1、2018 Annual ReportCELEBRATING 80 YEARS OF LIFE OUT HEREAbout Tractor SupplyTractor Supply is the largest rural lifestyle retailer in the United States.At December 29,2018,the Company operated 1,940 stores in 49 states,including 1,765 Tractor Supply stores and 175 Petsense pet specialty stores and e-
2、commerce websites at TractorS and P.Our Mission and ValuesOur 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 values ethics,respect,balance,winning attitude,communication,development,te
3、amwork,change,initiative and accountability that are the foundation of our culture and the guiding principles for 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 ran
4、chers and all others who live the rural lifestyle.Tractor Supply customers are home,land,pet and livestock owners that live a conservative and self-reliant lifestyle.They depend on us to have the products they need for Life Out Here.Our ONETractor Strategy is designed to provide a convenient shoppin
5、g experience anytime,anywhere and any way our customers choose.To learn more or shop online,visit TractorS and P.GREG SANDFORT CHIEF EXECUTIVE OFFICERMessage from Our CEOTo Our Stakeholders,As we celebrated our 80th anniversary in 2018,Tractor Supply has grown from a mail order catalog business offe
6、ring tractor parts to Americas family farmers to become the largest farm and ranch retailer in the country.Our passionate commitment to our customers,team members and communities,as well as our shareholders,is the foundation of our profitable growth.I doubt that when our company was founded in 1938
7、anyone could have imagined that 80 years later,Tractor Supply would be serving customers in more than 1,700 stores in 49 states-and still growing!Reflecting on 2018,there is much to celebrate.Our Tractor Supply team executed well across store operations,merchandising,supply chain and store design an
8、d layout.Our teams did a great job of developing and executing plans that resonated with our customers and that were seasonally relevant,which continued to drive increases in our transactions and average ticket.We know our customers depend on Tractor Supply for their everyday basic needs in living t
9、he rural lifestyle.Additionally,Tractor Supplys Stewardship Program has been a natural extension of our overall growth,and we are honored to have been recognized by Barrons list of the 100 Most Sustainable Companies for our sustainability efforts.In 2018,we delivered solid financial results:Net sale
10、s increased by 9.0%to reach a record$7.9 billion.Comparable store sales increased 5.1%for the year,with both transaction count and average ticket increasing.This was our best annual comparable store sales growth in six years.For 42 out of 43 quarters,our customer transaction count has been positive.
11、Diluted EPS was$4.31,representing growth of 30.6%.We generated cash from operations of$694 million,while returning$497 million to shareholders through the combination of share repurchases and quarterly cash dividends.2018 marked the eighth consecutive year we increased our quarterly cash dividend fo
12、r shareholders.OPERATIONAL HIGHLIGHTSIn terms of operational highlights for 2018,we continued to strengthen and leverage our competitive advantages:Opened 80 new Tractor Supply stores and 18 Petsense locations,increasing our selling square footage by about 5%.Substantially completed construction of
13、our new distribution center in Frankfort,NY,to support our store expansion in the Northeast Corridor of the country,with operations beginning in 2019.Added two additional mixing centers,as well as an East Coast import center to shorten replenishment lead-times by improving the flow of direct import
14、inventory.Enhanced our Buy Online,Pickup In-Store capability.12018 Annual Report5177633030434419614172126211323365321422458996217219756798219874OVER 10 YEARSSTORE COUNT INCREASE OF127%PETSENSE STORES175TRACTOR SUPPLY STORES1,7651943111345320211562860923868277181010101682619112225191720 Expanded our
15、Stockyard in-store kiosk to nearly 600 stores,which offers immediate in-store access to our online inventory of products,which is another way that we are offering a retail experience that is relevant for our customers and goes beyond“e-commerce”alone.Added Mobile Point of Sale technologies across ne
16、arly 400 stores.Significantly exceeded our Neighbors Club Loyalty Program membership growth goals.Relaunched our Private Label Credit Card with an improved consumer value proposition.Continued to invest in our digital capabilities,which had increased traffic and conversion.Our online sales,once agai
17、n,grew strong double-digits for the year.We believe that we are uniquely positioned to address the needs of our customer base better than anyone in this fragmented market,and we see significant opportunities to broaden our customer reach and increase our market share as our store base and digital ca
18、pabilities expand over time.OUR ONETRACTOR STRATEGYAt Tractor Supply,we are committed to growing our business by being the most dependable supplier of relevant products and services for the rural lifestyle,creating customer loyalty through personalized experiences and providing convenience for Life
19、Out Here anytime,anywhere and in any way our customer chooses.Our ONETractor Strategy is designed to allow us to exceed the ever-evolving expectations of our customers,positioning us for growth to generate increased shareholder value for the long term.2Tractor Supply CompanyMessage from Our CEOTract
20、or Supply Company2Our 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 online.NET SALES$7.9BILLION7.35.76.26.81415161718SALES BY CATEGORY IN 2018Recordnet salesCOMPARABLE STORE SAL
21、ES INCREASE5.1%3.83.11.62.7141516171810+years of comparable storetransaction countincreasesNET INCOME PERDILUTED SHARE$4.311415161718$694 millioncash from operations8th consecutive year of increased dividendsCASH RETURNEDTO SHAREHOLDERS$497MILLION14151617182.663.003.27 3.3038339645450347%LIVESTOCK&P
22、ET 22%HARDWARE,TOOLS&TRUCK19%SEASONAL,GIFT&TOY8%CLOTHING&FOOTWEAR4%AGRICULTUREOur ONETractor Strategy initiatives are clearly aligned around four key objectives and the foundation of team member engagement and operational efficiency:Driving profitable growth:Our goal is to grow profitability through
23、 comparable store sales,new store openings and the expansion of online shopping.Building customer-centric engagement:To build customer-centric engagement by leveraging analytics to deliver legendary customer service,seasoned advice and personalized experiences.Offering relevant products and services
24、:Our goal is to continue to be the dependable supplier that our customers can count on,by offering relevant products and services across all channels through exclusive and national brands,and continue to introduce new products through our test and learn strategy.Enhancing our core and foundational i
25、nfrastructure capabilities:We are investing in infrastructure and process improvements which 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 sh
26、opping experience are resonating with our customers.We will continue to take a balanced approach of managing the business,keeping the long term in focus.In 2019,our capital spending is allocated across new stores,store-level initiatives,information technology projects and our supply chain.In 2019,we
27、 plan to open approximately 80 Tractor Supply stores and about 10 to 15 Petsense stores.CELEBRATING 80 YEARS OF LIFE OUT HEREThroughout our 80-year history,Tractor Supply has been able to trace our business principles back to a set of mission and values that motivate and inspire team members and giv
28、e the organization a unified focus for the future.Each day,Tractor Supplys 29,000+team members strive 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 values ethics,respect,balance,winning attitud
29、e,communication,development,teamwork,change,initiative and accountability that are the foundation of our culture and the guiding principles for how we conduct our business.These mission and values are truly the“secret sauce”to Tractor Supplys 80 years of tremendous success and bright future!To our t
30、eam members,thank you for what you do every day for our customers,our communities and each other.To our shareholders and other stakeholders,thank you for your continued support and the confidence you have placed in Tractor Supply.Gregory A.Sandfort CHIEF EXECUTIVE OFFICER32018 Annual ReportMessage f
31、rom Our CEO2018 Annual Report3Message from Our CEOOur ONETractor StrategyWe Are Guided by Our Foundational StrengthsOur Strategic GoalsTEAM MEMBER ENGAGEMENTEmpower our team members by developing their skills and leadership while leveraging technologyOPERATIONAL EFFICIENCYSupport business capabiliti
32、es through margin improvement and efficiencyDRIVING PROFITABLE GROWTH Comparable Store Sales Increase Tractor Supply Store Growth Petsense Store Growth Online GrowthBUILDING CUSTOMER-CENTRIC ENGAGEMENT Personalization Relationship Marketing Supporting the Lifestyle through Community Events&Sponsorsh
33、ips,such as FFA&4-HOFFERING RELEVANT PRODUCTS AND SERVICES Product Assortment In-Store Experience Services that Fit Our Customers Lifestyle Localization of ProductsENHANCING OUR CORE&FOUNDATIONAL CAPABILITIES Leverage Customer Analytics Online Enhancements Supply Chain Efficiencies&Infrastructure4Tr
34、actor Supply CompanyOur Goals in ActionHow We Meet Our Customers NeedsA UNIQUE UNDERSTANDING OF LIFE OUT HEREANYTIME,ANYWHERE,ANYWAYOur customers access our products and seasoned advice:TEAM MEMBERS Live the Lifestyle Product Expertise Strong EngagementPRODUCTS OUR CUSTOMERS WANT Exclusive Brands Na
35、tional&Regional Brands Complementary Services1,700+TRACTOR SUPPLY LOCATIONS 10+MILLION NEIGHBORS CLUB MEMBERS31 MILLION STORE LOCATION SEARCHES IN 2018 ON TRACTORSUPPLY.COM24/7 ONLINE AT TRACTORSUPPLY.COM OR THROUGH OUR CUSTOMER SOLUTIONS CENTER AT(877)718-6750COST PRODUCTIVITY TO GENERATE STRONG RE
36、TURNSSUPPLY CHAIN AND LOGISTICS New Distribution&Mixing Centers Labor and Transportation Efficiencies Data-driven AnalyticsOPERATING EFFICIENCIES Process Improvements Cost Reductions Store Labor and Task Management Tools52018 Annual ReportOur ONETractor Strategy80 Years of Life Out HereOur BusinessO
37、ur stores are located in towns outlying major metropolitan markets and in rural communities.Our Tractor Supply store format typically ranges in size from 15,000 to 20,000 square feet of inside selling space,along with additional outside selling space.We expect to open approximately 80 Tractor Supply
