.”).The Company is focused on supplying the needs of recreational farmers,ranchers,and all those who enjoy living therural lifestyle(which we refer to as the“Out Here”lifestyle),as well as tradesmen and small businesses.We operate retailst
68、ores under the names Tractor Supply Company,Dels Feed&Farm Supply,and Petsense and operate websites under thenames TractorS and P.Our stores are located primarily in towns outlying major metropolitan marketsand in rural communities.The Company has one reportable industry segment which is the retail
69、sale of products that support the rural lifestyle.AtDecember 28,2019,we operated 2,024 retail stores in 49 states(1,844 Tractor Supply and Dels retail stores and 180 Petsenseretail stores).Our Tractor Supply stores typically range in size from 15,000 to 20,000 square feet of inside selling space,alo
70、ngwith additional outside selling space,and our Petsense stores have approximately 5,500 square feet of inside selling space.ForTractor Supply retail locations,we use a standard design for most new built-to-suit locations that includes approximately15,500 square feet of inside selling space.Our onli
71、ne selling websites are positioned to offer an extended assortment ofproducts beyond those offered in-store and drive traffic into our stores through our buy online and pickup in-store and ship tostore programs.Business StrategyWe believe our sales and earnings growth is the result of executing our
72、business strategy,which includes the following keycomponents:Market NicheWe have identified a specialized market niche:supplying the lifestyle needs of recreational farmers,ranchers,and all those whoenjoy living the rural lifestyle,as well as tradesmen and small businesses.By focusing our product as
73、sortment on these corecustomers,we believe we are differentiated from general merchandise,home center,and other specialty retailers.We cater tothe rural lifestyle and often serve a market by being a trip consolidator for many basic maintenance needs for farm,ranch,andrural customers through convenie
74、nt shopping options both in-store and online.CustomersOur target customers are home,land,pet,and livestock owners who generally have above average income and below averagecost of living.We seek to serve a customer base that primarily lives in towns outlying major metropolitan markets and in ruralcom
75、munities.This customer base includes recreational farmers,ranchers,and all those who enjoy living the rural lifestyle,aswell as tradesmen and small businesses.Customer ServiceWe are committed to providing our customers reliable product availability and a convenient,customer-centric experience across
76、shopping channels.In our stores,we believe the ability of our motivated,well-trained team members to provide friendly,responsive and seasoned advice helps our customers find the right products to satisfy their everyday needs,as well as thespecialty items needed to complete their rural lifestyle proj
77、ects.We also engage with our customers through our e-commercewebsite(TractorS),which provides the opportunity to allow customers to shop at anytime,anywhere,and in any waythey choose,while delivering enhanced product information,research,and decision tools that support product selection andinformati
78、onal needs in specific subject areas.Additionally,we maintain a Customer Solutions Center at our Store SupportCenter located in Brentwood,Tennessee,to support our in-store and online customers,as well as our store team members.Webelieve this commitment to customer service promotes strong customer lo
79、yalty through personalized experiences and providesconvenience that our customers expect,which drives repeat shopping experiences.Index1We use a third-party provider to survey and measure our level of customer service.This process allows customers to providefeedback on their shopping experience.Base
80、d on the third-party providers data,we believe our customer satisfaction scoresare among the best-in-class.We carefully evaluate the feedback we receive from our customers and implement improvementsat both the Company and the individual store level based on that feedback.Store Personnel and Training
81、We seek to hire store team members who live and appreciate the Out Here lifestyle,including those with farming andranching backgrounds,with particular emphasis on general maintenance,equine,and welding.We endeavor to staff our storeswith courteous,highly motivated team members and devote considerabl
82、e resources to training store team members,often incooperation with our vendors.Our training programs include:A thorough on-boarding process to prepare new team members for their new role;Productive workplace environment training that is intended to educate team members on company policies and proce
83、dures covering topics such as harassment,discrimination,and retaliation;New store opening training that prepares our store managers to open new stores to Company standards;A management training program which covers all aspects of our store operations,delivering superior service,and managing the team
84、 member experience;Structured training on customer service and selling skills;Online product knowledge training produced in conjunction with key vendors;Leadership development programs that prepare leaders to expand their current contributions;andAn annual store manager meeting with vendor product p
85、resentations.Store EnvironmentOur stores are designed and managed to make shopping an enjoyable experience and to maximize sales and operatingefficiencies.Stores are strategically arranged to provide an open environment for optimal product placement and visual display.In addition,these layouts allow
86、 for departmental space to be easily reallocated and visual displays to be changed for seasonalproducts and promotions.Display and product placement information is routinely sent to stores to ensure quality anduniformity among the stores.Our store layouts and visual displays are designed to provide
87、our customers a feeling offamiliarity and convenience to enhance the shopping experience.Informative signs are located in key product categories toconveniently assist customers with purchasing decisions and merchandise location.These signs provide customers with acomparison of product qualities,clea
88、r pricing,useful information regarding product benefits,and suggestions for appropriateaccessories.Also,our store team members wear highly visible red vests,aprons,or smocks with nametags,and our customerservice and checkout counters are conveniently located near the front of the store.Merchandising
89、 and PurchasingWe offer an extensive assortment of products for all those seeking to enjoy the“Out Here”lifestyle,as well as tradesmen andsmall businesses.Our product assortment is tailored to meet the needs of our customers in various geographic markets.Ourfull line of product offerings includes a
90、broad selection of high quality,reputable brand name and exclusive brand products andis supported by a strong in-stock inventory position with approximately 15,500 to 20,000 products per store as well as over125,000 products online.No single product accounted for more than 10%of our sales during fis
91、cal 2019.Our comprehensiveselection of merchandise is comprised of the following major product categories:Equine,livestock,pet,and small animal products,including items necessary for their health,care,growth,and containment;Hardware,truck,towing,and tool products;Seasonal products,including heating,
92、lawn and garden items,power equipment,gifts,and toys;Work/recreational clothing and footwear;andMaintenance products for agricultural and rural use.Index2-The following table indicates the percentage of net sales represented by each of our major product categories during fiscal 2019,2018,and 2017:Pe
93、rcent of Net SalesFiscal YearProduct Category:201920182017Livestock and Pet47%47%47%Hardware,Tools and Truck212222Seasonal,Gift and Toy Products201919Clothing and Footwear888Agriculture444Total100%100%100%Our buying team continuously reviews and updates our product assortment to respond to customer
94、needs and to offer new,relevant products.We are focused on providing key products that our customers use on a regular basis for their lifestyle andmaintenance needs with emphasis on consumable,usable,and edible(“C.U.E.”)products.Examples of C.U.E.productcategories include,but are not limited to,live
95、stock feed and bedding,pet food,lubricants,and various seasonal products,suchas heating,pest control,and twine.Our products are sourced through both domestic and international vendors,each of whom adhere to a code of conduct thatguides our relationship.Our business is not dependent upon any single v
96、endor or particular group of vendors.We purchase ourproducts from a group of approximately 975 vendors,with no one vendor representing more than 10%of our purchases duringfiscal 2019.Approximately 375 core vendors accounted for 90%of our merchandise purchases during fiscal 2019.We havenot experience
97、d any significant difficulty in obtaining satisfactory alternative sources of supply for our products,and we believethat adequate sources of supply exist at substantially similar costs for nearly all of our products.We have no material long-termcontractual commitments with any of our product vendors
98、.Our buying teams focus on merchandise procurement,vendor line reviews,and testing of new products and programs.We alsoemploy a dedicated inventory management team that focuses exclusively on forecasting and inventory replenishment,acommitted merchandise planning team that concentrates on assortment
99、 planning,and a specialized pricing team that seeks tooptimize market-specific pricing for our products.Through the combined efforts of these teams,we continue to focus onimproving our overall inventory productivity and in-stock inventory position.Intellectual PropertyOur subsidiary,Tractor Supply C
