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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------

FORM 10-Q

(Mark One)

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended March 27, 2004
--------------------------------------------------

OR

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from ______________________ to ______________________



Commission file number 000-23314
----------


TRACTOR SUPPLY COMPANY
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)


Delaware 13-3139732
- ---------------------------------------- --------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)


320 Plus Park Boulevard,
Nashville, Tennessee 37217
- ---------------------------------------- --------------------------------------
(Address of Principal Executive Offices) (Zip Code)


Registrant's Telephone Number,
Including Area Code: (615) 366-4600
--------------------------------------


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 period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES X NO
------- -------

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES X NO
------- -------


Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Class Outstanding at April 24, 2004
- ---------------------------------------- --------------------------------------
Common Stock, $.008 par value 38,209,104



Page 1 of 18




TRACTOR SUPPLY COMPANY

INDEX


Page No.
--------

Part I. Financial Information:

Item 1. Financial Statements:

Consolidated Balance Sheets -
March 27, 2004 and December 27, 2003..............................3

Consolidated Statements of Income -
For the Fiscal Three Months Ended
March 27, 2004 and March 29, 2003.................................4

Consolidated Statements of Cash Flows -
For the Fiscal Three Months Ended
March 27, 2004 and March 29, 2003.................................5

Notes to Unaudited Consolidated Financial Statements...............6-12

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................13-16

Item 3. Quantitative and Qualitative Disclosures About Market Risk........16-17

Item 4. Controls and Procedures..............................................17

Part II. Other Information:

Item 5. Other Information....................................................18

Item 6. Exhibits and Reports on Form 8-K.....................................18

Signature .....................................................................18



Page 2 of 18




PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRACTOR SUPPLY COMPANY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)


MARCH 27, DECEMBER 27,
2004 2003
--------------- ---------------
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents....................................................... $ 24,066 $ 19,980
Inventories..................................................................... 402,115 324,518
Prepaid expenses and other current assets....................................... 31,023 27,725
Assets held for sale............................................................ 3,058 3,636
Deferred income taxes........................................................... 7,467 7,467
----------- -----------
Total current assets..................................................... 467,729 383,326
----------- -----------
Land.............................................................................. 15,857 14,307
Buildings and improvements........................................................ 141,330 124,968
Furniture, fixtures and equipment................................................. 93,790 89,633
Construction in progress.......................................................... 6,222 3,563
----------- -----------
257,199 232,471
Accumulated depreciation and amortization......................................... (89,114) (83,880)
----------- -----------
Property and equipment, net..................................................... 168,058 148,591
Other assets...................................................................... 4,175 4,292
----------- -----------
Total assets............................................................. $ 639,989 $ 536,209
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................ $ 231,165 $ 131,564
Accrued employee compensation................................................... 3,000 12,716
Other accrued expenses.......................................................... 62,821 61,208
Current portion of capital lease obligations.................................... 339 339
----------- -----------
Total current liabilities................................................ 297,325 205,827
----------- -----------
Revolving credit loan............................................................. 15,961 19,403
Capital lease obligations......................................................... 1,718 1,807
Deferred income taxes............................................................. 8,879 8,879
Other long-term liabilities....................................................... 5,588 4,909
----------- -----------
Total liabilities........................................................ 329,471 240,825
----------- -----------
Stockholders' equity:
Preferred stock, 40,000 shares authorized; $1.00 par value; no shares issued..... -- --
Common stock, 100,000,000 shares authorized; $.008 par value; 38,121,057
and 37,390,469 shares issued and outstanding in 2004 and 2003, respectively.... 305 299
Additional paid-in capital........................................................ 73,390 62,083
Retained earnings................................................................. 236,823 233,002
----------- -----------
Total stockholders' equity............................................... 310,518 295,384
----------- -----------
Total liabilities and stockholders' equity............................... $ 639,989 $ 536,209
=========== ===========


The accompanying notes are an integral part of this statement.


Page 3 of 18




TRACTOR SUPPLY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


FOR THE FISCAL THREE MONTHS ENDED
---------------------------------
MARCH 27, MARCH 29,
2004 2003
------------- --------------
(UNAUDITED)

Net sales.............................................................. $ 330,554 $ 273,760
Cost of merchandise sold............................................... 231,385 192,963
------------- --------------
Gross margin...................................................... 99,169 80,797
Selling, general and administrative expenses........................... 86,891 72,138
Depreciation and amortization.......................................... 5,803 4,454
------------- --------------
Income from operations............................................ 6,475 4,205
Interest expense, net.................................................. 381 1,010
------------- --------------
Income before income taxes and cumulative effect of a change in
accounting principle.......................................... 6,094 3,195
Income tax expense..................................................... 2,273 1,182
------------- --------------
Income before cumulative effect of a change in accounting
principle....................................................... 3,821 2,013
Cumulative effect on prior years of retroactive application of a
change in accounting for funds received from a vendor, net
of income taxes of $1,165...................................... -- (1,888)
------------- -------------
Net income............................................................. $ 3,821 $ 125
============= ==============
Income per share - basic, before cumulative effect of a change in
accounting principle.............................................. $ 0.10 $ 0.05
Cumulative effect of accounting change, net of income taxes............ -- (0.05)
------------- -------------

Net income per share - basic........................................... $ 0.10 $ --
============= ==============

Income per share - diluted, before cumulative effect of a change
in accounting principle........................................... $ 0.09 $ 0.05

Cumulative effect of accounting change, net of income taxes............ -- (0.05)
------------- --------------

Net income per share - diluted......................................... $ 0.09 $ --
============= ==============
Pro forma amounts assuming the change in accounting principle was
applied retroactively:

Net income.................................................... $ 3,821 $ 2,013
Net income per share - basic.................................. $ 0.10 $ 0.05
Net income per share - assuming dilution...................... $ 0.09 $ 0.05


The accompanying notes are an integral part of this statement.