38、 stores in 2019,and we believe we are well-positioned to reach our long-term target of 2,500 Tractor Supply stores.Our Petsense store format includes an average of 5,500 selling square feet,and we expect to open about 10 to 15 new Petsense stores in 2019.Additionally,our customers can shop most of o
39、ur products,plus an extended selection in many categories,on our websites at TractorS and P.Tractor Supply is committed to growing our business by being the most dependable supplier of relevant products and services for the rural lifestyle.We have stayed relevant by always listening to our customers
40、 and continuing to evolve and innovate,and we will continue to prioritize meeting our customers anytime,anywhere and in any way.1940The first TSC retail store opens in January in Minot,North Dakota and does$125,000 in business1938 Charles E.Schmidt founds a mail-order business called Tractor Supply
41、Company(TSC)1953 TSC logo becomes a 4-sided trapezium195910M$Company annual sales hit$10 million1959 On January 14,1959,Tractor Supply Company goes public,listed on the over-the-counter market1964TSC opens its 100th store(Located in Hutchinson,KS)1969 National Industries purchases controlling intere
42、st in Tractor Supply Company1978 Acquired by Fuqua Industries1979 Joe Scarlett joins TSC(Served as CEO 1993-2004)1979 TSC moves its headquarters from Chicago to Nashville1980 Tom Hennesy joins TSC(Served as CEO 1980-1993)1983 TSC becomes privately owned through a leveraged buyout1994 Tractor Supply
43、Company goes public on NASDAQ under the ticker symbol TSCO6Tractor Supply Company1,765TSC STORES AND COUNTINGOur MerchandiseWe offer a comprehensive,yet localized assortment of products:Equine,livestock,pet and small animal products,including items necessary for their health,care,growth and containm
44、ent Hardware,truck,towing and tool products Seasonal products,including heating,lawn and garden items,power equipment,gifts and toys Work/recreational clothing and footwear Maintenance products for agricultural and rural use2004 TSCs Store Support Center moves to Brentwood,TN2007 Greg Sandfort joins
45、 TSC (Current CEO since 2012)2000 Jim Wright joins TSC(Served as CEO 2004-2012)2002 Company annual sales hit$1 billion2011TSC opens its 1,000th store(Located in South Hill,VA)2013 Company annual sales hit$5 billion2014 TSC first included on Fortune 5002014 TSC opens new Store Support Center2016 TSC
46、acquires Petsense 2015 TSC added to the S&P 5002018TSC opens its 1,700th store(Located in Mocksville,NC)2018 The Company celebrates 80 years of business by ringing the closing bell at the NASDAQ on September 4,201872018 Annual Report80 Years of Life Out HereCorporate Responsibility and Doing the Rig
47、ht ThingTractor Supply believes a healthy environment,properly managed resources and vibrant communities are keys to a secure and prosperous future.We view our Stewardship Program as a process of continuous improvement as we look for ways to become more efficient,eliminate waste and reduce our impac
48、t on the environment.In 2018,we made great progress:Giving BackTo ensure we are helping the people we care most about-our customers and team members-we focus our corporate giving on three areas:AGRICULTURETractor Supply was started to help serve people who live the rural lifestyle.We remain true to
49、our core purpose by providing corporate donations and organizing in-store events to support local and nationwide nonprofit organizations that promote the agriculture and farming lifestyle,such as FFA and 4-H.COMMUNITYAt Tractor Supply,the most popular sayings all begin with“whatever it takes”.Our co
50、rporate culture encourages our team members to go above and beyond,to make a real difference with their customers and in their local community.As a company,we aid disaster relief by donating products and gift cards to help those in need.Beyond financial support,we are often at the forefront of pitch
51、ing in and helping out.In some cases,we may be the only business that remains open to provide needed supplies in times of crisis.We also support returning troops,veterans and first responders through a variety of in-store events and discounts.Last year,we furthered our support of the veteran communi
52、ty by creating an employee resource group for veteran team members and partnering with the Farmer Veteran Coalition to provide grants to veterans in the early stages of their farming operations.PET&ANIMALPets and animals have always been near and dear to our heart and our customers,and we extend sup
53、port to programs that promote livestock exhibits,pet shelters,pet adoptions,horse farms and more.Our annual Out Here with Animals event celebrates pets and animals of all kinds and includes a monthlong pet supplies drive at stores nationwide.103 MILLIONKILOWATT HOURS SAVED THROUGH ENERGY MANAGEMENT
54、SYSTEM1,448STORES CONVERTED TO LED LIGHTING,COMPLETING OUR CONVERSION OF ALL STORES92,786GALLONS OF OIL COLLECTED FROM CUSTOMERS FOR RECYCLING646,267VEHICLE BATTERIES RECYCLED5.0 MILLIONWOOD PALLETS RECYCLED25,586TONS OF CARDBOARD RECYCLED2025 GOAL:TO REDUCE OUR SCOPE 1 AND 2 CARBON EMISSION EQUIVAL
55、ENTS FROM OUR FACILITIES BY 25 PERCENT BY 2025 FROM THE 2015 BASELINE8Tractor Supply CompanyUNITED 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 December 29,2
56、018 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 ofIncorporation o
57、r 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 className of each exchan
58、ge on which registeredCommon Stock,$.008 par valueNASDAQ 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 Indicate by check mark if the regist
59、rant 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 during the preceding 12 months(or for such shorter per
60、iod that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.YES NO Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
61、 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and wi
62、ll not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-acce
63、lerated filer,a smaller reporting company,or an emerging 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 r
64、eporting companyEmerging 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 c
65、heck mark whether 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 NASDAQ Global Select Market on June 30,2018,the last business
66、day of the registrants most recently completed second fiscal quarter,was approximately$8.3 billion.For purposes of this response,the registrant has assumed that its directors,executive officers,and beneficial owners of 5%or more of its Common Stock are affiliates of the registrant.Indicate the numbe
67、r of shares outstanding of each of the registrants classes of common stock as of the latest practicable date.ClassOutstanding at January 26,2019Common Stock,$.008 par value121,279,792Documents Incorporated by Reference:Portions of the Registrants definitive Proxy Statement for its 2019 Annual Meetin
68、g of Stockholders are incorporated by reference into Part III hereof.iItem no.Form 10-K Report PageForward-Looking StatementsPART I1.Business1A.Risk Factors1B.Unresolved Staff Comments2.Properties3.Legal Proceedings4.Mine Safety DisclosuresPART II5.Market for Registrants Common Equity,Related Stockh
69、older Matters,and Issuer Purchases of Equity Securities6.Selected Financial Data7.Managements Discussion and Analysis of Financial Condition and Results of Operations7A.Quantitative and Qualitative Disclosures About Market Risk8.Financial Statements and Supplementary Data9.Changes in and Disagreemen
70、ts with Accountants on Accounting and Financial Disclosure9A.Controls and Procedures9B.Other InformationPART III10.Directors,Executive Officers,and Corporate Governance11.Executive Compensation12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters13.Certain
71、 Relationships and Related Transactions,and Director Independence14.Principal Accountant Fees and ServicesPART IV15.Exhibits and Financial Statement Schedules16.Form 10-K Summaryii11916171818191922233839707171717171727272727273iiFORWARD-LOOKING STATEMENTS OR INFORMATIONThis Form 10-K and statements
72、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 Private Securities Litigation Reform Act of 1995(the“Act”).All statements,other than state
73、ments of historical facts,which address activities,events or developments that we expect or anticipate will or may occur in the future,including such things as future capital expenditures(including their amount and nature),business strategy,expansion and growth of the business operations and other s
74、uch matters are forward-looking statements.To take advantage of the safe harbor provided by the Act,we are identifying certain factors that could cause actual results to differ materially from those expressed in any forward-looking statements,whether oral or written.These factors include,without lim
75、itation,national,regional and local economic conditions affecting consumer spending,weather conditions,the seasonal nature of the business,the timing and acceptance of new products in the stores,the timing and mix of goods sold,purchase price volatility(including inflationary and deflationary pressu
76、res),the ability to increase sales at existing stores,the ability to manage growth and identify suitable locations,failure of an acquisition to produce anticipated results,the ability to successfully manage expenses and execute key gross margin enhancing initiatives,increases in fuel,carrier and oth
77、er transportation costs,increases in wages due to competitive pressures or minimum wage laws and regulations,the availability of favorable credit sources,capital market conditions in general,the ability to open new stores in the manner and number currently contemplated,the impact of new stores on th
78、e business,competition,including competition from online retailers,effective merchandising and marketing initiatives,the ability to retain vendors,reliance on foreign suppliers,the ability to attract,train and retain qualified employees,product liability and other claims,changes in federal,state or
79、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 regulatory proceedings,management of the Companys information systems,failure to develop and implement new technologies,the