100、o.of Texas,LP(“TSCT”),owns registrations with the U.S.Patent and Trademark Office(“USPTO”)for various service marks including TSC,Tractor Supply Co.,TSC Tractor Supply Co.,and the trapeziumdesign for retail services.We consider these service marks,and the accompanying goodwill and name recognition,t
101、o bevaluable assets of our business.TSCT also owns several other service marks for retail services,some of which have beenregistered with the USPTO and some of which are the subject of applications for registration pending before the USPTO.In addition to selling products that bear nationally-known m
102、anufacturer brands,we also sell products manufactured for us undera number of exclusive brands that we consider to be important to our business.These exclusive brands are manufactured for usby a number of vendors and provide an alternative to the national brands,which helps provide value for our cus
103、tomers andpositions us as a destination retailer.Index3Our exclusive brands represented approximately 31%of our total sales in fiscal 2019 and 2018,respectively,and 32%of ourtotal sales in fiscal 2017.Our exclusive brands include:4health(pet foods and supplies)Producers Pride(livestock and horse fee
104、d and supplies)Bit&Bridle(apparel and footwear)Red Shed(gifts,collectibles,and outdoor furniture)Blue Mountain(apparel)Redstone(heating products)C.E.Schmidt(apparel and footwear)Retriever(pet foods and supplies)Countyline(livestock,farm and ranch equipment)Ridgecut(apparel)Dumor(livestock and horse
105、feed and supplies)Royal Wing(bird feed and supplies)Groundwork(lawn and garden supplies)Traveller(truck and automotive products)Huskee(outdoor power equipment)Treeline(hunting gear and accessories)JobSmart(tools)TSC Tractor Supply Co(trailers,truck tool boxes,and animalbedding)Paws&Claws(pet foods a
106、nd supplies)Untamed(pet foods)The exclusive brands identified above have been registered as trademarks with the USPTO for certain products and are thesubject of applications for registration pending before the USPTO for other products.Our trademark and service mark registrations have various expirat
107、ion dates;however,provided that we continue to use themarks and renew the registrations in a timely manner,the registrations are potentially perpetual in duration.We believe our intellectual property,which includes the trademarks and service marks identified above,together with certaintrade names,do
108、main names,patents,and copyrights,has significant value and is an important component of our merchandisingand marketing strategies.DistributionWe currently operate a distribution facility network for supplying stores with merchandise and delivering product orderedthrough TractorS.In fiscal 2019,our
109、Tractor Supply stores received approximately 74%of merchandise through thisnetwork while the remaining merchandise shipped directly from our vendors to our stores or customers.We believe this flowfacilitates the prompt and efficient distribution of merchandise in order to enhance in-stock inventory
110、positions,minimizefreight expense,and improve the inventory turn rate.Our distribution facilities,located in Arizona,Georgia,Indiana,Kentucky,Maryland,Nebraska,New York,Texas,and Washington represent a total distribution capacity of 6.1 million squarefeet.We also use third-party operated import cent
111、ers and mixing centers which provide additional distribution capacity.Infiscal 2019,we completed and began shipping operations at our new northeast distribution center in Frankfort,New York.We select the locations of our distribution facilities in an effort to minimize logistical costs and optimize
112、the distance fromdistribution facilities to our stores.Our distribution centers utilize warehouse and labor management tools that support theplanning,control,and processing of inventory.We manage our inbound and outbound transportation activity in-house throughthe use of a transportation management
113、system.We utilize multiple common carriers for store and direct to customerdeliveries.We manage our transportation costs through carrier negotiations,monitoring of transportation routes,andscheduling of deliveries.MarketingWe utilize an“everyday value price”philosophy to consistently offer our produ
114、cts at competitive prices complemented bystrategically planned promotions throughout the year.To drive store traffic and position ourselves as a destination retailer,wepromote a broad selection of merchandise through various digital and social media initiatives,newspaper circulars,customertargeted d
115、irect mail,and direct e-mail,as well as limited television,radio,and other limited media channels.In addition,ourNeighbors Club loyalty program enhances our ability to create engagement with our best customers.Vendors frequentlysupport these specific programs by offering temporary cost reductions an
116、d honoring coupons.Our vendors also provideassistance with product presentation and fixture design,brochures,support for in-store events,point-of-purchase materials forcustomer education,and product knowledge for our team members.Index4Omni-ChannelThe customer is our singular focus and our priority
117、is ensuring they can engage with us in the most convenient manner for themwhether in our stores,on our website,or via our Customer Solutions Center.Our goal is to be available anytime,anywhere,and in any way our customers choose to engage with our brand.We provide our customers the opportunity to sh
118、op in a mannerthat fits their lifestyle and is most convenient for them.Our focus is on delivering a comprehensive mobile experience whilemaintaining a straight-forward shopping experience to further offer the convenience our customers need.We offer a buy onlineand pick up in-store program which pro
119、vides convenient access for customers to pick up merchandise from our store locations.Additionally,our online experience offers an expansive product assortment including a direct to consumer assortment extendingour aisles beyond our store locations as well as convenient and useful content that is re
120、levant to their lifestyle.We provide ourcustomers the ability to have products shipped directly to our retail store locations or to their homes or offices.We use ourdistribution facility network to support our e-commerce activities.Our digital capabilities have further enhanced our in-storeshopping
121、and customer service experience,allowed us to engage with our customers anytime,anywhere,and in any way theychoose,and expanded our target markets outside of our current retail store locations.Management and Team MembersAs of December 28,2019,we employed approximately 16,000 full-time and 16,000 par
122、t-time Tractor Supply team members.We typically employ additional part-time team members throughout the year during high sales volume periods.We are notparty to any collective bargaining agreements.Our store operations are organized into regions,each of which is led by a regional vice president.The
123、region is furtherorganized into districts,each of which is led by a district manager.We have two internal advisory boards,one comprised ofstore managers and the other comprised of district managers.These groups bring a grassroots perspective to operationalinitiatives and generate chain-wide endorsem
124、ent of proposed best-practice solutions.All of our team members participate in one of our various bonus incentive programs,which provide the opportunity to receiveadditional compensation based upon team and/or Company performance.In addition to bonus incentive programs,we provideour eligible team me
125、mbers the opportunity to participate in an employee stock purchase plan and a 401(k)retirement savingsplan.We also share in the cost of health insurance provided to eligible team members,and team members receive a discount onmerchandise purchased from the Company.We encourage a promote-from-within e
126、nvironment when internal resources permit.We also provide internal leadershipdevelopment programs designed to prepare our high-potential team members for greater responsibility.Our current team ofdistrict managers and store managers have an average tenure of approximately nine and six years,respecti
127、vely.We believeinternal promotions,coupled with the hiring of individuals with previous retail experience,will provide the managementstructure necessary to support our long-term strategic growth initiatives.Continuous ImprovementWe are committed to a continuous improvement program to drive change th
128、roughout our organization.Using data analyticsand team member engagement,we examine business processes and identify opportunities to reduce costs,drive innovation,andimprove effectiveness.We have implemented numerous continuous improvement projects,with team members from multipleareas of our busines
129、s,to evaluate key operations and implement process change.Team members are empowered and expectedto challenge current paradigms and improve processes.Management encourages the participation of all team members in thedecision-making process,regularly solicits input and suggestions from our team membe
130、rs,and incorporates suggestions intoour improvement activities.Management Information and Control SystemsWe have invested resources in management information and control systems to provide legendary customer service and todeliver the right products in the right place at the right time.This includes
131、use of digital technologies to integrate the customerexperience in-store,online,and through our Customer Solutions Center,which offers customers the ability to shop anytime,anywhere,and in any way they choose.Our key platforms include:Point-of-sale system;In-store mobility;E-commerce platform;Index5
132、-Replenishment and allocation systems;Merchandising presentation and inventory management tools;Warehouse and transportation management systems;Labor management tools for stores and supply chain;Price optimization system;Vendor purchase order control system;Business intelligence and analytics tools;