Page 4 of 18




TRACTOR SUPPLY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)


FOR THE FISCAL THREE MONTHS ENDED
---------------------------------
MARCH 27, MARCH 29,
2004 2003
----------- -----------
(UNAUDITED)

Cash flows from operating activities:
Net income............................................................. $ 3,821 $ 125
Tax benefit of stock options exercised................................. 6,725 942
Adjustments to reconcile net income to net cash used in
operating activities:
Cumulative effect of a change in accounting principle.............. -- 1,888
Depreciation and amortization...................................... 5,803 4,454
Gain on sale of property and equipment............................ (265) (412)
Asset impairment related to closed stores......................... 71 78
Deferred income taxes............................................. -- 203
Change in assets and liabilities:
Inventories.................................................... (77,597) (80,611)
Prepaid expenses and other current assets...................... (3,298) (2,891)
Accounts payable............................................... 99,601 93,688
Accrued expenses............................................... (8,103) (15,988)
Income taxes currently payable................................. -- (6,148)
Other.......................................................... 801 109
----------- -----------
Net cash provided by (used in) operating activities.................... 27,559 (4,563)
----------- -----------
Cash flows from investing activities:
Capital expenditures............................................... (25,984) (7,343)
Proceeds from sale of property and equipment....................... 1,454 845
----------- -----------
Net cash used in investing activities.................................. (24,530) (6,498)
----------- -----------
Cash flows from financing activities:
Borrowings under revolving credit agreement........................ 88,142 87,494
Repayments under revolving credit agreement........................ (91,584) (66,036)
Repayment of long-term debt........................................ -- (536)
Principal payments under capital lease obligations................. (89) (85)
Net proceeds from issuance of common stock......................... 4,588 1,678
----------- -----------
Net cash provided by financing activities.............................. 1,057 22,515
----------- -----------
Net increase in cash and cash equivalents.............................. 4,086 11,454
Cash and cash equivalents at beginning of period....................... 19,980 13,773
----------- -----------
Cash and cash equivalents at end of period............................. $ 24,066 $ 25,227
=========== ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest............................................................. $ 271 $ 900
Income taxes......................................................... 175 8,136


The accompanying notes are an integral part of this statement.


Page 5 of 18


TRACTOR SUPPLY COMPANY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States and the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. These statements should be read in
conjunction with the Company's annual report on Form 10-K for the fiscal year
ended December 27, 2003. The results of operations for the fiscal three-month
periods are not necessarily indicative of results for the full fiscal year.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All material intercompany accounts and
transactions have been eliminated.

MANAGEMENT ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States inherently
requires estimates and assumptions by management that affect the reported
amounts of assets and liabilities, revenues and expenses and related
disclosures. Actual results could differ from those estimates.

Significant estimates and assumptions by management primarily impact the
following key financial statement areas:

INVENTORY VALUATION
The Company identifies potentially excess and slow-moving inventory by
evaluating turn rates and overall inventory levels. Excess quantities are
identified through the application of benchmark turn targets and historical
sales experience. Further, exposure to inadequate realization of carrying
value is identified through analysis of gross margin achievement and
markdown experience, in combination with all merchandising initiatives. The
estimated reserve is based on management's current knowledge with respect
to inventory levels, sales trends and historical experience relating to the
sale of the excess and/or slow-moving inventory. Management does not
believe the Company's merchandise inventories are subject to significant
risk of obsolescence in the near-term, and management has the ability to
adjust purchasing practices based on anticipated sales trends and general
economic conditions. However, changes in consumer purchasing patterns could
result in the need for additional reserves.

The Company estimates its expected shrinkage of inventory between physical
inventory counts by assessing the chain-wide average shrinkage experience
rate, applied to the related periods' sales volumes. Such assessments are
updated on a regular basis for the most recent individual store
experiences.

The Company receives funding from its vendors for promotion of the
Company's brand as well as the sale of their products. Vendor funding is
accounted for as a discount on the purchase price of inventories and is
recognized in cost of sales as inventory is sold. The amount of expected
funding is estimated based upon initial guaranteed commitments, as well as
anticipated purchase levels with applicable vendors. The estimated purchase
volume is based on management's current knowledge with respect to inventory
levels, sales trends and expected customer demand,


Page 6 of 18


as well as planned new store openings. Although management believes it has
the ability to reasonably estimate its purchase volume, it is possible that
actual results could significantly differ from the estimated amounts.