80、 failure of customer-facing technology systems,business disruption resulting from a natural or other disaster or implementation of new technologies,including but not limited to,new supply chain technologies,effective tax rate changes,including expected effects of the Tax Cuts and Jobs Act,and result
81、s of examination by taxing authorities,the imposition of tariffs on imported products or the disallowance of tax deductions on imported products,the ability to maintain an effective system of internal control over financial reporting,changes in accounting standards,assumptions and estimates,and thos
82、e described in Item 1A.“Risk Factors.”Forward-looking statements are based on currently available information and are based on our current expectations and projections about future events.We undertake no obligation to release publicly any revisions to these forward-looking statements to reflect even
83、ts or circumstances after the date hereof or to reflect the occurrence of unanticipated events.1PART IItem 1.BusinessOverviewTractor Supply Company(the“Company”or“we”or“our”or“us”)is the largest rural lifestyle retailer in the United States(“U.S.”).The Company is focused on supplying the needs of re
84、creational farmers and ranchers and all others who enjoy the rural lifestyle(which we refer to as the“Out Here”lifestyle),as well as tradesmen and small businesses.We operate retail stores under the names Tractor Supply Company,Dels Feed&Farm Supply,and Petsense and operate websites under the names
85、TractorSand P.Our stores are located primarily in towns outlying major metropolitan markets and in rural communities.The Company has one reportable industry segment which is the retail sale of products that support the rural lifestyle.At December 29,2018,we operated 1,940 retail stores in 49 states(
86、1,765 Tractor Supply and Dels retail stores and 175 Petsense retail stores).Our Tractor Supply stores typically range in size from 15,000 to 20,000 square feet of inside selling space,along with additional outside selling space,and our Petsense stores have approximately 5,500 square feet of inside s
87、elling space.For Tractor Supply retail locations,we use a standard design for most new built-to-suit locations that includes approximately 15,500square feet of inside selling space.Our online selling websites are positioned to offer an extended assortment of products beyond those offered in-store an
88、d drive traffic into our stores through our buy online and pickup in-store and ship to store programs.Business StrategyWe believe our sales and earnings growth is the result of executing our business strategy,which includes the following key components:Market NicheWe have identified a specialized ma
89、rket niche:supplying the lifestyle needs of recreational farmers and ranchers and others who enjoy the rural lifestyle,as well as tradesmen and small businesses.By focusing our product assortment on these core customers,we believe we are differentiated from general merchandise,home center and other
90、specialty retailers.We cater to the rural lifestyle and often serve a market by being a trip consolidator for many basic maintenance needs for farm,ranch and rural customers through convenient shopping options both in-store and online.CustomersOur target customers are home,land,pet,and livestock own
91、ers who generally have above average income and below average cost of living.We seek to serve a customer base that primarily lives in towns outlying major metropolitan markets and in rural communities.This customer base includes recreational farmers and ranchers and all others who enjoy the rural li
92、festyle,as well as tradesmen and small businesses.Customer ServiceWe are committed to providing our customers reliable product availability and a convenient,customer-centric experience across shopping channels.In our stores,we believe the ability of our motivated,well-trained team members to provide
93、 friendly,responsive and seasoned advice helps our customers find the right products to satisfy their everyday needs,as well as the specialty items needed to complete their rural lifestyle projects.We also engage with our customers through our e-commerce website(TractorS),which provides the opportun
94、ity to allow customers to shop at anytime,anywhere,and in any way they choose,while delivering enhanced product information,research,and decision tools that support product selection and informational needs in specific subject areas.Additionally,we maintain a Customer Solutions Center at our Store S
95、upport Center located in Brentwood,Tennessee,to support our in-store and online customers,as well as our store team members.We believe this commitment to customer service promotes strong customer loyalty through personalized experiences and provides convenience that our customers expect,which drives
96、 repeat shopping experiences.We use a third-party provider to measure our level of customer service.This process allows customers to provide feedback on their shopping experience.Based on the third-party providers data,we believe our customer satisfaction scores are among the best-in-class.We carefu
97、lly evaluate the feedback we receive from our customers and implement improvements at the individual store level based on that feedback.2Store Personnel and TrainingWe seek to hire store team members with farming and ranching backgrounds,with particular emphasis on general maintenance,equine,and wel
98、ding.We endeavor to staff our stores with courteous,highly motivated team members and devote considerable resources to training store team members,often in cooperation with our vendors.Our training programs include:A thorough on-boarding process to prepare new team members for their new role;Product
99、ive workplace environment training that is intended to educate team members on company policies and procedures 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 p
100、rogram which covers all aspects of our store operations,delivering superior service,and managing the team member experience;Structured training on customer service and selling skills;Online product knowledge training produced in conjunction with key vendors;Leadership development programs that prepa
101、re leaders to expand their current contributions;and An annual store manager meeting with vendor product presentations.Store EnvironmentOur stores are designed and managed to make shopping an enjoyable experience and to maximize sales and operating efficiencies.Stores are strategically arranged to p
102、rovide an open environment for optimal product placement and visual display.In addition,these layouts allow for departmental space to be easily reallocated and visual displays to be changed for seasonal products and promotions.Display and product placement information is routinely sent to stores to
103、ensure quality and uniformity among the stores.Our store layouts and visual displays are designed to provide our customers a feeling of familiarity and convenience to enhance the shopping experience.Informative signs are located in key product categories to conveniently assist customers with purchas
104、ing decisions and merchandise location.These signs provide customers with a comparison of product qualities,clear pricing,useful information regarding product benefits,and suggestions for appropriate accessories.Also,our store team members wear highly visible red vests,aprons,or smocks with nametags
105、,and our customer service and checkout counters are conveniently located near the front of the store.Merchandising and PurchasingWe offer an extensive assortment of products for all those seeking to enjoy the“Out Here”lifestyle,as well as tradesmen and small businesses.Our product assortment is tail
106、ored to meet the needs of our customers in various geographic markets.Our full line of product offerings includes a broad selection of high quality,reputable brand name and exclusive brand products and is supported by a strong in-stock inventory position with approximately 15,500 to 20,000 products
107、per store as well as over 100,000 products online.No single product accounted for more than 10%of our sales during fiscal 2018.Our comprehensive selection of merchandise is comprised of the following major product categories:Equine,livestock,pet,and small animal products,including items necessary fo
108、r their health,care,growth,and containment;Hardware,truck,towing,and tool products;Seasonal products,including heating,lawn and garden items,power equipment,gifts,and toys;Work/recreational clothing and footwear;and Maintenance products for agricultural and rural use.3The following table indicates t
109、he percentage of net sales represented by each of our major product categories during fiscal 2018,2017,and 2016:Percent of Net SalesFiscal YearProduct Category:201820172016Livestock and Pet47%47%46%Hardware,Tools and Truck222222Seasonal,Gift and Toy Products191919Clothing and Footwear888Agriculture4
110、45Total100%100%100%Our buying team continuously reviews and updates our product assortment to respond to customer 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 and maintenance needs with emphasis on con
111、sumable,usable,and edible(“C.U.E.”)products.Examples of C.U.E.product categories include,but are not limited to,livestock feed and bedding,pet food,lubricants,and various seasonal products,such as heating,pest control,and twine.Our products are sourced through both domestic and international vendors
112、.Our business is not dependent upon any single vendor or particular group of vendors.We purchase our products from a group of approximately 900 vendors,with no one vendor representing more than 10%of our purchases during fiscal 2018.Approximately 350 core vendors accounted for 90%of our merchandise
113、purchases during fiscal 2018.We have not experienced any significant difficulty in obtaining satisfactory alternative sources of supply for our products,and we believe that adequate sources of supply exist at substantially similar costs for nearly all of our products.We have no material long-term co
114、ntractual commitments with any of our product vendors.Our buying teams focus on merchandise procurement,vendor line reviews,and testing of new products and programs.We also employ a dedicated inventory management team that focuses exclusively on forecasting and inventory replenishment,a committed me
115、rchandise planning team that concentrates on assortment planning,and a specialized pricing team that seeks to optimize market-specific pricing for our products.Through the combined efforts of these teams,we continue to focus on improving our overall inventory productivity and in-stock inventory posi