133、and Customer loyalty system.These systems are integrated through an enterprise resource planning(“ERP”)system.This ERP system tracks merchandisefrom initial order through ultimate sale and interfaces with our financial systems.We continue to invest in technology to support store,online,and distribut
134、ion facility expansion and our long-term strategicgrowth initiatives focused heavily on improving the customer experience across all channels.We also continue to evaluate andimprove the functionality of our systems to maximize their effectiveness.Such efforts include ongoing hardware and softwareeva
135、luations,refreshes,and upgrades to support optimal software configurations,and application performance.We plan tocontinue to invest in information technology and implement efficiency-driving system enhancements.We will continue toevaluate the use of technologies to improve productivity such as artif
136、icial intelligence,automation software,quantumcomputing,and other technologies.We also maintain and continue to strengthen the security of our information systems tohelp protect and prevent unauthorized access to personal information of our customers,employees,vendors,and otherconfidential Company d
137、ata as well as ensuring that we adhere to industry privacy laws and standards.Collectively,theseefforts are directed toward improving business processes,maintaining secure,efficient,and stable systems,and enabling thecontinued growth and success of our business.PetsensePetsense is a small-box pet sp
138、ecialty supply retailer focused on meeting the needs of pet owners,primarily in small and mid-sized communities,and offering a variety of pet products and services.At December 28,2019,we operated a total of 180Petsense stores in 26 states,with approximately 500 full-time and 1,000 part-time team mem
139、bers,and an e-commerce website(P).Petsense owns a registration trademark for its exclusive brand,TrueSourcepet food,and the Petsense name isregistered with the USPTO.Growth StrategyTractor Supply Company believes we can grow our business by being the most dependable supplier of relevant products and
140、services for the“Out Here”lifestyle,creating customer loyalty through personalized experiences,and providing conveniencethat our customers expect at anytime,anywhere,and in any way they choose.Our long-term growth strategy is to:(1)driveprofitable growth through new store openings and by expanding o
141、mni-channel capabilities,thus tying together our websiteproduct content,social media,digital,and online shopping experience,attracting new customers and driving loyalty,(2)buildcustomer-centric engagement by leveraging analytics to deliver legendary customer service,seasoned advice,and personalizede
142、xperiences,(3)offer relevant assortments and services across all channels through exclusive and national brands and continueto introduce new products and services through our test and learn strategy,(4)enhance our core and foundational capabilities byinvesting in infrastructure and process improveme
143、nts which will support growth,scale,and agility while improving thecustomer experience,and(5)expand through selective acquisitions,as such opportunities arise,to add complementarybusinesses and to enhance penetration into new and existing markets to supplement organic growth.Achieving this strategy
144、will require a foundational focus on:(1)organizing,optimizing,and empowering our team members forgrowth by developing skills,talent,and leadership across the organization,and(2)implementing operational efficiencyinitiatives,including leverage of technology and automation,to align our cost structure
145、to support new business capabilities formargin improvement and cost reductions.Over the past five years,we have experienced considerable sales growth,resulting in a compounded annual growth rate ofapproximately 7.9%.We plan to open approximately 80 new Tractor Supply and 10 to 15 new Petsense stores
146、 in fiscal 2020,aselling square footage increase of approximately 4.5%.In fiscal 2019,we opened 80 new Tractor Supply stores and 8 newPetsense stores.In fiscal 2018,we opened 80 new Tractor Supply stores and 18 new Petsense stores.This represents a sellingsquare footage increase of approximately 4.3
147、%during fiscal 2019 and 4.9%during fiscal 2018.Index6At December 28,2019,we operated 2,024 retail stores in 49 states(1,844 Tractor Supply and Dels retail stores and 180Petsense retail stores).Given the size of the communities that we target,we believe that there is ample opportunity for newstore gr
148、owth in many existing and new markets.We have developed a proven method for selecting store sites and haveidentified over 600 additional markets for new Tractor Supply stores.We also believe that there is opportunity for up to 1,000Petsense stores.Approximately 55%of our stores are in freestanding b
149、uildings and 45%are located in strip shoppingcenters.We lease approximately 94%of our stores and own the remaining 6%.CompetitionWe operate in a competitive retail industry.The principal competitive factors include location of stores,fulfillment options,price,quality of merchandise,in-stock inventor
150、y consistency,merchandise assortment and presentation,product knowledge,online competitors,and customer service.We compete with general merchandise retailers,home center retailers,pet retailers,specialty and discount retailers,independently owned retail farm and ranch stores,numerous privately-held
151、regional farm storechains and farm cooperatives,as well as internet-based retailers.However,we believe we successfully differentiate ourselvesfrom many of these retailers by focusing on our specialized market niche for customers living the rural lifestyle.See furtherdiscussion of competition in 1A.“
152、Risk Factors”of this Annual Report on Form 10-K.Seasonality and WeatherOur business is seasonal.Historically,our sales and profits are the highest in the second and fourth fiscal quarters due to thesale of seasonal products.We experience our highest inventory and accounts payable balances during our
153、 first fiscal quarter forpurchases of seasonal products to support the higher sales volume of the spring selling season,and again during our third fiscalquarter to support the higher sales volume of the cold-weather selling season.We believe that our business can be moreaccurately assessed by focusi
154、ng on the performance of the halves,not the quarters,due to the fact that different weather patternsfrom year-to-year can shift the timing of sales and profits between quarters,particularly between the first and second fiscalquarters and the third and fourth fiscal quarters.Historically,weather cond
155、itions,including unseasonably warm weather in the fall and winter months and unseasonably coolweather in the spring and summer months,have affected the timing and volume of our sales and results of operations.Inaddition,extreme weather conditions,including snow and ice storms,flood and wind damage,h
156、urricanes,tornadoes,extremerain,and droughts have impacted operating results both negatively and positively,depending on the severity and length of theseconditions.Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize onseasonal demand trends.
157、Stewardship and Compliance with Environmental MattersOur operations are subject to numerous federal,state,and local laws and regulations,enacted or adopted,regulating thedischarge of materials into the environment or otherwise relating to the protection of the environment.We are committed tocomplyin
158、g with all applicable environmental laws and regulations.We are also committed to becoming a moreenvironmentally sustainable company.This commitment is demonstrated through our Stewardship Program,which is ourenvironmental sustainability program.Through this program,the Company has implemented a num
159、ber of initiatives designedto reduce our impact on the environment.These initiatives include the installation of energy management systems,LEDlighting,high efficiency heating/air conditioning systems,and recycling programs in our stores,distribution facilities,andStore Support Center.Our Store Suppo
160、rt Center and our distribution centers in Casa Grande,Arizona,and Frankfort,NewYork,are LEED(Leadership in Energy and Environmental Design)Silver certified for environmentally sustainable design,construction,and operation.We also installed solar arrays at the Store Support Center in Brentwood,Tennes
161、see,and ourTractor Supply store in Hendersonville,Tennessee.In December 2018,we announced a goal to reduce carbon emissions from our facilities by 25%by 2025 from our 2015 baselineas part of the Companys Stewardship Program.Additional information can be found in our annual sustainability report on o
162、ur website.Index7-Information about our Executive OfficersPursuant to General Instruction G(3)of Form 10-K,the following list is included in Part I of this Report in lieu of beingincluded in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 7,2020.The following is a list o
163、f the names and ages of all executive officers of the registrant,indicating all positions and offices withthe registrant held by each such person and each persons principal occupations and employment during at least the past fiveyears:NamePositionAgeHarry A.Lawton,IIIPresident and Chief Executive Of
164、ficer45Kurt D.BartonExecutive Vice President Chief Financial Officer and Treasurer48Benjamin F.Parrish,Jr.Executive Vice President General Counsel and Corporate Secretary63Robert D.MillsExecutive Vice President Chief Technology,Digital Commerce and Strategy 47John P.OrdusExecutive Vice President Chi
165、ef Stores Officer44Jonathan S.EstepExecutive Vice President Chief Merchandising Officer40Christi C.KorzekwaSenior Vice President Marketing54Colin W.YankeeExecutive Vice President Chief Supply Chain Officer42Harry A.Lawton,III was appointed as President and Chief Executive Officer on January 13,2020.