SALES RETURNS
The Company generally honors customer refunds within 30 days of the
original purchase, with the supporting receipt. The Company estimates its
reserve for likely customer returns based on the average refund experience
in relation to sales for the related period. Due to the seasonality of the
Company's sales, the refund experience can vary, depending on the fiscal
quarter of measurement.

SELF-INSURANCE
The Company is self-insured for certain losses relating to workers'
compensation, medical and general liability claims. However, the Company
has stop-loss limits and umbrella insurance coverage for certain risk
exposures subject to specified limits. Self-insurance claims filed and
claims incurred but not reported are accrued based upon management's
estimates of the aggregate liability for uninsured claims incurred using
actuarial assumptions followed in the insurance industry and historical
experience. Although management believes it has the ability to adequately
record estimated losses related to claims, it is possible that actual
results could significantly differ from recorded self-insurance
liabilities.

REVENUE RECOGNITION

The Company recognizes revenue when sales transactions occur and customers take
possession of the merchandise. A provision for anticipated merchandise returns
is provided in the period during which the related sales are recorded.

STORE PRE-OPENING COSTS

Non-capital expenditures incurred in connection with start-up activities are
expensed as incurred.

STORE CLOSING COSTS

The Company recognizes store closing costs in accordance with the provisions of
Statement of Financial Accounting Standards ("SFAS") 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which requires that a liability
for a cost associated with an exit or disposal activity be recognized with the
liability is incurred.

CASH AND CASH EQUIVALENTS

The Company considers temporary cash investments with a maturity of three months
or less when purchased to be cash equivalents. The majority of payments due from
banks for customer credit card transactions process within 24 to 48 hours and
are accordingly classified as cash and cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
short-term receivables and payables and long-term debt instruments, including
capital leases. The carrying values of cash and cash equivalents, receivables,
and trade payables equal current fair value. The terms of the Company's senior
revolving credit agreement includes a variable interest rate which approximates
the current market rate.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company complies with SFAS Nos. 133, 137, and 138 (collectively "SFAS 133")
pertaining to the accounting for derivatives and hedging activities. SFAS 133
requires the Company to recognize all derivative instruments in the balance
sheet at fair value. SFAS 133 impacted the accounting for the Company's interest
rate swap agreement, which was designated as a cash flow hedge. The interest
rate swap expired in November 2003.


Page 7 of 18


INVENTORIES

The value of the Company's inventories was determined using the lower of
last-in, first-out (LIFO) cost or market. Inventories are not in excess of
market value. Quarterly inventory determinations under LIFO are based on
assumptions as to projected inventory levels at the end of the fiscal year,
sales for the year and the rate of inflation/deflation for the year. If the
first-in, first-out (FIFO) method of accounting for inventory had been used,
inventories would have been approximately $773,000 higher than reported at March
27, 2004. At December 27, 2003 LIFO and FIFO inventory values were the same.

FREIGHT COSTS

The Company incurs various types of transportation and delivery costs in
connection with inventory purchases and distribution. Such costs are included as
a component of the overall cost of merchandise.

WAREHOUSING AND DISTRIBUTION COSTS

Costs incurred at the Company's distribution centers for receiving, warehousing
and preparing product for delivery are expensed as incurred. These costs are
included in selling, general and administrative expenses in the accompanying
statements of income.

PROPERTY AND EQUIPMENT

Property and equipment are carried at cost. Depreciation is recorded using the
straight-line method over the estimated useful lives of the assets. Improvements
to leased premises are amortized using the straight-line method over the life of
the lease or the useful life of the improvement, whichever is shorter. The
following estimated useful lives are generally applied:

Life
---------------
Buildings 30 - 35 years
Leasehold improvements 5 - 15 years
Furniture, fixtures and equipment 5 - 10 years
Computer software and hardware 3 - 5 years

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment when circumstances indicate
the carrying amount of the asset may not be recoverable. Impairment is
recognized on assets classified as held and used when the sum of undiscounted
estimated future cash flows expected to result from the use of the asset is less
than the carrying value. Impairment on long-lived assets to be disposed of is
recognized by writing down the related assets to their fair value (less costs to
sell, as appropriate) when the criteria have been met for the asset to be
classified as held for sale or disposal. (Note 3)

ADVERTISING COSTS

Advertising costs consist of expenses incurred in connection with newspaper
circulars, television and radio, as well as direct mail, newspaper
advertisements and other promotions. Expenses incurred are charged to operations
at the time the related advertising first takes place.

INCOME TAXES

The Company accounts for income taxes using the liability method, whereby
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to be recovered or settled.


Page 8 of 18


STOCK-BASED COMPENSATION PLANS

As permitted by SFAS 123, "Accounting for Stock-Based Compensation," the Company
has elected to account for its stock-based compensation plans under the
intrinsic value-based method of accounting prescribed by Accounting Principles
Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to Employees."
Under APB No. 25, compensation expense would be recorded if the current market
price of the underlying stock on the date of grant exceeded the exercise price.