116、tion.Intellectual Property Our subsidiary,Tractor Supply Co.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 trapezium design for retail services.We consider these service
117、 marks,and the accompanying goodwill and name recognition,to be valuable assets of our business.TSCT also owns several other service marks for retail services,some of which have been registered with the USPTO and some of which are the subject of applications for registration pending before the USPTO
118、.In addition to selling products that bear nationally-known manufacturer brands,we also sell products manufactured for us under a number of exclusive brands that we consider to be important to our business.These exclusive brands are manufactured for us by a number of vendors and provide an alternati
119、ve to the national brands,which helps provide value for our customers and positions us as a destination retailer.4Our exclusive brands represented approximately 31%of our total sales in fiscal 2018,and 32%of our total sales in both fiscal 2017 and 2016,respectively.Our exclusive brands include:4heal
120、th(pet foods and supplies)Producers Pride(livestock and horse feed 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,far
121、m and ranch equipment)Royal Wing(bird feed and supplies)Dumor(livestock and horse feed and supplies)Traveller(truck and automotive products)Groundwork(lawn and garden supplies)Treeline(hunting gear and accessories)Huskee(outdoor power equipment)TSC Tractor Supply Co(trailers,truck tool boxes,and ani
122、mal bedding)JobSmart(tools)Untamed(pet foods)Paws&Claws(pet foods and supplies)The exclusive brands identified above have been registered as trademarks with the USPTO for certain products and are the subject of applications for registration pending before the USPTO for other products.Our trademark a
123、nd service mark registrations have various expiration dates;however,provided that we continue to use the marks 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 i
124、dentified above,together with certain trade names,domain names,patents,and copyrights,has significant value and is an important component of our merchandising and marketing strategies.DistributionWe currently operate a distribution facility network for supplying stores with merchandise and deliverin
125、g product ordered through TractorS.In fiscal 2018,our Tractor Supply stores received approximately 74%of merchandise through this network while the remaining merchandise shipped directly from our vendors to our stores or customers.We believe this flow facilitates the prompt and efficient distributio
126、n of merchandise in order to enhance in-stock inventory positions,minimize freight 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 millio
127、n square feet.In fiscal 2018,we completed the expansion of our existing distribution center in Waverly,Nebraska.Additionally,we substantially completed the construction of our new northeast distribution center in Frankfort,New York,which began receiving merchandise in the fourth quarter of fiscal 20
128、18,and is expected to begin shipping merchandise to our stores in the first quarter of fiscal 2019.We select the locations of our distribution facilities in an effort to minimize logistical costs and optimize the distance from distribution facilities to our stores.Our distribution centers utilize wa
129、rehouse and labor management tools that support the planning,control and processing of inventory.We manage our inbound and outbound transportation activity in-house through the use of a transportation management system.We utilize multiple common carriers for store and direct to customer deliveries.W
130、e manage our transportation costs through carrier negotiations,monitoring of transportation routes,and scheduling of deliveries.MarketingWe utilize an“everyday value price”philosophy to consistently offer our products at competitive prices complemented by strategically planned promotions throughout
131、the year.To drive store traffic and position ourselves as a destination retailer,we promote a broad selection of merchandise through newspaper circulars,customer targeted direct mail,and e-mail,as well as various digital and social media initiatives.In addition,our Neighbors Club loyalty program enh
132、ances our ability to create engagement with our best customers.Vendors frequently support these specific programs by offering temporary cost reductions and honoring coupons.Our vendors also provide assistance with product presentation and fixture design,brochures,support for in-store events,point-of
133、-purchase materials for customer education,and product knowledge for our team members.5Omni-ChannelWe connect with our customers in their manner of choosing,whether in our store,on our e-commerce website(TractorS),or through e-mail,social media,direct mail,or our Customer Solutions Center.Our goal i
134、s to be available anytime,anywhere,and in any way our customers choose to engage with our brand.We provide our customers the opportunity to shop in a manner that fits their lifestyle and is most convenient for them.We offer an expansive product assortment and convenient and useful content that is re
135、levant to their lifestyle.We provide our customers the ability to have products shipped directly to our retail store locations or to their homes or offices.We use our distribution facility network to support our e-commerce activities.We offer a buy online and pick up in-store program which provides
136、convenient access for customers to pick up merchandise from our store locations.We also provide additional convenience by offering flexible payment options and a simplified checkout process.We are focused on delivering an enhanced mobile and tablet experience,improving the site response time,and exp
137、anding our product offerings for vendor direct to customer shipments,allowing us to serve our customers at any time they choose.Our digital capabilities have further enhanced our customer service experience,allowed us to engage with our customers anytime,anywhere,and in any way they choose,and expan
138、d our target markets outside of our current retail store locations.Management and Team MembersAs of December 29,2018,we employed approximately 15,000 full-time and 14,000 part-time Tractor Supply team members.We also employed additional part-time team members throughout the year during high sales vo
139、lume periods.We are not party to any collective bargaining agreements.Our store operations are organized into regions,each of which is led by a regional vice president.The region is further organized into districts,each of which is led by a district manager.We have two internal advisory boards,one c
140、omprised of store managers and the other comprised of district managers.These groups bring a grassroots perspective to operational initiatives and generate chain-wide endorsement of proposed best-practice solutions.All of our team members participate in one of our various bonus incentive programs,wh
141、ich provide the opportunity to receive additional compensation based upon team and/or Company performance.In addition to bonus incentive programs,we provide our eligible team members the opportunity to participate in an employee stock purchase plan and a 401(k)retirement savings plan.We also share i
142、n the cost of health insurance provided to eligible team members,and team members receive a discount on merchandise purchased from the Company.We encourage a promote-from-within environment when internal resources permit.We also provide internal leadership development programs designed to prepare ou
143、r high-potential team members for greater responsibility.Our current team of district managers and store managers have an average tenure of approximately nine and six years,respectively.We believe internal promotions,coupled with the hiring of individuals with previous retail experience,will provide
144、 the management structure necessary to support our long-term strategic growth initiatives.Continuous ImprovementWe are committed to a continuous improvement program to drive change throughout our organization.Using data analytics and team member engagement,we examine business processes and identify
145、opportunities to reduce costs,drive innovation,and improve effectiveness.We have implemented numerous continuous improvement projects,with team members from multiple areas of our business,to evaluate key operations and implement process change.Team members are empowered and expected to challenge cur
146、rent paradigms and improve processes.Management encourages the participation of all team members in the decision-making process,regularly solicits input and suggestions from our team members,and incorporates suggestions into our improvement activities.Management Information and Control SystemsWe hav
147、e invested resources in management information and control systems to provide legendary customer service.This includes use of digital technologies to integrate the customer experience in-store,online,and through our Customer Solutions Center,which offers customers the ability to shop anytime,anywher
148、e,and in any way they choose.Our key platforms include:Point-of-sale system;In-store mobility;E-commerce platform;Replenishment system;6 Merchandising presentation and inventory management tools;Warehouse management system and labor management tools for stores and supply chain;Price optimization sys
149、tem;Vendor purchase order control system;Business intelligence and analytics tools;and Customer loyalty system.These systems are integrated through an enterprise resource planning(“ERP”)system.This ERP system tracks merchandise from initial order through ultimate sale and interfaces with our financi
150、al systems.We continue to invest in technology to support store,online,and distribution facility expansion and our long-term strategic growth initiatives.We also continue to evaluate and improve the functionality of our systems to maximize their effectiveness.Such efforts include ongoing hardware an
151、d software evaluations,refreshes,and upgrades to support optimal software configurations,and application performance.We plan to continue to invest in information technology and implement efficiency-driving system enhancements.We will continue to evaluate the use of technologies to improve productivi