166、Mr.Lawton served as President of Macys,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 P
167、resident of Merchandising and head of Home Depots 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.Kurt D.Barton was promoted to Executive Vice President Ch
168、ief Financial Officer and Treasurer in February 2019,afterhaving served as Senior Vice President Chief Financial Officer and Treasurer since March 2017.Prior to that time,Mr.Barton served as Senior Vice President Controller of the Company since February 2016.Mr.Barton previously served asVice Presid
169、ent Controller from February 2009,after having served as Director,Internal Audit from July 2002 to February2009.Mr.Barton has served in various other leadership roles in accounting since he joined the Company in 1999.Mr.Barton,a Certified Public Accountant,began his career in public accounting in 19
170、93,spending six years at Ernst&Young,LLP.Benjamin F.Parrish,Jr.has served as Executive Vice President General Counsel and Corporate Secretary of the Companysince February 2016,after having served as Senior Vice President General Counsel and Corporate Secretary of the Companysince October 2010.Mr.Par
171、rish previously served as Executive Vice President and General Counsel of MV Transportation,Inc.from September 2008,until he joined the Company.Mr.Parrish served as Senior Vice President and General Counsel ofCentral Parking Corporation from 1998 to 2008.Robert D.Mills has served as Executive Vice P
172、resident Chief Technology,Digital Commerce and Strategy Officer sinceAugust 2018,prior to which he served as Senior Vice President Chief Information Officer since February 2014.Mr.Millspreviously served as Chief Information Officer for Ulta Beauty from October 2011,until he joined the Company.From 2
173、005 to2011,Mr.Mills was Vice President,Chief Information Officer for the online business unit at Sears Holdings Corporation wherehe began as an Information Technology Customer Relationship Leader in 2001.Prior to 2001,Mr.Mills held roles at AllstateInsurance,Rockwell International Telecommunications
174、 Division,and Household Finance Corporation.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 SeniorVice President-Store Operations since August 2015.Prior to that tim
175、e,Mr.Ordus served the Company as Regional VicePresident from June 2010 and as a Regional Director for the Company since September 2008.Mr.Ordus joined the Companyas a District Manager in February 2002 after the acquisition of Quality Farm and Fleet with which Mr.Ordus held roles sinceJanuary 1988.Jo
176、nathan S.Estep was promoted to Executive Vice President-Chief Merchandising Officer in February 2020,after havingserved as the Senior Vice President,General Merchandising since April 2017.Prior to that time,Mr.Estep served theCompany as a Vice President,Divisional Merchandise Manager from February 2
177、014.Mr.Estep also previously served invarious other leadership roles in merchandising since he re-joined the Company in January 2008.Index8Christi C.Korzekwa has served as Senior Vice President,Marketing since February 2015,having previously served as VicePresident,Marketing since she joined the Com
178、pany in February 2012.Prior to joining the Company,Ms.Korzekwa served asSenior Vice President,Director of Client Services for Blue Sky Agency.She worked for Home Depot,Inc.from 2004 to 2011in roles of increasing importance in marketing and advertising,most recently as Senior Director,Marketing.Befor
179、e joiningHome Depot,Ms.Korzekwa spent 17 years with TM Advertising,most recently serving as their Senior Vice President,GlobalMedia Director.Colin W.Yankee was promoted to Executive Vice President-Chief Supply Chain Officer in February 2020,after havingserved asSenior Vice President,Supply Chain sin
180、ce November 2015 when he joined the Company.Mr.Yankee waspreviously Vice President of Logistics for Neiman Marcus from 2013 to 2015.Prior to that time,Mr.Yankee held variousleadership roles in logistics and supply chain with the Target Corporation since 2004.He began his career as a Cavalry Officer,
181、Captain in the United States Army.Additional InformationWe file reports with the Securities and Exchange Commission(“SEC”),including Annual Reports on Form 10-K,quarterlyreports on Form 10-Q,current reports on Form 8-K and other reports as required.We are an electronic filer and the SECmaintains an
182、Internet website at sec.gov that contains the reports,proxy and information statements,and other information wefile.We make available,free of charge through our Internet website,TractorS,our Annual Report on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K,and all amendments to t
183、hose reports as soon as reasonablypracticable after such material is electronically filed with or furnished to the SEC.The information provided on our website isnot part of this report,and is therefore not incorporated by reference unless such information is otherwise specificallyreferenced elsewher
184、e in this report.Item 1A.Risk FactorsOur business faces many risks.Those risks of which we are currently aware and deem to be material are described below.Ifany of the events or circumstances described in the following risk factors occur,our business,financial condition or results ofoperations may s
185、ignificantly suffer,and the trading price of our common stock could decline.These risk factors should be readin conjunction with the other information in this Form 10-K.General economic conditions may adversely affect our financial performance.Our results of operations may be sensitive to changes in
186、 overall economic conditions that impact consumer spending,includingdiscretionary spending.A weakening of economic conditions affecting disposable consumer income such as lower employmentlevels,uncertainty or changes in business or political conditions,higher interest rates,higher tax rates,higher f
187、uel and energycosts,higher labor and healthcare costs,the impact of natural disasters or acts of terrorism,general health epidemics,and othermatters could reduce consumer spending or cause consumers to shift their spending to competitors.A general reduction in thelevel of discretionary spending,shif
188、ts in consumer discretionary spending to our competitors or shifts in discretionary spendingto less profitable products sold by us could result in lower net sales,slower inventory turnover,greater markdowns oninventory,and a reduction in profitability due to lower margins.Failure to protect our repu
189、tation could have a material adverse effect on our brand name or any of our exclusive brands.Our success depends in part on the value and strength of the Tractor Supply name,including our exclusive brands.The TractorSupply name is integral to our business,as well as to the implementation of our stra
190、tegies for expanding our business.Maintaining,promoting,and positioning our brand will depend largely on the success of our marketing and merchandisingefforts and our ability to provide high quality merchandise and a consistent,high quality customer experience.Our brand couldbe adversely affected if
191、 we fail to achieve these objectives or if our public image or reputation were to be tarnished by negativepublicity.Failure to comply or accusation of failure to comply with ethical,social,product,labor,data privacy,andenvironmental standards could also jeopardize our reputation and potentially lead
192、 to various adverse consumer actions.Any ofthese events could result in decreased revenue or otherwise adversely affect our business.Index9We may be unable to increase sales at our existing stores.We experience fluctuations in our comparable store sales at our existing stores,defined as sales in sto
193、res which have been openfor at least twelve months.Various factors affect the comparable store sales at our existing stores,including,among others,thegeneral retail sales environment,our ability to efficiently source and distribute products,changes in our merchandiseassortment,competition,proximity
194、of our locations to one another or to the locations of other competing retailers,increasedpresence of online retailers,current economic conditions,customer satisfaction with our products,retail pricing,the timing ofpromotional events,the release of new merchandise,the success of marketing programs,a
195、nd weather conditions.These factorsmay cause the comparable store sales results at our existing stores to differ materially from prior periods and fromexpectations.Past comparable store sales are not an indication of future results,and there can be no assurance that ourcomparable store sales will no
196、t decrease in the future.Purchase price volatility,including inflationary and deflationary pressures,may adversely affect our financial performance.Although we cannot determine the full effect of inflation and deflation on our operations,we believe our sales and results ofoperations are affected by
197、both.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 duties,tariffs,dieselfuel,and transportation services.Therefore,we may experience both inflationary and d
198、eflationary pressure on product cost,which may impact consumer demand and,as a result,sales and gross margin.Our strategy is to reduce or mitigate the effectsof purchase price volatility principally by taking advantage of vendor incentive programs,economies of scale from increasedvolume of purchases
199、,adjusting retail prices,and selectively buying from the most competitive vendors while maintainingproduct quality.Should our strategy to mitigate purchase price volatility not be effective,our financial performance could beadversely impacted.Weather conditions may have a significant impact on our f
200、inancial results.Weather conditions affect the demand for,and in some cases the supply of,products,which in turn has an impact on prices.Historically,weather conditions,including unseasonably warm weather in the fall and winter months and unseasonably coolweather in the spring and summer months,have