Had compensation cost for the Company's stock option plans been determined based
on the fair value at the grant date (derived through use of Black-Scholes
methodology) for awards under the plans consistent with the method prescribed by
SFAS 123, the Company's pro forma net income (loss) and net income (loss) per
share for the fiscal quarters ended March 27, 2004 and March 29, 2003, would
have been as follows (in thousands, except per share amounts):


THREE MONTHS ENDED
------------------
MARCH 27, 2004 MARCH 29, 2003
-------------- --------------

Net income - as reported $ 3,821 $ 125
Pro forma compensation expense,
net of income taxes (1,120) (641)
------------ ------------
Net income (loss) - pro forma $ 2,701 $ (516)
============ ============

Net income (loss) per share - basic:
As reported $ 0.10 $ 0.00
Pro forma $ 0.07 $ (0.01)
Net income (loss) per share - diluted:
As reported $ 0.09 $ 0.00
Pro forma $ 0.06 $ (0.01)


NET INCOME PER SHARE

The Company presents both basic and diluted earning per share ("EPS") on the
face of the statements of income. As provided by SFAS 128 "Earnings per Share",
basic EPS is calculated as income available to common stockholders divided by
the weighted average number of shares outstanding during the period. Diluted EPS
is calculated using the treasury stock method for options and warrants. All
earnings per share data included in the consolidated financial statements and
notes thereto have been restated to give effect to a two-for-one stock split.
(Note 7)

NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE:

Beginning in 2003, the Company adopted the provisions of Emerging Issues Task
Force Issue No. 02-16 ("EITF 02-16"). EITF 02-16 provides guidance for the
accounting and income statement classification for consideration given by a
vendor to a retailer in connection with the sale of the vendor's products or for
the promotion of sales of the vendor's products. The EITF concluded that such
consideration received from vendors should be reflected as a decrease in prices
paid for inventory and recognized in cost of sales as the related inventory is
sold, unless specific criteria are met qualifying the consideration for
treatment as reimbursement of specific, identifiable incremental costs. Prior to
adopting this pronouncement, the Company classified all vendor-provided
marketing support funds as a reduction in selling, general and administrative
expenses.

The effect of applying the consensus of EITF 02-16 on prior-period financial
statements resulted in a change to previously reported net income; thus, the
Company has reported the adoption of EITF 02-16 as a cumulative effect
adjustment in accordance with APB Opinion No. 20, "Accounting Changes" and FASB
Statement No. 3 "Reporting Accounting Changes in Interim Financial Statements"
and as permitted by EITF 02-16. For the three months ended


Page 9 of 18


March 29, 2003, the Company recognized a net income reduction of $3.1 million
($1.9 million net of income taxes) that resulted from the cumulative effect on
prior years.

NOTE 3 - ASSETS HELD FOR SALE:

Assets held for sale consists of certain buildings and related store properties
that the Company intends to sell. The Company applies the provisions of SFAS
144, "Accounting for the Impairment or Disposal of Long Lived Assets," to assets
held for sale. SFAS 144 requires assets held for sale to be valued on an
asset-by-asset basis at the lower of carrying amount or fair value less costs to
sell. In applying these provisions, recent appraisals, valuations, offers and
bids are considered. The Company recorded an impairment charge of $0.7 million
and $0.8 million in the first quarter of fiscal 2004 and 2003, respectively, to
adjust the carrying value of certain property to fair value, less costs to sell.
This charge is included in selling, general, and administrative expenses.

The buildings and properties held for sale are separately presented as assets
held for sale in the accompanying consolidated balance sheets. The assets are
classified as current, as the Company believes they will be sold within the next
twelve months and have met all the criteria for classification as held for sale
pursuant to SFAS 144.

NOTE 4 - CREDIT AGREEMENT:

In August 2002, the Company entered into a replacement unsecured senior
revolving credit agreement (the "Credit Agreement") with Bank of America, N.A.,
as agent for a lender group, expanding the maximum available borrowings from
$125 million to $155 million, extending the maturity to February 2006 and
increasing the number of participating banks from seven to ten. The Credit
Agreement bears interest at either the bank's prime rate (4.00% at March 27,
2004) or the London Inter-Bank Offer Rate (1.09% at March 27, 2004) plus an
additional amount ranging from 0.75% to 1.5% per annum, adjusted quarterly based
on the Company's performance (0.75% at March 27, 2004).

On January 28, 2004, the Credit Agreement was amended to extend the maturity
date to February 28, 2007. Additionally, the amendment included changes to
certain financial covenants, primarily to provide flexibility for capital
expenditures.

NOTE 5 - DERIVATIVE FINANCIAL INSTRUMENTS:

During fiscal 2000, the Company entered into an interest rate swap agreement as
a means of managing its interest rate exposure. This agreement, which matured in
November 2003, had the effect of converting certain of the Company's variable
rate obligations to fixed rate obligations.

The Company complies with SFAS 133 and recognized the fair value of the interest
rate swap in its consolidated balance sheet. The Company regularly adjusted the
carrying value of the interest rate swap to reflect its current fair value. The
related gain or loss on the swap was deferred in stockholders' equity (as a
component of comprehensive income) to the extent that the swap was an effective
hedge. The deferred gain or loss was recognized in income in the period in which
the related interest rate payments being hedged were recognized as an expense.
However, to the extent that the change in value of an interest rate swap
contract did not perfectly offset the change in the interest rate payments being
hedged, the ineffective portion was immediately recognized as an expense. Net
amounts paid or received were reflected as adjustments to interest expense.