152、ty such as artificial intelligence,automation software,and other technologies.We also maintain and continue to strengthen the security of our information systems to help protect and prevent unauthorized access to personal information of our customers,employees,vendors,and other confidential Company
153、data.Collectively,these efforts are directed toward improving business processes,maintaining secure,efficient,and stable systems,and enabling the continued growth and success of our business.PetsensePetsense is a small-box pet specialty supply retailer focused on meeting the needs of pet owners,prim
154、arily in small and mid-sized communities,and offering a variety of pet products and services.At December 29,2018,we operated a total of 175 Petsense stores in 26 states,with approximately 500 full-time and 1,000 part-time team members,and an e-commerce website(P).Petsense owns a registration tradema
155、rk for its exclusive brand,TrueSource pet food,and the Petsense name is registered with the USPTO.Growth StrategyTractor Supply Company believes we can grow our business by being the most dependable supplier of relevant products and services for the“Out Here”lifestyle,creating customer loyalty throu
156、gh personalized experiences,and providing convenience that our customers expect at anytime,anywhere,and in any way they choose.Our long-term growth strategy is to:(1)drive profitable growth through new store openings and by expanding omni-channel capabilities,thus tying together our website product
157、content,social media,digital,and online shopping experience,attracting new customers and driving loyalty,(2)build customer-centric engagement by leveraging analytics to deliver legendary customer service,seasoned advice,and personalized experiences,(3)offer relevant assortments and services across a
158、ll channels through exclusive and national brands and continue to introduce new products through our test and learn strategy,(4)enhance our core and foundational capabilities by investing in infrastructure and process improvements which will support growth,scale,and agility while improving the custo
159、mer experience,and(5)expand through selective acquisitions,as such opportunities arise,to add complementary businesses and to enhance penetration into new and existing markets to supplement organic growth.Achieving this strategy will require a foundational focus on:(1)organizing,optimizing,and empow
160、ering our team members for growth by developing skills,talent,and leadership across the organization,and(2)implementing operational efficiency initiatives,including leverage of technology,to align our cost structure to support new business capabilities for margin improvement and cost reductions.Over
161、 the past five years,we have experienced considerable sales growth,resulting in a compounded annual growth rate of approximately 8.9%.We plan to open approximately 80 new Tractor Supply and 10 to 15 new Petsense stores in fiscal 2019,a selling square footage increase of approximately 4.7%.In fiscal
162、2018,we opened 80 new Tractor Supply stores and 18 new Petsense stores.In fiscal 2017,we opened 101 new Tractor Supply stores and 25 new Petsense stores.This represents a selling square footage increase of approximately 4.9%during fiscal 2018,and 6.3%during fiscal 2017.At December 29,2018,we operate
163、d 1,940 retail stores in 49 states(1,765 Tractor Supply and Dels retail stores and 175 Petsense retail stores).Given the size of the communities that we target,we believe that there is ample opportunity for new store growth in many existing and new markets.We have developed a proven method for selec
164、ting store sites and have identified approximately 700 additional markets for new Tractor Supply stores.We also believe that there is opportunity for up to 1,000 Petsense stores.7Approximately 55%of our stores are in freestanding buildings and 45%are located in strip shopping centers.We lease approx
165、imately 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 inventory consistency,merchandise assortment and presentation,product knowle
166、dge,and customer service.We compete with general merchandise retailers,home center retailers,specialty and discount retailers,independently owned retail farm and ranch stores,numerous privately-held regional farm store chains and farm cooperatives,as well as internet-based retailers.However,we belie
167、ve we successfully differentiate ourselves from many of these retailers by focusing on our specialized market niche for customers living the rural lifestyle.See further discussion of competition in 1A.“Risk Factors”of this Annual Report on Form 10-K.Seasonality and WeatherOur business is seasonal.Hi
168、storically,our sales and profits are the highest in the second and fourth fiscal quarters due to the sale of seasonal products.We experience our highest inventory and accounts payable balances during our first fiscal quarter for purchases of seasonal products to support the higher sales volume of th
169、e spring selling season,and again during our third fiscal quarter to support the higher sales volume of the cold-weather selling season.We believe that our business can be more accurately assessed by focusing on the performance of the halves,not the quarters,due to the fact that different weather pa
170、tterns from year-to-year can shift the timing of sales and profits between quarters,particularly between the first and second fiscal quarters and the third and fourth fiscal quarters.Historically,weather conditions,including unseasonably warm weather in the fall and winter months and unseasonably co
171、ol weather in the spring and summer months,have affected the timing and volume of our sales and results of operations.In addition,extreme weather conditions,including snow and ice storms,flood and wind damage,hurricanes,tornadoes,extreme rain and droughts,have impacted operating results both negativ
172、ely and positively,depending on the severity and length of these conditions.Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to capitalize on seasonal demand trends.Stewardship and Compliance with Environmental MattersOur operations are subject to nume
173、rous federal,state,and local laws and regulations,enacted or adopted,regulating the discharge of materials into the environment or otherwise relating to the protection of the environment.We are committed to complying with all applicable environmental laws and regulations.We are also committed to bec
174、oming a more environmentally sustainable company.This commitment is demonstrated through our Stewardship Program,which is our environmental sustainability program.Through this program,the Company has implemented a number of initiatives designed to reduce our impact on the environment.These initiativ
175、es include the installation of energy management systems,LED lighting,high efficiency heating/air conditioning systems,and recycling programs in our stores,distribution facilities,and Store Support Center.Our Store Support Center and distribution center in Casa Grande,Arizona,are LEED(Leadership in
176、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,Tennessee,and our Tractor Supply store in Hendersonville,Tennessee.Executive Officers of the RegistrantPursuant t
177、o General Instruction G(3)of Form 10-K,the following list is included in Part I of this Report in lieu of being included in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 9,2019.The following is a list of the names and ages of all executive officers of the registrant,in
178、dicating all positions and offices with the registrant held by each such person and each persons principal occupations and employment during at least the past five years:NamePositionAgeGregory A.SandfortChief Executive Officer63Steve K.BarbarickPresident Chief Operating Officer51Kurt D.BartonExecuti
179、ve Vice President Chief Financial Officer and Treasurer47Benjamin F.Parrish,Jr.Executive Vice President General Counsel and Corporate Secretary62Robert D.MillsExecutive Vice President Chief Technology,Digital Commerce and Strategy Officer46Chad M.FrazellSenior Vice President Human Resources468Gregor
180、y A.Sandfort has served as Chief Executive Officer since December 2012.Mr.Sandfort served as President and Chief Executive Officer of the Company from December 2012 to May 2016.Prior to that time,Mr.Sandfort served as President and Chief Operating Officer of the Company since February 2012.Mr.Sandfo
181、rt previously served as President and Chief Merchandising Officer of the Company since February 2009,after having served as Executive Vice President Chief Merchandising Officer of the Company since November 2007.Mr.Sandfort served as President and Chief Operating Officer at Michaels Stores,Inc.from
182、March 2006 to August 2007,and as Executive Vice President General Merchandise Manager at Michaels Stores,Inc.from January 2004 to February 2006.Mr.Sandfort has served as a Director of the Company since February 2013.Steve K.Barbarick has served as President Chief Operating Officer since August 2018,
183、prior to which he served as President and Chief Merchandising Officer since May 2016.Prior to that time,Mr.Barbarick served as Executive Vice President Chief Merchandising Officer for the Company since September 2012.Mr.Barbarick previously served as Senior Vice President Merchandising since Februar
184、y 2011,after having served as Vice President Merchandising since June 2009,and as Vice President and Divisional Merchandise Manager since 2003.Mr.Barbarick joined the Company as a Buyer in 1998.Kurt D.Barton was promoted to Executive Vice President Chief Financial Officer and Treasurer in February 2
185、019,after having 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 as Vice President Controller from February 2009,after having
186、served as Director,Internal Audit from July 2002 to February 2009.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 1993,spending six years at Ernst&Young,LLP.Benja
187、min F.Parrish,Jr.has served as Executive Vice President General Counsel and Corporate Secretary of the Company since February 2016,after having served as Senior Vice President General Counsel and Corporate Secretary of the Company since October 2010.Mr.Parrish previously served as Executive Vice Pre
188、sident 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 of Central Parking Corporation from 1998 to 2008.Chad M.Frazell has served as Senior Vice President Human Resources since August 2014.Mr.