201、 affected the timing and volume of our sales and results of operations.Inaddition,extreme weather conditions,including snow and ice storms,flood and wind damage,hurricanes,tornadoes,extremerain,and droughts,have impacted operating results.While extreme weather conditions can positively impact our op
202、eratingresults by increasing demand in affected locations for products needed to cope with the weather condition and its effects,theycan also negatively affect our business depending on the severity and length of these conditions,as a result of store closings,damage to our stores or merchandise,or t
203、he inability of customers to shop at our stores due to weather conditions.Our strategyis to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends.Should such a strategy not be effective,the weather may have a material adverse effect on
204、our financial condition and results ofoperations.Our merchandising and marketing initiatives may not provide expected results.We believe our past performance has been based on,and future success will depend upon,in part,the ability to develop andexecute merchandising initiatives with effective marke
205、ting programs.These merchandising initiatives and marketing programsmay not deliver expected results,and there is no assurance that we will correctly identify and respond in a timely manner toevolving trends and consumer preferences and expectations.Further,adverse publicity about our merchandise pr
206、oducts,whether valid or not,may discourage consumers from buying the products we offer.If we misjudge the market or ourmarketing programs are not successful,we may overstock unpopular products and be forced to take inventory impairment orretail price reductions that have a material adverse effect on
207、 our profitability.Failure to execute and promote such initiatives ina timely manner could harm our ability to grow the business and could have a material adverse effect on our results ofoperations and financial condition.Shortages of key merchandise could also have a material adverse effect on our
208、financialcondition and results of operations.Capital required for growth may not be available.The construction or acquisition of new stores,store support center facilities,distribution facilities,or other facilities,theremodeling and renovation of existing facilities,and investments in information t
209、echnology require significant amounts ofcapital.In the past,our growth has been funded through internally generated cash flow and bank borrowings.Our failure togenerate expected cash flow could impair our growth.In addition,disruptions to the capital and credit markets could adverselyaffect the abil
210、ity of the banks to meet their commitments.Our access to funds under our debt facilities is dependent on theIndex10-ability of the banks that are parties to the facility to meet their funding commitments.Those banks may not be able to meettheir funding commitments to us if they experience shortages
211、of capital and liquidity or if they experience excessive volumes ofborrowing requests within a short period of time.In addition,tight lending practices may make it difficult for our real estatedevelopers to obtain financing under acceptable loan terms and conditions.Unfavorable lending conditions co
212、uld impact thetiming of our store openings and materially adversely affect our ability to open new stores in desirable locations.Longer-term disruptions in the capital and credit markets as a result of uncertainty,changing or increased regulation,reducedfunding alternatives,or failures of significan
213、t financial institutions could adversely affect our access to liquidity needed for ourbusiness.Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative creditarrangements or other funding for our business needs can be arranged.Such measures c
214、ould include deferring capitalexpenditures and reducing or eliminating future share repurchases,cash dividends,or other discretionary uses of cash.Failure to open and manage new stores in the number and manner currently contemplated could adversely affect our financialperformance.An integral part of
215、 our business strategy includes the expansion of our store base through new store openings.This expansionstrategy is dependent on our ability to find suitable locations,and we face competition from many retailers and other businessesfor such sites.If we are unable to implement this strategy,our abil
216、ity to increase our sales,profitability,and cash flow could beimpaired significantly.To the extent that we are unable to open new stores in the manner we anticipate(due to,among otherreasons,site approval or unforeseen delays in construction),our sales growth may be impeded.As we execute this expans
217、ion strategy,we may also experience managerial or operational challenges which may prevent anyexpected increase in sales,profitability,or cash flow.Our ability to manage our planned expansion depends on the adequacy ofour existing information systems,the efficiency and expansion of our distribution
218、systems,the adequacy of the hiring andtraining process for new personnel(especially store managers),the effectiveness of our controls and procedures,and the abilityto identify customer demand and build market awareness in different geographic areas.There can be no assurance that we willbe able to ac
219、hieve our planned expansion,that the new stores will be effectively integrated into our existing operations or thatsuch stores will be profitable.Although we have a rigorous real estate site selection and approval process,there can be no assurance that our new storeopenings will be successful or res
220、ult in incremental sales and profitability for the Company.New stores build their salesvolumes and refine their merchandise selection over time and,as a result,generally have lower gross margins and higheroperating expenses as a percentage of net sales than our more mature stores.As we continue to o
221、pen new stores,there may be anegative impact on our results from a lower contribution margin of these new stores until their sales levels ramp to chainaverage,if at all,as well as from the impact of related pre-opening costs.Additionally,new stores can also impact the sales andcontribution margins o
222、f existing stores located in close proximity.Our failure to attract and retain qualified team members,increases in wage,and labor costs,and changes in laws and otherlabor issues could adversely affect our financial performance.Our ability to maintain and continue expanding operations depends on our
223、ability to attract and retain a large and growingnumber of qualified team members.Our ability to meet labor needs while controlling wage and related labor costs is subject tonumerous external factors,including the availability of a sufficient number of qualified persons in the work force,unemploymen
224、t levels,prevailing wage rates,increases in legally required minimum wage rates,changing demographics,healthand other insurance costs,changes in employment legislation and the potential for changes in local labor practices or unionactivities.If we are unable to locate,attract or retain qualified per
225、sonnel,or if costs of labor or related costs increasesignificantly,our financial performance could be adversely affected.We are subject to federal,state,and local laws governing employment practices and working conditions.These laws coverwage and hour practices,labor relations,paid and family leave,
226、workplace safety and immigration,among others.The laws andregulations being passed at the state and local level create unique challenges for a multi-state employer.We must continue tomonitor and adapt our employment practices to comply with these various laws and regulations.If our costs of labor or
227、 relatedcosts increase significantly as new or revised labor laws,rules or regulations or healthcare laws are adopted or implemented,our financial performance could be adversely affected.Index11-The loss of current members of our senior management team and other key team members or the failure to su
228、ccessfully managean executive officer transition may adversely affect our operating results.Our success depends in large part on the continued availability and service of our executive officers,senior management,andother key team members.Competition for senior management and key team members in our
229、industry is strong and we may notbe able to retain our key team members or attract new qualified team members.We must continue to recruit,retain,andmotivate management and other team members sufficiently,both to maintain our current business and to execute our long-termstrategic growth initiatives.T
230、he loss of any of our executive officers or other key senior management without sufficientadvance notice could prevent or delay the implementation and completion of our strategic initiatives or divert managementsattention to seeking qualified replacements.Additionally,any failure by us to manage a s
231、uccessful leadership transition of anexecutive officer and to timely identify a qualified permanent replacement could harm our business and have a material adverseeffect on our results of operations.We may pursue strategic acquisitions and the failure of an acquisition to produce the anticipated res
232、ults or the inability to fullyintegrate the acquired companies could have an adverse impact on our business.We may,from time to time,acquire businesses we believe to be complementary to our business.The success of an acquisitionis based on our ability to make accurate assumptions regarding the valua
233、tion,operations,growth potential,integration,andother factors relating to the target business.Acquisitions may result in difficulties in assimilating acquired companies and mayresult in the diversion of our capital and our managements attention from other business issues and opportunities.We may not