Page 10 of 18


NOTE 6 - COMPREHENSIVE INCOME:

Comprehensive income includes the change in the fair value of the Company's
interest rate swap agreement (which expired in November 2003), which qualified
for hedge accounting. Comprehensive income for each period is as follows (in
thousands):
THREE MONTHS ENDED
MARCH 27, MARCH 29,
2004 2003
--------- ---------
Net income - as reported $ 3,821 $ 125
Change in fair value of effective portion of
interest rate swap agreement, net of
income taxes -- 360
--------- ---------
Comprehensive income $ 3,821 $ 485
========= =========

NOTE 7 - NET INCOME PER SHARE:

Basic net income per share is based on the weighted average outstanding common
shares. Diluted net income per share is based on the weighted average
outstanding common shares and reflects basic net income per share reduced by the
dilutive effect of stock options.

Net income per share is calculated as follows (in thousands, except per share
amounts):



THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 27, 2004 MARCH 29, 2003
---------------------------------------- -----------------------------------------
PER SHARE PER SHARE
INCOME SHARES AMOUNT INCOME SHARES AMOUNT
---------- ---------- ----------- ---------- ---------- -----------

BASIC NET INCOME PER SHARE:
Net income, before
cumulative effect of
accounting change $ 3,821 37,832 $ 0.10 $ 2,013 36,616 $ 0.05
Cumulative effect of
accounting change $ -- 37,832 $ -- $ (1,888) 36,616 $ (0.05)
-------- --------- -------- ---------

Net income $ 3,821 37,832 $ 0.10 $ 125 36,616 $ --
======== ========= ======== =========

DILUTED NET INCOME PER SHARE:
Net income, before
cumulative effect of
accounting change $ 3,821 41,812 $ 0.09 $ 2,013 39,716 $ 0.05
Cumulative effect of
accounting change $ -- 41,812 $ -- $ (1,888) 39,716 $ (0.05)
-------- --------- -------- ---------

Net income $ 3,821 41,812 $ 0.09 $ 125 39,716 $ --
======== ========= ======== =========


Weighted average shares outstanding are as follows:

THREE MONTHS ENDED
MARCH 27, MARCH 29,
2004 2003
--------- ---------
Shares outstanding 37,832 36,616
Dilutive stock options outstanding 3,980 3,100
--------- ---------
Diluted shares outstanding 41,812 39,716
========== =========


Page 11 of 18


On July 17, 2003, the Company's Board of Directors approved a two-for-one split
of the Company's common stock. As a result, stockholders received one additional
share on August 21, 2003 for each share held as of the record date of August 4,
2003. The par value of the Company's common stock remains $0.008. All share and
per share data included in the consolidated financial statements and notes
thereto have been restated to give effect to the stock split.

NOTE 8 - CONTINGENCIES:

LITIGATION

The Company is involved in various litigation arising in the ordinary course of
business. After consultation with legal counsel, management expects these
matters will be resolved without material adverse effect on the Company's
consolidated financial position or results of operations. Any estimated loss has
been adequately provided in accrued liabilities to the extent probable and
reasonably estimable. It is possible, however, that future results of operations
for any particular quarterly or annual period could be materially affected by
changes in circumstances relating to these proceedings.

ENVIRONMENTAL MATTERS

In connection with a contaminated leased store property vacated by the Company
upon relocation in 2002, the Company has agreed to indemnify the property owner
with respect to an environmental liability associated with the use of the
property, as defined in the related lease agreement. The Company has not paid or
accrued material amounts related to this property. The Company does not expect
the expense of these activities to exceed $0.1 million; however, because of the
uncertainties associated with environmental assessment and remediation
activities, the Company's future expenses to remediate the currently identified
site could be higher than amounts accrued. Future expenditures for environmental
remediation may be affected in the near-term by identification of additional
contaminated sites, the level and type of contamination found, and the extent
and nature of cleanup activities required.

NOTE 9 - IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS:

In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, "Consolidation of Variable Interest Entities ("VIE"), an
Interpretation of Accounting Research Bulletin No. 51" ("FIN 46"). The
Interpretation provides guidance for determining whether an entity is a variable
interest entity and evaluation for consolidation based on a company's variable
interests. The Interpretation was effective (1) immediately for VIEs created
after January 31, 2003 and (2) in the first interim period ending after March
15, 2004 for VIEs created prior to February 1, 2003. The adoption of FIN 46 had
no impact on the Company's financial position or results of operations.

NOTE 10 - SUBSEQUENT EVENT:

In April 2004, the Company entered into a commitment to construct a new
distribution center in Hagerstown, Maryland. The new facility is planned to be
approximately 500,000 square feet, with a total estimated investment of
approximately $19.0 million. Commencement of operations is planned for January
2005.