189、Frazell previously served as Senior Vice President,Human Resources for Shopko Stores Operating Co.,LLC from April 2011 until he joined the Company.From 2008 to 2011,Mr.Frazell served as Vice President,Human Resources for Kohls Corporation,where he began as a Store Manager in 1999.Prior to 1999,Mr.Fr
190、azell served as a Store Manager and Assistant Manager for Target Corporation.Mr.Frazell began his career with Wal-Mart Stores,Inc.,where he served as an Assistant Manager and Sales Associate.Robert D.Mills has served as Executive Vice President Chief Technology,Digital Commerce and Strategy Officer
191、since August 2018,prior to which he served as Senior Vice President Chief Information Officer since February 2014.Mr.Mills previously served as Chief Information Officer for Ulta Beauty from October 2011,until he joined the Company.From 2005 to 2011,Mr.Mills was Vice President,Chief Information Offi
192、cer for the online business unit at Sears Holdings Corporation where he began as an Information Technology Customer Relationship Leader in 2001.Prior to 2001,Mr.Mills held roles at Allstate Insurance,Rockwell International Telecommunications Division,and Household Finance Corporation.Additional Info
193、rmationWe file reports with the Securities and Exchange Commission(“SEC”),including Annual Reports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and other reports as required.We are an electronic filer and the SEC maintains an Internet website at sec.gov that contains the r
194、eports,proxy and information statements,and other information we file.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 those reports as soon as reasonably practicable
195、 after such material is electronically filed with or furnished to the SEC.The information provided on our website is not part of this report,and is therefore not incorporated by reference unless such information is otherwise specifically referenced elsewhere in this report.9Item 1A.Risk FactorsOur b
196、usiness faces many risks.Those risks of which we are currently aware and deem to be material are described below.If any of the events or circumstances described in the following risk factors occur,our business,financial condition or results of operations may significantly suffer,and the trading pric
197、e of our common stock could decline.These risk factors should be read in 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 overall economic conditions that impac
198、t consumer spending,including discretionary spending.A weakening of economic conditions affecting disposable consumer income such as lower employment levels,uncertainty or changes in business or political conditions,higher interest rates,higher tax rates,higher fuel and energy costs,higher labor and
199、 healthcare costs,the impact of natural disasters or acts of terrorism,and other matters could reduce consumer spending or cause consumers to shift their spending to competitors.A general reduction in the level of discretionary spending,shifts in consumer discretionary spending to our competitors or
200、 shifts in discretionary spending to less profitable products sold by us could result in lower net sales,slower inventory turnover,greater markdowns on inventory,and a reduction in profitability due to lower margins.Failure to protect our reputation could have a material adverse effect on our brand
201、name.Our success depends in part on the value and strength of the Tractor Supply name.The Tractor Supply name is integral to our business,as well as to the implementation of our strategies for expanding our business.Maintaining,promoting,and positioning our brand will depend largely on the success o
202、f our marketing and merchandising efforts and our ability to provide high quality merchandise and a consistent,high quality customer experience.Our brand could be adversely affected if we fail to achieve these objectives or if our public image or reputation were to be tarnished by negative publicity
203、.Failure to comply or accusation of failure to comply with ethical,social,product,labor,data privacy,and environmental standards could also jeopardize our reputation and potentially lead to various adverse consumer actions.Any of these events could result in decreased revenue or otherwise adversely
204、affect our business.We 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 stores which have been open for at least twelve months.Various factors affect the comparable store sales at our existing s
205、tores,including the general retail sales environment,our ability to efficiently source and distribute products,changes in our merchandise assortment,competition,proximity of our locations to one another or to the locations of other competing retailers,increased presence of online retailers,current e
206、conomic conditions,customer satisfaction with our products,the timing of promotional events,the release of new merchandise,the success of marketing programs and weather conditions.These factors may cause the comparable store sales results at our existing stores to differ materially from prior period
207、s and from expectations.Past comparable store sales are not an indication of future results,and there can be no assurance that our comparable store sales will not decrease in the future.Purchase price volatility,including inflationary and deflationary pressures,may adversely affect our financial per
208、formance.Although we cannot determine the full effect of inflation and deflation on our operations,we believe our sales and results of operations are affected by both.We are subject to market risk with respect to the pricing of certain products and services,which include,among other items,grain,corn
209、,steel,petroleum,cotton,and other commodities,as well as diesel fuel and transportation services.Therefore,we may experience both inflationary and deflationary 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 e
210、ffects of purchase price volatility principally by taking advantage of vendor incentive programs,economies of scale from increased volume of purchases,adjusting retail prices,and selectively buying from the most competitive vendors while maintaining product quality.Should our strategy to mitigate pu
211、rchase price volatility not be effective,our financial performance could be adversely impacted.Weather conditions may have a significant impact on our financial results.Weather conditions affect the demand for,and in some cases the supply of,products,which in turn has an impact on prices.Historicall
212、y,weather conditions,including unseasonably warm weather in the fall and winter months and unseasonably cool weather in the spring and summer months,have affected the timing and volume of our sales and results of operations.In addition,extreme weather conditions,including snow and ice storms,flood a
213、nd wind damage,hurricanes,tornadoes,extreme rain,and droughts,have impacted operating results.While extreme weather conditions can positively impact our operating results by 10increasing demand in affected locations for products needed to cope with the weather condition and its effects,they can also
214、 negatively affect our business depending on the severity and length of these conditions,as a result of store closings or the inability of customers to shop at our stores due to weather conditions.Our strategy is to manage product flow and adjust merchandise assortments and depth of inventory to cap
215、italize on seasonal demand trends.Should such a strategy not be effective,the weather may have a material adverse effect on our financial condition and results of operations.Our merchandising and marketing initiatives may not provide expected results.We believe our past performance has been based on
216、,and future success will depend upon,in part,the ability to develop and execute merchandising initiatives with effective marketing programs.These merchandising initiatives and marketing programs may not deliver expected results,and there is no assurance that we will correctly identify and respond in
217、 a timely manner to evolving trends and consumer preferences and expectations.If we misjudge the market or our marketing programs are not successful,we may overstock unpopular products and be forced to take inventory price reductions that have a material adverse effect on our profitability.Failure t
218、o execute and promote such initiatives in a timely manner could harm our ability to grow the business and could have a material adverse effect on our results of operations and financial condition.Shortages of key merchandise could also have a material adverse impact on operating results and financia
219、l condition.Capital required for growth may not be available.The construction or acquisition of new stores,store support center facilities,distribution facilities,or other facilities,the remodeling and renovation of existing facilities,and investments in information technology require significant am
220、ounts of capital.In the past,our growth has been funded through internally generated cash flow and bank borrowings.Disruptions in the capital and credit markets could adversely affect the ability of the banks to meet their commitments.Our access to funds under our debt facilities is dependent on the
221、 ability of the banks that are parties to the facility to meet their funding commitments.Those banks may not be able to meet their funding commitments to us if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests within a short period of ti
222、me.In addition,tight lending practices may make it difficult for our real estate developers to obtain financing under acceptable loan terms and conditions.Unfavorable lending conditions could impact the timing of our store openings and materially adversely affect our ability to open new stores in de
223、sirable locations.Longer-term disruptions in the capital and credit markets as a result of uncertainty,changing or increased regulation,reduced funding alternatives,or failures of significant financial institutions could adversely affect our access to liquidity needed for our business.Any disruption
224、 could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged.Such measures could include deferring capital expenditures and reducing or eliminating future share repurchases,cash divide
225、nds,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 our business strategy includes the expansion of our store base through new store openings.This expansion s
226、trategy is dependent on our ability to find suitable locations,and we face competition from many retailers for such sites.If we are unable to implement this strategy,our ability to increase our sales,profitability,and cash flow could be impaired significantly.To the extent that we are unable to open
227、 new stores in the manner we anticipate(due to,among other reasons,site approval or unforeseen delays in construction),our sales growth may be impeded.As we execute this expansion strategy,we may also experience managerial or operational challenges which may prevent any expected increase in sales,pr
228、ofitability,or cash flow.Our ability to manage our planned expansion depends on the adequacy of our existing information systems,the efficiency and expansion of our distribution systems,the adequacy of the hiring and training process for new personnel(especially store managers),the effectiveness of
229、our controls and procedures,and the ability to identify customer demand and build market awareness in different geographic areas.There can be no assurance that we will be able to achieve our planned expansion,that the new stores will be effectively integrated into our existing operations or that suc
230、h stores will be profitable.Although we have a rigorous real estate site selection and approval process,there can be no assurance that our new store openings will be successful or result in incremental sales and profitability for the Company.New stores build their sales volumes and refine their merc
231、handise selection over time and,as a result,generally have lower gross margins and higher operating expenses as a percentage of net sales than our more mature stores.As we continue to open new stores,there may be a negative impact on our results from a lower contribution margin of these new stores u
232、ntil their sales levels ramp to chain average,if at all,as well as from the impact of related pre-opening costs.11Our failure to attract and retain qualified team members,increases in wage and labor costs and changes in laws and other labor issues could adversely affect our financial performance.Our
233、 ability to continue expanding operations depends on our ability to attract and retain a large and growing number of qualified team members.Our ability to meet labor needs while controlling wage and related labor costs is subject to numerous external factors,including the availability of a sufficien
234、t number of qualified persons in the work force,unemployment levels,prevailing wage rates,increases in legally required minimum wage rates,changing demographics,health and other insurance costs,changes in employment legislation and the potential for changes in local labor practices or union activiti
235、es.If we are unable to locate,attract or retain qualified personnel,or if costs of labor or related costs increase significantly,our financial performance could be adversely affected.We are subject to federal,state,and local laws governing employment practices and working conditions.These laws cover