234、be able to successfully integrate an organization that we acquire,including their personnel,financial systems,distribution,operations,and general operating procedures.If we fail to successfully integrate acquisitions,we could experience increasedcosts associated with operating inefficiencies which c
235、ould have an adverse effect on our financial results.Also,while weemploy several different methodologies to assess potential business opportunities,the new businesses may not meet ourexpectations and,therefore,adversely affect our financial performance.Competition may hinder our ability to execute o
236、ur business strategy and adversely affect our operations.We operate in the highly competitive retail merchandise sector with numerous competitors.These competitors include generalmerchandise retailers,home center retailers,specialty and discount retailers,independently-owned retail farm and ranch st
237、ores,numerous privately-held regional farm store chains,and farm cooperatives,as well as internet-based retailers.We compete forcustomers,merchandise,real estate locations,and employees.This competitive environment subjects us to various other risks,including the inability to continue our store and
238、sales growth and to provide attractive merchandise to our customers atcompetitive prices that allow us to maintain our profitability.Our failure to compete effectively in this environment couldadversely impact our financial performance.We face risks from our use of service providers or other third-p
239、arties whom we rely upon for conducting our business.The Company is dependent upon numerous service providers and other third-parties to conduct our business.While theCompany selects these third-party vendors carefully,it does not control their actions.Any failure of these third-parties toprovide th
240、e expected or agreed-upon level of service in a timely manner for any reason could adversely affect the Companysability to deliver products and services to its customers and otherwise conduct its business.Further,our reputation or brandcould be adversely impacted by the actions of these third-partie
241、s.We face risks associated with vendors from whom our products are sourced.The products we sell are sourced from a variety of domestic and international vendors.We have agreements with our vendorsin which the vendors agree to comply with applicable laws,including labor and environmental laws,and to
242、indemnify usagainst certain liabilities and costs.Our ability to recover liabilities and costs under these vendor agreements is dependent uponthe financial condition and integrity of the vendors.We rely on long-term relationships with our suppliers but have nosignificant long-term contracts with suc
243、h suppliers.Our future success will depend in large measure upon our ability tomaintain our existing supplier relationships or to develop new ones.This reliance exposes us to the risk of inadequate anduntimely supplies of various products due to political,economic,social,health(including,but not lim
244、ited to,the recentCOVID-19 coronavirus outbreak originating in China),or environmental conditions,transportation delays,or changes in lawsand regulations affecting distribution.Our vendors may be forced to reduce their production,shut down their operations or filefor bankruptcy protection,which coul
245、d make it difficult for us to serve the markets needs and could have a material adverseeffect on our business.Index12-While the Company selects these third-party vendors carefully,it does not control their actions or the components ormanufacturer of their products.Any problems caused by these third-
246、parties,or issues associated with their products,includingcustomer 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 subject theCom
247、pany to litigation and adversely affect the Companys ability to deliver products and services to its customers and have amaterial adverse effect on our results of operations and financial condition.We rely on foreign manufacturers for various products that we sell.In addition,many of our domestic su
248、ppliers purchase aportion of their products from foreign sources.As an importer,our business is subject to the risks generally associated withdoing business internationally,such as domestic and foreign governmental regulations,economic disruptions,global or regionalhealth epidemics,delays in shipmen
249、ts,transportation capacity and costs,currency exchange rates,and changes in political oreconomic conditions in countries from which we purchase products.If any such factors were to render the conduct of businessin particular countries undesirable or impractical or if additional U.S.quotas,duties,tar
250、iffs,taxes,or other charges orrestrictions were imposed upon the importation of our products in the future,our financial condition and results of operationscould be materially adversely affected.The current political landscape in the U.S.has introduced greater uncertainty with respect to tax and tra
251、de policies,tariffs andregulations affecting trade between the U.S.and other countries.We source a portion of our merchandise from manufacturerslocated outside the U.S.,primarily in Asia and Central America.Major developments in tax policy or trade relations,such asthe disallowance of tax deductions
252、 for imported merchandise or the imposition of tariffs on imported products,could have amaterial adverse effect on our business,results of operations,and financial condition.We rely on manufacturers located in foreign countries,including China,for merchandise.Additionally,a portion of ourdomesticall
253、y purchased merchandise is manufactured abroad.Our business may be materially adversely affected by risksassociated with international trade,including the impact of tariffs(imposed and potential)by the U.S.with respect to certainconsumer goods imported from China.We source a portion of our merchandi
254、se from manufacturers located outside the U.S.,primarily in Asia and Central America,and many of our domestic vendors have a global supply chain.The U.S.has imposed tariffs on certain products imported intothe U.S.from China and could propose additional tariffs.The imposition of tariffs on imported
255、products has increased our costsand could result in reduced sales and profits.In addition,the imposition of tariffs by the U.S.has resulted in the adoption oftariffs by China on U.S.exports and could result in the adoption of tariffs by other countries as well.A resulting trade warcould have a signi
256、ficant adverse effect on world trade and the world economy.Further,the imposition of tariffs or otherchanges in world trade could have an impact on certain U.S.industries and consumers and could negatively impact theconsumer demand for products that we sell.We continue to evaluate the impact of the
257、effective and potential tariffs on our supply chain,costs,sales,and profitability aswell as our strategies to mitigate any negative impact,including negotiating with our vendors,seeking alternative sourcingoptions,and adjusting retail selling prices.Given the uncertainty regarding the scope and dura
258、tion of the current and potentialtariffs,as well as the potential for additional trade actions by the U.S.or other countries,the impact on our business,results ofoperations,and financial condition is uncertain but could be significant.Thus,we can provide no assurance that any strategieswe implement
259、to mitigate the impact of such tariffs or other trade actions will be successful in whole or in part in mitigating theimpact of any current or future tariffs.To the extent that our supply chain,costs,sales,or profitability are negatively affected bythe tariffs or other trade actions,our business,fin
260、ancial condition,and results of operations may be materially adverselyaffected.A significant disruption to our distribution network or to the timely receipt of inventory could adversely impact sales orincrease our transportation costs,which would decrease our profits.We rely on our distribution and
261、transportation network to provide goods to our stores in a timely and cost-effective mannerthrough deliveries to our distribution facilities from vendors and then from the distribution facilities or direct ship vendors toour stores by various means of transportation,including shipments by sea,air,ra
262、il,and truck.Any disruption,unanticipatedexpense,or operational failure related to this process could negatively affect our operations.For example,unexpected deliverydelays(including delays due to weather,fuel shortages,work stoppages,global or regional health epidemics,or other reasons)or increases
263、 in transportation costs(including increased fuel costs or a decrease in transportation capacity for overseasshipments)could significantly decrease our ability to provide adequate products for sale,or products at a desired price,resultingin lower sales and profitability.In addition,labor shortages o
264、r work stoppages in the transportation industry or long-termdisruptions to the national and international transportation infrastructure that lead to delays or interruptions of deliveries couldIndex13-negatively affect our business.Also,a fire,tornado,or other disaster at one of our distribution faci
265、lities could disrupt ourtimely receiving,processing,and shipment of merchandise to our stores which could adversely affect our business.The implementation of our supply chain initiatives could disrupt our operations in the near term,and these initiatives might notprovide the anticipated benefits or
266、might fail.We maintain a network of distribution facilities and have plans to build new distribution facilities and expand existing facilitiesto support our long-term strategic growth initiatives.Delays in opening new or expanded distribution facilities could adverselyaffect our future operations by
267、 slowing store growth or negatively impacting our fulfillment capabilities,which may in turnreduce revenue growth.In addition,distribution-related construction or expansion projects entail risks which could causedelays and cost overruns,such as:shortages of materials;shortages of skilled labor or wo