Page 12 of 18


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The following discussion and analysis describe certain factors affecting Tractor
Supply Company (the "Company"), its results of operations for the fiscal three
month periods ended March 27, 2004 and March 29, 2003 and significant
developments affecting its financial condition since the end of the fiscal year,
December 27, 2003, and should be read in conjunction with the Company's Annual
Report on Form 10-K for the fiscal year ended December 27, 2003. The following
discussion and analysis also contain certain historical and forward-looking
information. The forward-looking statements included herein are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 (the "Act"). All statements, other than statements of historical facts,
which address activities, events or developments that the Company expects or
anticipates 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 Company's business operations and other such matters
are forward-looking statements. To take advantage of the safe harbor provided by
the Act, the Company is identifying certain factors that could cause actual
results to differ materially from those expressed in any forward-looking
statements, whether oral or written, made by or on behalf of the Company.

All phases of the Company's operations are subject to influences outside its
control. Any one, or a combination, of these factors could materially affect the
results of the Company's operations. These factors include general economic
cycles affecting consumer spending, weather factors, operating factors affecting
customer satisfaction, consumer debt levels, pricing and other competitive
factors, the ability to attract, train and retain highly qualified employees,
the ability to identify suitable locations and negotiate favorable lease
agreements on new and relocated stores, the timing and acceptance of new
products in the stores, the mix of goods sold, the continued availability of
favorable credit sources, capital market conditions in general, and the
seasonality of the Company's business. Consequently, the forward-looking
statements made herein are qualified by these cautionary statements, and there
can be no assurance that the actual results or developments anticipated by the
Company will be realized or, even if substantially realized, that they will have
the expected consequences to or effects on the Company or its business and
operations. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
does not undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

THE FISCAL THREE MONTHS (FIRST QUARTER) ENDED MARCH 27, 2004 AND MARCH 29, 2003

Net sales increased 20.7% to $330.6 million for the first quarter of 2004 from
$273.8 million for the first quarter of 2003. The net sales increase resulted
primarily from the addition of new stores and same-store sales improvement of
12.4%. All product categories experienced same-store sales increases, led by
equine, animal and pet products. During the first quarter of 2004, the Company
opened a total of 13 new stores compared to 12 in the prior year period. The
Company also relocated three stores and closed one store. The Company operated
475 stores during the first quarter of 2004 compared to 445 stores during the
first quarter of 2003.

The gross margin rate for the first quarter of 2004 increased 50 basis points to
30.0% of sales from 29.5% of sales in the first quarter of 2003. This increase
reflects generally improved product costs and favorable changes in the sales
mix, partially offset by increased costs of merchandise containing steel and
other commodities that are currently experiencing price increases.

As a percent of sales, selling, general and administrative ("SG&A") expenses
decreased 10 basis points to 26.3% of sales in the first quarter of 2004 from
26.4% of sales in the first quarter of 2003. This decrease is primarily a result
of greater leverage from increased sales.


Page 13 of 18


Depreciation and amortization expense increased 30.3% over the first quarter of
2003 due mainly to costs associated with new and relocated stores, the purchase
of the Pendleton, Indiana distribution center, the addition of the Braselton,
Georgia distribution center and remodeled existing stores.

Net interest expense decreased 62.3% over the first quarter of 2003. This
decrease reflects stronger cash flow, which permitted reduced short-term
borrowings under the Credit Agreement to fund new store expansion. In addition,
the expiration of fixed rate agreements under the Credit Agreement and term note
resulted in less interest cost being incurred.

The Company's effective tax rate increased to 37.3% in the first quarter of 2004
compared with 37.0% for the first quarter of 2003 primarily due to changes in
the Company's effective state tax rate, resulting from the geographic
concentration of business.

As a result of the foregoing factors, net income for the first quarter of 2004
increased $3.7 million to $3.8 million from $0.1 million in the first quarter of
2003, which includes a charge of $1.9 million related to the cumulative effect
of the adoption EITF 02-16. Net income, as a percent of sales, increased to 1.2%
for the first quarter of 2004 compared to relative breakeven profitability for
the prior year period. Net income per diluted share increased to $0.09 from
$0.00 for the prior year period.

LIQUIDITY AND CAPITAL RESOURCES

In addition to normal operating expenses, the Company's primary ongoing cash
requirements are for expansion, remodeling and relocation programs, including
inventory purchases and capital expenditures. The Company's primary ongoing
sources of liquidity are funds provided from operations, commitments available
under its revolving Credit Agreement and normal trade credit. The Company's
inventory and accounts payable levels typically build in the first and third
fiscal quarters in anticipation of the spring and winter selling seasons,
respectively.

At March 27, 2004, the Company had working capital of $170.4 million, a $7.1
million decrease from December 27, 2003. This decrease is primarily attributable
to the changes in the following components of current assets and current
liabilities (in millions):

MARCH 27, DEC. 27,
2004 2003 VARIANCE
---------- ---------- ----------
Current assets:
Cash and cash equivalents $ 24.1 $ 20.0 $ 4.1
Inventories 402.1 324.5 77.6
Prepaid expenses and other current assets 31.0 27.7 3.3
Other, net 10.5 11.1 (0.6)
------- ------- -------
467.7 383.3 84.4
------- ------- -------
Current liabilities:
Accounts payable $ 231.2 $ 131.6 $ 99.6
Accrued expenses 65.8 73.9 (8.1)
Other, net 0.3 0.3 --
------- ------- -------
297.3 205.8 91.5
------- ------- -------

Working capital $ 170.4 $ 177.5 $ (7.1)
======= ======= =======

The increases in cash and cash equivalents and prepaid expenses are generally
due to the increase in the number of stores in operation and resulting increases
in sales, growth in operations, and timing of payments.