236、 wage and hour practices,labor relations,paid and family leave,workplace safety and immigration,among others.The laws and regulations being passed at the state and local level create unique challenges for a multi-state employer.We must continue to monitor and adapt our employment practices to comply
237、 with these various laws and regulations.If our costs of labor or related costs 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.The unanticipated loss of current members of ou
238、r senior management team and other key team members or the failure to successfully manage an 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,and other key t
239、eam members.Competition for senior management and key team members in our industry is strong and we may not be able to retain our key team members or attract new qualified team members.We must continue to recruit,retain,and motivate management and other team members sufficiently,both to maintain our
240、 current business and to execute our long-term strategic growth initiatives.The loss of any of our executive officers or other key senior management without sufficient advance notice could prevent or delay the implementation and completion of our strategic initiatives or divert managements attention
241、 to seeking qualified replacements.Additionally,any failure by us to manage a successful leadership transition of an executive officer and to timely identify a qualified permanent replacement could harm our business and have a material adverse effect on our results of operations.We may pursue strate
242、gic acquisitions and the failure of an acquisition to produce the anticipated results or the inability to fully integrate the acquired companies could have an adverse impact on our business.We may,from time to time,acquire businesses we believe to be complementary to our business.The success of an a
243、cquisition is based on our ability to make accurate assumptions regarding the valuation,operations,growth potential,integration,and other factors relating to the target business.Acquisitions may result in difficulties in assimilating acquired companies and may result in the diversion of our capital
244、and our managements attention from other business issues and opportunities.We may not 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 acquisitio
245、ns,we could experience increased costs associated with operating inefficiencies which could have an adverse effect on our financial results.Also,while we employ several different methodologies to assess potential business opportunities,the new businesses may not meet our expectations and,therefore,a
246、dversely affect our financial performance.Competition may hinder our ability to execute our business strategy and adversely affect our operations.We operate in the highly competitive retail merchandise sector with numerous competitors.These competitors include general merchandise retailers,home cent
247、er retailers,specialty and discount retailers,independently-owned retail farm and ranch stores,numerous privately-held regional farm store chains,and farm cooperatives,as well as internet-based retailers.We compete for customers,merchandise,real estate locations,and employees.This competitive enviro
248、nment subjects us to various other risks,including the inability to continue our store and sales growth and to provide attractive merchandise to our customers at competitive prices that allow us to maintain our profitability.Our failure to compete effectively in this environment could adversely impa
249、ct our financial performance.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 vendors in which the vendors agree to comply with applicable laws,including labor an
250、d environmental laws,and to indemnify us against 12certain liabilities and costs.Our ability to recover liabilities and costs under these vendor agreements is dependent upon the financial condition and integrity of the vendors.We rely on long-term relationships with our suppliers but have no signifi
251、cant long-term contracts with such suppliers.Our future success will depend in large measure upon our ability to maintain our existing supplier relationships or to develop new ones.This reliance exposes us to the risk of inadequate and untimely supplies of various products due to political,economic,
252、social,or environmental conditions,transportation delays,or changes in laws and regulations affecting distribution.Our vendors may be forced to reduce their production,shut down their operations or file for bankruptcy protection,which could make it difficult for us to serve the markets needs and cou
253、ld have a material adverse effect on our business.While the Company selects these third-party vendors carefully,it does not control their actions.Any problems caused by these third-parties,including those resulting from breakdowns or other disruptions in communication services provided by a vendor,f
254、ailure of a vendor to handle current or higher volumes,and cyber attacks or security breaches at a vendor could adversely affect the Companys ability to deliver products and services to its customers and otherwise conduct its business.We rely on foreign manufacturers for various products that we sel
255、l.In addition,many of our domestic suppliers purchase a portion of their products from foreign sources.As an importer,our business is subject to the risks generally associated with doing business internationally,such as domestic and foreign governmental regulations,economic disruptions,delays in shi
256、pments,transportation capacity and costs,currency exchange rates,and changes in political or economic conditions in countries from which we purchase products.If any such factors were to render the conduct of business in particular countries undesirable or impractical or if additional U.S.quotas,duti
257、es,taxes,or other charges or restrictions were imposed upon the importation of our products in the future,our financial condition and results of operations could be materially adversely affected.The current political landscape in the U.S.has introduced greater uncertainty with respect to tax and tra
258、de policies,tariffs and regulations affecting trade between the U.S.and other countries.We source a portion of our merchandise from manufacturers located outside the U.S.,primarily in Asia and Central America.Major developments in tax policy or trade relations,such as the disallowance of tax deducti
259、ons for imported merchandise or the imposition of tariffs on imported products,could have a material adverse effect on our business,results of operations and liquidity.We rely on manufacturers located in foreign countries,including China,for merchandise.Additionally,a portion of our domestically pur
260、chased merchandise is manufactured abroad.Our business may be materially adversely affected by risks associated with international trade,including the impact of tariffs recently imposed and proposed by the U.S.with respect to certain consumer goods imported from China.We source a portion of our merc
261、handise 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.recently imposed tariffs on certain products imported into the U.S.from China and could propose additional tariffs.The imposition of tariffs o
262、n imported products is expected to increase our costs and could result in reduced sales and profits.As a result,we may need to seek alternative suppliers or vendors,raise retail selling prices or make changes to our operations.Any of these actions could have a material adverse effect on our sales an
263、d profitability,results of operations,and financial condition.In addition,the imposition of tariffs by the U.S.has resulted in the adoption of tariffs by China on U.S.exports and could result in the adoption of tariffs by other countries as well.A resulting trade war could have a significant adverse
264、 effect on world trade and the world economy.Further,the imposition of tariffs or other changes in world trade could have an impact on certain U.S.industries and consumers and could negatively impact the consumer demand for products that we sell.We continue to evaluate the potential impact of the ef
265、fective and proposed tariffs on our supply chain,costs,sales,and profitability as well as our strategies to mitigate any negative impact,including negotiating with our vendors,seeking alternative sourcing options and adjusting retail selling prices.Given the uncertainty regarding the scope and durat
266、ion of the current and proposed tariffs,as well as the potential for additional trade actions by the U.S.or other countries,the impact on our business,results of operations and financial condition is uncertain but could be significant.Thus,we can provide no assurance that any strategies we implement
267、 to mitigate the impact of such tariffs or other trade actions will be successful in whole or in part in mitigating the impact of any current or future tariffs.To the extent that our supply chain,costs,sales,or profitability are negatively affected by the tariffs or other trade actions,our business,
268、financial condition,and results of operations may be materially adversely affected.A significant disruption to our distribution network or to the timely receipt of inventory could adversely impact sales or increase our transportation costs,which would decrease our profits.We rely on our distribution
269、 and transportation network to provide goods to our stores in a timely and cost-effective manner through deliveries to our distribution facilities from vendors and then from the distribution facilities or direct ship vendors to our stores by various means of transportation,including shipments by sea
270、,air,rail,and truck.Any disruption,unanticipated expense,or 13operational failure related to this process could affect store operations negatively.For example,unexpected delivery delays(including delays due to weather,fuel shortages,or other reasons)or increases in transportation costs(including inc
271、reased fuel costs or a decrease in transportation capacity for overseas shipments)could significantly decrease our ability to provide adequate products for sale,or products at a desired price,resulting in lower sales and profitability.In addition,labor shortages or work stoppages in the transportati
272、on industry or long-term disruptions to the national and international transportation infrastructure that lead to delays or interruptions of deliveries could negatively affect our business.Also,a fire,tornado,or other disaster at one of our distribution facilities could disrupt our timely receiving,
273、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 not provide the anticipated benefits or might fail.We maintain a network of dist
274、ribution facilities and have plans to build new distribution facilities and expand existing facilities to support our long-term strategic growth initiatives.Delays in opening new or expanded distribution facilities could adversely affect our future operations by slowing store growth,which may in tur
275、n reduce revenue growth.In addition,distribution-related construction or expansion projects entail risks which could cause delays and cost overruns,such as:shortages of materials;shortages of skilled labor or work stoppages;unforeseen construction,scheduling,engineering,environmental,or geological p
276、roblems;weather interference;fires or other casualty losses;and unanticipated cost increases.The completion date and ultimate cost of future projects could differ significantly from initial expectations due to construction-related or other reasons.We cannot guarantee that all projects will be comple
277、ted on time or within established budgets.We continue to make significant technology investments in our supply chain.These initiatives are designed to streamline our distribution process so that we can optimize the delivery of goods and services to our stores,distribution facilities,and customers in
278、 a timely manner and at a reasonable cost.The cost and potential problems and interruptions associated with the implementation of these initiatives,including those associated with managing third-party service providers and employing new web-based tools and services,could disrupt or reduce the effici
279、ency of our operations in the near term.In addition,our improved supply chain technology might not provide the anticipated benefits,it might take longer than expected to realize the anticipated benefits,or the initiatives might fail altogether.We are subject to personal injury,workers compensation,p
280、roduct 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,harassment,wrongful termination,and other claims in the ordinary course of busines
281、s.Product liability claims from customers and product recalls for merchandise alleged to be defective or harmful could lead to the disposal or write-off of merchandise inventories,the incurrence of fines or penalties,and damage to our reputation.We maintain general liability and workers compensation
282、 insurance with a self-insured retention for each policy type and a deductible for each occurrence.We also maintain umbrella limits above the primary general liability and product liability coverage.In many cases,we have indemnification rights against the manufacturers of the products and their prod
283、ucts 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 financial viability of the insurers,manufacturers,and landlords and the specific allegations of a claim.No a