268、rk stoppages;unforeseen construction,scheduling,engineering,environmental,or geological problems;weather interference;fires or other casualty losses;andunanticipated cost increases.The completion date and ultimate cost of future projects could differ significantly from initialexpectations due to con
269、struction-related or other reasons.We cannot guarantee that all projects will be completed on time orwithin established budgets.We continue to make significant technology investments in our supply chain.These initiatives are designed to streamline ourdistribution process so that we can optimize the
270、delivery of goods and services to our stores,distribution facilities,andcustomers in a timely manner and at a reasonable cost.The cost and potential problems and interruptions associated with theimplementation of these initiatives,including those associated with managing third-party service provider
271、s and employing newweb-based tools and services,could disrupt or reduce the efficiency of our operations in the near term.In addition,ourimproved supply chain technology might not provide the anticipated benefits,it might take longer than expected to realize theanticipated benefits,or the initiative
272、s might fail altogether.We are subject to personal injury,workers compensation,product liability,discrimination,harassment,wrongful termination,and other claims in the ordinary course of business.Our business involves a risk of personal injury,workers compensation,product liability,discrimination,ha
273、rassment,wrongfultermination,and other claims in the ordinary course of business.Product liability claims from customers and product recalls formerchandise alleged to be defective or harmful could lead to the disposal or write-off of merchandise inventories,theincurrence of fines or penalties,and da
274、mage to our reputation.We maintain general liability and workers compensationinsurance with a self-insured retention for each policy type and a deductible for each occurrence.We also maintain umbrellalimits above the primary general liability and product liability coverage.In many cases,we have inde
275、mnification rights againstthe manufacturers of the products and their products liability insurance,as well as the property owners of our leased buildings.Our ability to recover costs and damages under such insurance or indemnification arrangements is subject to the financialviability of the insurers
276、,manufacturers,and landlords and the specific allegations of a claim.No assurance can be given thatour insurance coverage or the manufacturers or landlords indemnity will be available or sufficient in any claims broughtagainst us.Additionally,we are subject to U.S.federal,state,and local employment
277、laws that expose us to potential liability if we aredetermined to have violated such employment laws,including but not limited to,laws pertaining to minimum wage rates,overtime pay,discrimination,harassment,and wrongful termination.Compliance with these laws,including the remediation ofany alleged v
278、iolation,may have a material adverse effect on our business or results of operations.Failure to maintain an effective system of internal control over financial reporting could materially impact our business andresults.The Companys management is responsible for establishing and maintaining adequate i
279、nternal control over financial reporting.An internal control system,no matter how well designed and operated,can provide only reasonable,not absolute,assurance thatthe objectives of the control system are met.Further,the design of a control system must reflect the fact that there are resourceconstra
280、ints,and the benefits of controls must be considered relative to their costs.Because of the inherent limitations in allinternal control systems,internal control over financial reporting may not prevent or detect misstatements.Any failure tomaintain an effective system of internal control over financ
281、ial reporting could limit our ability to report our financial resultsaccurately and timely or to detect and prevent fraud,and could expose us to litigation or adversely affect the market price of ourcommon stock.Index14-Any failure to maintain the security of the information relating to our business
282、,customers,employees,and vendors that wehold,whether as a result of cybersecurity attacks or otherwise,could damage our reputation with customers,employees,andvendors,could cause us to incur substantial additional costs and to become subject to litigation,and could materially affect ouroperating res
283、ults,financial condition,and liquidity.We depend on information systems and technology,some of which are managed or provided by third-parties,for manyactivities important to our business.As do most retailers,we receive and store in our information systems certain personal andother sensitive informat
284、ion about our business,customers,employees,and vendors.Additionally,we also receive and processinformation permitting cashless payments as part of our in-store and online operations at TractorS,some of whichdepend upon the secure transmission of confidential information over public networks.The info
285、rmation that we receive andstore makes us subject to cybersecurity attacks,cyber incidents and privacy regulations,which are occurring more frequently,are constantly evolving in nature,are becoming more sophisticated,and are being made by groups and individuals with a widerange of expertise and moti
286、ves.We are the target of attempted cyber and other security threats and continuously monitor ourinformation technology networks and infrastructure in an effort to prevent,detect,address and mitigate the risk of unauthorizedaccess,misuse,computer viruses and other events that could have a security im
287、pact.However,these security measures cannotprovide absolute assurance or guarantee that we will be successful in preventing,detecting,or responding to every such breachor disruption and/or preventing the misuse of confidential information of our business,customers,employees,or vendors.Similar risks
288、exist with respect to the third-party vendors that we rely upon for aspects of our information technology supportservices and administrative functions,even if the attack or breach does not directly impact our systems or information.A compromise of our information security and privacy controls,or tho
289、se of businesses and vendors with whom we interact,which results in confidential information being accessed,obtained,damaged,or used by unauthorized or improper parties;lossor unavailability of data;disruptions to our business activities;or any other outcome stemming from a cybersecurity incidentcou
290、ld materially adversely affect our reputation with our customers,team members,and vendors,as well as our operations,results of operations,financial condition,and liquidity,and could result in significant legal and financial exposure beyond thescope or limits of insurance coverage.Moreover,a security
291、 breach could require that we expend significant additionalresources to respond to the attack or breach and could result in a disruption of our operations.In addition,states and the federal government are increasingly enacting laws and regulations relating to privacy,data breaches,and theft of emplo
292、yee and customer data.These laws will likely increase the costs of doing business and,if we fail to complywith these laws and regulations,to implement appropriate safeguards,or to detect and provide prompt notice of unauthorizedaccess as required by some of these new laws,we could be subject to pote
293、ntial claims for damages and other remedies,whichcould harm our business.We are subject to payments-related risks that could increase our operating costs,expose us to fraud,subject us to potentialliability,and potentially disrupt our business.We accept payments using a variety of methods,including c
294、redit cards,debit cards,credit accounts,our private label and co-branded credit cards,gift cards,direct debit from a customers bank account,consumer invoicing,and physical bank checks,and we may offer different payment options over time.These payment options subject us to many compliance requirement
295、s,including,but not limited to,compliance with payment card association operating rules,including data security rules,certification requirements,rules governing electronic funds transfers,and Payment Card Industry Data Security Standards.They also subject us to potential fraud by criminal elements s
296、eeking to discover and take advantage of security vulnerabilitiesthat may exist in some of these payment systems.For certain payment methods,including credit and debit cards,we payinterchange and other fees,which may increase over time and raise our operating costs and lower profitability.We rely on
297、 thirdparties to provide payment processing services,including the processing of credit cards,debit cards,electronic checks,giftcards and promotional financing,and it could disrupt our business if these companies become unwilling or unable to providethese services to us.If we fail to comply with the
298、se rules or requirements,adequately encrypt payment transaction data,or ifour data security systems are breached or compromised,we may be liable for card issuing banks costs,subject to fines andhigher transaction fees,and lose our ability to accept credit and debit card payments from our customers,p
299、rocess electronicfunds transfers,or facilitate other types of online payments,and our business and operating results could be adversely affected.Our business and operations could suffer material losses in the event of system interruptions or failures.Our information technology systems,some of which
300、are dependent on services managed or provided by third-parties,serve animportant role in the operation and administration of our business.These systems are vulnerable to damages from any numberof sources,including,but not limited to,human error,cybersecurity attacks,computer viruses,unauthorized acc