The increase in inventories and related increase in trade credit resulted
primarily from the expected seasonal build of inventories in general, the
addition of new stores, and increased sales expectations. Additionally, the
Company receives extended payment terms from certain vendors for seasonal
purchases. Payment terms vary from 30 to 180 days depending on the inventory
product. Thus, accounts payable increases exceeded the corresponding increases
in inventory.


Page 14 of 18


The decrease in accrued expenses is due largely to a $7.3 million decrease in
incentive compensation accruals, (resulting from payment of 2003 year-end
incentives during the first quarter of 2004) and general timing of other
payments.

Operations provided net cash of $27.6 million and used $4.6 million in the first
quarter of 2004 and 2003, respectively. The $32.2 million increase in net cash
provided in 2004 over 2003 is primarily due to changes in the following
operating activities (in millions):



MARCH 27, MARCH 29,
2004 2003 VARIANCE
--------- --------- ----------

Net income $ 3.8 $ 0.1 $ 3.7
Tax benefit of stock options exercised 6.7 0.9 5.8
Cumulative effect of a change in accounting principle -- 1.9 (1.9)
Income taxes currently payable -- (6.1) 6.1
Inventories and accounts payable 22.0 13.1 8.9
Accrued expenses (8.1) (16.0) 7.9
Other, net 3.2 1.5 1.7
--------- --------- ----------
Net cash provided by operations $ 27.6 $ (4.6) $ 32.2
========= ========= ==========


The increase in net cash provided by operations in the first quarter of 2004
compared with the first quarter of 2003 is primarily due to strong sales
performance and the timing of payments. The decrease in income tax payments is
due to, and offset by, the tax benefit of stock options exercised. The decrease
in the net cash used for inventories and accounts payable is due to the increase
in inventory levels and vendor payment terms described above. The increase in
accrued expenses is primarily due to lower payments of year-end incentives
related to the Company's fiscal 2003 performance compared to 2002 payments.

Investing activities used $24.5 million and $6.5 million in the first quarter of
2004 and 2003, respectively. The majority of this cash requirement relates to
the Company's capital expenditures. In January 2004, the Company purchased the
land and building related to its distribution center in Pendleton, Indiana for
$15.3 million. The facility was originally built to the Company's specifications
and had been leased since 1999. Additionally, the Company continues to open and
relocate stores for which fixtures and improvements are purchased.

Financing activities provided $1.1 million and $22.5 million in the first
quarter of 2004 and 2003, respectively, largely due to decreased borrowings
resulting from increased cash flow from operations and proceeds received from
the exercise of stock options.

The Company believes that its cash flow from operations, borrowings available
under the Credit Agreement, and normal trade credit will be sufficient to fund
the Company's operations and its capital expenditure needs, including store
openings and renovations, over the next several years.

OFF-BALANCE SHEET ARRANGEMENTS

The extent of the Company's off-balance sheet arrangements are operating leases
and outstanding letters of credit. Leasing buildings and equipment for retail
stores and offices rather than acquiring these significant assets allows the
Company to utilize financial capital to operate the business rather than
maintain assets. Letters of credit allow the Company to purchase inventory in a
timely manner.

The Company has outstanding letters of credit of $9.0 million at March 27, 2004.

SUBSEQUENT EVENT

In April 2004, the Company entered into a commitment to construct a new
distribution center in Hagerstown, Maryland. The new facility is planned to be
approximately 500,000 square feet, with a total estimated investment of
approximately $19.0 million. Commencement of operations is planned for January
2005.


Page 15 of 18


SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

Management's discussion and analysis of the Company's financial position and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires management to make informed estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities. The Company's
significant accounting policies, including areas of critical management
judgments and estimates, have primary impact on the following financial
statement areas:

- Inventory valuation - Self insurance
- Sales returns

The Company's critical accounting policies are subject to judgments and
uncertainties, which affect the application of such policies. (See Note 1 to the
Notes to the Consolidated Financial Statements for a discussion of the Company's
critical accounting policies.) The Company's financial position and/or results
of operations may be materially different when reported under different
conditions or when using different assumptions in the application of such
policies. In the event estimates or assumptions prove to be different from
actual amounts, adjustments are made in subsequent periods to reflect more
current information.

CHANGE IN ACCOUNTING PRINCIPLE

Emerging Issue Task Force Issue 02-16 ("EITF 02-16"), "Accounting by a Customer
(including a Reseller) for Certain Consideration Received from a Vendor"
provides guidance for the accounting treatment and income statement
classification for consideration given by a vendor to a retailer in connection
with the sale of the vendor's products or for the promotion of sales of the
vendor's products. The EITF concluded that such consideration received from
vendors should be reflected as a decrease in prices paid for inventory and
recognized in cost of sales as the related inventory is sold, unless specific
criteria are met qualifying the consideration for treatment as reimbursement of
specific, identifiable incremental costs. Prior to adopting this pronouncement,
the Company classified all vendor-provided marketing support funds as a
reduction in selling, general and administrative expenses.