284、ssurance can be given that our insurance coverage or the manufacturers or landlords indemnity will be available or sufficient in any claims brought against us.Additionally,we are subject to U.S.federal,state,and local employment laws that expose us to potential liability if we are determined to have
285、 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 of any alleged violation,may have a material adverse effect on our business or result
286、s of operations.Failure to maintain an effective system of internal control over financial reporting could materially impact our business and results.The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting.An internal control system,
287、no matter how well designed and operated,can provide only reasonable,not absolute,assurance that the objectives of the control system are met.Further,the design of a control system must reflect the fact that there are resource constraints,and the benefits of controls must be considered relative to t
288、heir costs.Because of the inherent limitations in all internalcontrol systems,internal control over financial reporting may not prevent or detect misstatements.Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial res
289、ults accurately and timely or to detect and prevent fraud,and could expose us to litigation or adversely affect the market price of our common stock.14Any failure to maintain the security of the information relating to our business,customers,employees,and vendors that we hold,whether as a result of
290、cybersecurity attacks or otherwise,could damage our reputation with customers,employees,and vendors,could cause us to incur substantial additional costs and to become subject to litigation,and could materially affect our operating results,financial condition,and liquidity.We depend on information sy
291、stems and technology,some of which are managed or provided by third-parties,for many activities important to our business.As do most retailers,we receive and store in our information systems certain personal and other sensitive information about our business,customers,employees,and vendors.Additiona
292、lly,we also receive and process information permitting cashless payments as part of our in-store and online operations at TractorS,some of which depend upon the secure transmission of confidential information over public networks.The information that we receive and store makes us subject to cybersec
293、urity 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 wide range of expertise and motives.We are the target of attempted cyber and other security
294、threats and continuously monitor our information technology networks and infrastructure in an effort to prevent,detect,address and mitigate the risk of unauthorized access,misuse,computer viruses and other events that could have a security impact.However,these security measures cannot provide absolu
295、te assurance or guarantee that we will be successful in preventing,detecting,or responding to every such breach or disruption and/or preventing the misuse of confidential information of our business,customers,employees,or vendors.Similar risks exist with respect to the third-party vendors that we re
296、ly upon for aspects of our information technology support services 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 those of businesses and vendors with whom we interact,whic
297、h results in confidential information being accessed,obtained,damaged,or used by unauthorized or improper parties;loss or unavailability of data;disruptions to our business activities;or any other outcome stemming from a cybersecurity incident could materially adversely affect our reputation with ou
298、r 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 the scope or limits of insurance coverage.Moreover,a security breach could require that we expend significant add
299、itional resources 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 employee and customer data.These laws will likely increa
300、se the costs of doing business and,if we fail to comply with these laws and regulations,to implement appropriate safeguards,or to detect and provide prompt notice of unauthorized access as required by some of these new laws,we could be subject to potential claims for damages and other remedies,which
301、 could harm our business.We are subject to payments-related risks that could increase our operating costs,expose us to fraud,subject us to potential liability,and potentially disrupt our business.We accept payments using a variety of methods,including credit cards,debit cards,credit accounts,our pri
302、vate 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 requirements,including,but not limited to,compliance with
303、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 seeking to discover and take advantage of securi
304、ty vulnerabilities that may exist in some of these payment systems.For certain payment methods,including credit and debit cards,we pay interchange and other fees,which may increase over time and raise our operating costs and lower profitability.We rely on third parties to provide payment processing
305、services,including the processing of credit cards,debit cards,electronic checks,gift cards and promotional financing,and it could disrupt our business if these companies become unwilling or unable to provide these services to us.If we fail to comply with these rules or requirements,adequately encryp
306、t payment transaction data,or if our data security systems are breached or compromised,we may be liable for card issuing banks costs,subject to fines and higher transaction fees,and lose our ability to accept credit and debit card payments from our customers,process electronic funds transfers,or fac
307、ilitate 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 are dependent on services managed or pr
308、ovided by third-parties,serve an important role in the operation and administration of our business.These systems are vulnerable to damages from any number of sources,including,but not limited to,human error,cybersecurity attacks,computer viruses,unauthorized access,fire,flood,power outages,telecomm
309、unication failures,facility or equipment damage,natural disasters,terrorism,and war.In addition,we continually 15make investments in technology to implement new processes and systems,as well as to maintain and update our existing processes and systems.Implementing process and system changes increase
310、s the risk of disruption.If our information technology systems are interrupted or fail and our redundant systems or recovery plans are not adequate to address such interruptions or failures on a timely basis,our revenues and profits could be reduced and the reputation of our brand and our business c
311、ould be materially adversely affected.Additionally,remediation of any problems with our systems could result in significant,unplanned expenses.Customer-facing technology systems are an important part of our sales and marketing strategy and the failure of those systems to perform effectively and reli
312、ably could keep us from delivering positive customer experiences.Through our continued information technology enhancements,we are able to provide an improved overall shopping environment and an omni-channel experience that empowers our customers to shop and interact with us from computers,tablets,sm
313、art phones,and other mobile communication devices.We use our website,TractorS,both as a sales channel for our products and as a method of providing product,project,and other relevant information to our customers to drive both in-store and online sales.Omni-channel retailing is continually evolving a
314、nd expanding,and we must effectively respond to changing customer expectations and new developments.Disruptions,failures,or other performance issues with these customer-facing technology systems could impair the benefits that they provide to our in-store and online business and negatively affect our
315、 relationship with our customers.If we are unable to maintain or upgrade our management information systems and software programs or if we are unable to convert to alternate systems in an efficient and timely manner,our operations may be disrupted or become less efficient and our long-term strategic
316、 growth initiatives may not be successful.We depend on management information systems for many aspects of our business.We rely on certain software vendors to maintain and periodically upgrade many of these systems so that we can continue to support our business.We could be materially adversely affec
317、ted if we experienced a disruption or data loss relating to our management information systems and are unable to recover timely.We could also be adversely impacted if we are unable to improve,upgrade,maintain and expand our management information systems,particularly in light of the contemplated con
318、tinued store growth.The success of our long-term strategic growth initiatives designed to increase our sales and improve margin are dependent in varying degrees on the timely delivery and the functionality of information technology systems to support them.Extended delays or cost overruns in securing
319、,developing and otherwise implementing technology solutions to support the long-term strategic 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 we will continue to
320、 repurchase our common stock pursuant to our stock repurchase program.Although our Board of Directors has indicated an intention to pay future quarterly cash dividends on our common stock,any determination to pay or increase cash dividends on our common stock in the future will be based primarily up
321、on our financial condition,results of operations,business requirements,and our Board of Directors continuing determination that the declaration of dividends is in the best interests of our stockholders and is in compliance with all laws and agreements applicable to the dividend.Furthermore,although
322、our Board of Directors has authorized a share repurchase program of up to$3 billion through December 2020,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.T
323、he price at which our common stock trades may be volatile and could be subject to significant fluctuations in response to our operating results,general trends and prospects for the retail industry,announcements by our competitors,analyst recommendations,our ability to meet or exceed analysts or inve
324、stors expectations,the condition of the financial markets,and other 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 inves
325、tors perception of the Companys earnings growth prospects change,the Companys earnings multiple may decline and its stock price could be adversely affected.In addition,the stock market in recent years has experienced extreme price and volume fluctuations that often have been unrelated or disproporti
326、onate to the operating performance of companies.These fluctuations,as well as general economic and market conditions,may adversely affect the market price of our common stock notwithstanding our actual operating performance.16Our costs of doing business could increase as a result of federal,state,lo
327、cal,or foreign laws and regulations.We are subject to numerous federal,state,local,and foreign laws and governmental regulations including those relating to environmental protection,personal injury,intellectual property,consumer product safety,building,land use and zoning requirements,workplace regu
328、lations,wage and hour,privacy and information security,and employment law matters.If we fail to comply with existing or future laws or regulations,or if these laws or regulations are violated by importers,manufacturers or distributors,we may be subject to governmental or judicial fines or sanctions,
329、while incurring substantial legal fees and costs.In addition,our capital expenditures could increase due to remediation measures that may be required if we are found to be noncompliant with any existing or future laws or regulations.We are also subject to the Foreign Corrupt Practices Act(the“FCPA”)
330、,which prohibits U.S.companies and their intermediaries from making improper payments to foreign officials for the purposes of obtaining or retaining business,and the anti-bribery laws of other jurisdictions.Failure to comply with the FCPA and similar laws could subject us to,among other things,pena
331、lties and legal expenses that could harm our reputation and have a material adverse effect on our business,financial condition,and results of operations.Potential noncompliance with environmental regulations could materially impact our results of operations or financial condition.Our business is sub
332、ject to various federal,state,and local laws,regulations,and other requirements pertaining to protection of the environment and public health,including,for example,regulations governing the management of waste materials and waste waters.Governmental agencies on the federal,state,and local levels hav
333、e,in recent years,increasingly focused on the retail sectors compliance with such laws and regulations,and have at times pursued enforcement activities.We periodically receive information requests and notices of potential noncompliance with environmental laws and regulations from governmental agencies,which are addressed on a case-by-case basis with the relevant agency.Any of these events could ha
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