301、ess,fire,flood,power outages,telecommunication failures,facility or equipment damage,natural disasters,terrorism,and war.In addition,weIndex15continually make investments in technology to implement new processes and systems,as well as to maintain and update ourexisting processes and systems.Implemen
302、ting process and system changes increases the risk of disruption.If our informationtechnology systems are interrupted or fail and our redundant systems or recovery plans are not adequate to address suchinterruptions or failures on a timely basis,our revenues and profits could be reduced and the repu
303、tation of our brand and ourbusiness could be materially adversely affected.Additionally,remediation of any problems with our systems could result insignificant,unplanned expenses.Customer-facing technology systems are an important part of our sales and marketing strategy and the failure of those sys
304、temsto perform effectively and reliably could keep us from delivering positive customer experiences.Through our continued information technology enhancements,we are able to provide an improved overall shoppingenvironment and an omni-channel experience that empowers our customers to shop and interact
305、 with us from computers,tablets,smart phones,and other mobile communication devices.We use our website,TractorS,both as a saleschannel for our products and as a method of providing product,project,and other relevant information to our customers to driveboth in-store and online sales.Omni-channel ret
306、ailing is continually evolving and expanding,and we must effectively respondto changing customer expectations and new developments.Disruptions,failures,or other performance issues with thesecustomer-facing technology systems could impair the benefits that they provide to our in-store and online busi
307、ness andnegatively affect our relationship with our customers.If we are unable to maintain or upgrade our management information systems and software programs or if we are unable toconvert to alternate systems in an efficient and timely manner,our operations may be disrupted or become less efficient
308、 and ourlong-term strategic growth initiatives may not be successful.We depend on management information systems for many aspects of our business.We rely on certain software vendors tomaintain and periodically upgrade many of these systems so that we can continue to support our business.We could bem
309、aterially adversely affected if we experienced a disruption or data loss relating to our management information systems andare unable to recover timely.We could also be adversely impacted if we are unable to improve,upgrade,maintain,and expandour management information systems,particularly in light
310、of the contemplated continued store growth.The success of our long-term strategic growth initiatives designed to increase our sales and improve margin are dependent invarying degrees on the timely delivery and the functionality of information technology systems to support them.Extendeddelays or cost
311、 overruns in securing,developing,and otherwise implementing technology solutions to support the long-termstrategic growth initiatives would delay and possibly even prevent us from realizing the projected benefits of those initiatives.We cannot provide any guaranty of future dividend payments or that
312、 we will continue to repurchase our common stockpursuant to our stock repurchase program.Although our Board of Directors has indicated an intention to pay future quarterly cash dividends on our common stock,anydetermination to pay or increase cash dividends on our common stock in the future will be
313、based primarily upon our financialcondition,results of operations,business requirements,and our Board of Directors continuing determination that thedeclaration of dividends is in the best interests of our stockholders and is in compliance with all laws and agreements applicableto the dividend.Furthe
314、rmore,although our Board of Directors has authorized a share repurchase program of up to$4.5 billion,we may discontinue this program at any time or significantly reduce repurchases under the program.The market price for our common stock might be volatile and could result in a decline in value.The pr
315、ice at which our common stock trades may be volatile and could be subject to significant fluctuations in response to ouroperating results,general trends and prospects for the retail industry,announcements by our competitors,analystrecommendations,our ability to meet or exceed analysts or investors e
316、xpectations,the condition of the financial markets,andother factors.The Companys stock price is dependent in part on the multiple of earnings that investors are willing to pay.That multiple is in part dependent on investors perception of the Companys future earnings growth prospects.If investorsperc
317、eption of the Companys earnings growth prospects change,the Companys earnings multiple may decline and its stockprice could be adversely affected.In addition,the stock market has at times experienced extreme price and volume fluctuations that often have been unrelated ordisproportionate to the opera
318、ting performance of companies.These fluctuations,as well as general economic and marketconditions,may adversely affect the market price of our common stock notwithstanding our actual operating performance.Index16Our business could be negatively impacted as a result of federal,state,local,or foreign
319、laws and regulations.We are subject to numerous federal,state,local,and foreign laws and governmental regulations including those relating toenvironmental protection,personal injury,intellectual property,consumer product safety,building,land use and zoningrequirements,workplace regulations,wage and
320、hour,privacy and information security,and employment law matters.Our operations,including our outsourced exclusive brand manufacturing partners,are subject to regulation by the OccupationalSafety and Health Administration(“OSHA”),the Food and Drug Administration(the“FDA”),the Department of Agricultu
321、re(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.If we fail to comply with existing or future laws or regulations,or if these laws or r
322、egulations are violated by importers,manufacturers or distributors,we may be subject to governmental or judicial fines or sanctions,while incurring substantial legalfees and costs.In addition,our capital expenditures could increase due to remediation measures that may be required if we arefound to b
323、e noncompliant with any existing or future laws or regulations.We are also subject to the Foreign Corrupt Practices Act(the“FCPA”),which prohibits U.S.companies and theirintermediaries from making improper payments to foreign officials for the purposes of obtaining or retaining business,and theanti-
324、bribery laws of other jurisdictions.Failure to comply with the FCPA and similar laws could subject us to,among otherthings,penalties and legal expenses that could harm our reputation and have a material adverse effect on our business,financialcondition,and results of operations.Potential noncomplian
325、ce with environmental regulations could materially impact our results of operations or financialcondition.Our business is subject to various federal,state,and local laws,regulations,and other requirements pertaining to protection ofthe environment and public health,including,for example,regulations
326、governing the management of waste materials and wastewaters.Governmental agencies on the federal,state,and local levels have,in recent years,increasingly focused on the retailsectors compliance with such laws and regulations,and have at times pursued enforcement activities.We periodically receiveinf
327、ormation requests and notices of potential noncompliance with environmental laws and regulations from governmentalagencies,which are addressed on a case-by-case basis with the relevant agency.Any of these events could have a materialadverse effect on our results of operations or financial condition.
328、Effective tax rate changes and results of examinations by taxing authorities could materially impact our results.Our future effective tax rates could be adversely affected by legislative tax reform,changes in statutory rates or changes in taxlaws,or interpretations thereof.Additionally,our future ef
329、fective tax rates could be adversely affected by the earnings mixbeing lower than historical results in states where we have lower statutory rates and higher than historical results in states wherewe have higher statutory rates or by changes in the measurement of our deferred tax assets and liabilit
330、ies.We are subject to periodic audits and examinations by the Internal Revenue Service(“IRS”),as well as state and local taxingauthorities.Like many retailers,a portion of our sales are to tax-exempt customers.The business activities of our customersand the intended use of the unique products sold b
331、y us create a challenging and complex compliance environment.Thesecircumstances create risk that we could be challenged as to the propriety of our sales tax compliance.Our results could bematerially impacted by the determinations and expenses related to these and other proceedings by the IRS and oth
332、er state andlocal taxing authorities.Item 1B.Unresolved Staff CommentsNone.Item 2.PropertiesAt December 28,2019,the Company operated 2,024 stores in 49 states(1,844 Tractor Supply and Dels retail stores and 180Petsense retail stores).The Company leases approximately 94%of its stores.Store leases typ
333、ically have initial terms ofbetween 10 and 15 years,with two to four optional renewal periods of five years each,exercisable at our option.No singlelease is material to the Companys operations.Index17The following is a count of store locations by state:StateNumberof StoresStateNumberof StoresTexas221Wisconsin24North Carolina100Massachusetts23Pennsylvania97Maryland23Tennessee97Colorado22Ohio93Illin
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