The effect of applying EITF 02-16 on prior-period financial statements results
in a change to previously reported net income; thus, the Company has reported
the adoption of EITF 02-16 as a cumulative effect adjustment in accordance with
APB Opinion No. 20, "Accounting Changes," and FASB Statement No. 3, "Reporting
Accounting Changes in Interim Financial Statements," and as permitted by EITF
02-16. Accordingly, in the first quarter of fiscal 2003, the Company recorded a
cumulative effect of accounting change of $3.1 million ($1.9 million net of
income taxes) for the impact of this adoption on prior fiscal years.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company entered into an interest rate swap agreement as a means of managing
its interest rate exposure. This agreement, which matured in November 2003, had
the effect of converting certain of the Company's variable rate obligations to
fixed rate obligations. Net amounts paid or received are reflected as an
adjustment to interest expense.

The Company complies with SFAS Nos. 133, 137, and 138 (collectively "SFAS 133")
pertaining to the accounting for derivatives and hedging activities. SFAS 133
requires the Company to recognize all derivative instruments in the balance
sheet at fair value. SFAS 133 impacted the accounting for the Company's interest
rate swap agreement, which was designated as a cash flow hedge.

The Company is exposed to changes in interest rates primarily from its Credit
Agreement. The Credit Agreement bears interest at either the bank's base rate
(4.00% and 4.25% at March 27, 2004 and March 29, 2003, respectively) or LIBOR
(1.09% and 1.31% at March 27, 2004 and March 29, 2003, respectively) plus an
additional amount ranging from 0.75% to 1.50% per annum, adjusted quarterly,
based on Company performance (0.75% and 0.875% at March 27, 2004 and March 29,
2003, respectively). The Company is also required to pay, quarterly in arrears,
a commitment fee ranging from 0.20% to 0.35% based on the daily average unused
portion of the Credit Agreement.


Page 16 of 18


(See Note 4 of Notes to the Consolidated Financial Statements for further
discussion regarding the Credit Agreement.)

Although the Company cannot accurately determine the precise effect of inflation
on its operations, it does not believe its sales or results of operations have
been materially affected by inflation. The Company is subject to market risk
with respect to the pricing of certain products, which include, among other
materials, steel, corn, soybean and other commodities. If prices of these
materials continue to increase dramatically, consumer demand may fall and /or
the Company may not be able to pass all such increases on to its customers and,
as a result, sales and/or gross margins could decline. The Company has been
successful, in many cases, in reducing or mitigating the effects of inflation
principally by taking advantage of vendor incentive programs, economies of scale
from increased volume of purchases and selective buying from the most
competitive vendors without sacrificing quality.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

At March 27, 2004, the Company carried out an evaluation, under the supervision
and with the participation of the Company's management, including the Chief
Executive Officer and the Chief Financial Officer, of the design and operation
of the Company's disclosure controls and procedures. Based on this evaluation,
the Company's Chief Executive Officer and Chief Financial Officer have concluded
that the Company's disclosure controls and procedures (as defined in Rules
13a-15(a) and 15d-15(e) under the Securities Exchange Act of 1934) are effective
for gathering, analyzing and disclosing the information the Company is required
to disclose in the reports it files under the Securities Exchange Act of 1934,
as of March 27, 2004, and that such information is accumulated and communicated
to the Company's management, including the Chief Executive Officer and the Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosures.

CHANGES IN INTERNAL CONTROLS

There were no material changes in the Company's internal control over financial
reporting during the first quarter of 2004. There have been no significant
changes in the Company's internal controls over financial reporting or any other
factors that could significantly affect internal controls over financial
reporting subsequent to the date of the evaluation referred to above.


Page 17 of 18


PART II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

31.1 Certification of Chief Executive Officer under Section 302 of
the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer under Section 302 of
the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer and Chief Financial
Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

The Company filed a report on Form 8-K, dated January 23, 2004, issuing
a press release announcing its financial results for the fourth quarter
and year ended December 27, 2003. Notwithstanding the foregoing,
information furnished under items 9 and 12 of our Current Reports on
Form 8-K, including the related exhibits, is not to be incorporated by
reference into any filing of the Company with the Securities and
Exchange Commission.

The Company filed a report on Form 8-K, dated February 19, 2004, issuing
a press release to reiterate its expectations for annual net sales and
first half financial results. Notwithstanding the foregoing, information
furnished under items 9 and 12 of our Current Reports on Form 8-K,
including the related exhibits, is not to be incorporated by reference
into any filing of the Company with the Securities and Exchange
Commission.




SIGNATURE
---------


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

TRACTOR SUPPLY COMPANY

Date: May 4, 2004 By: /s/ Calvin B. Massmann
------------- --------------------------------------------
Calvin B. Massmann
Senior Vice President -
Chief Financial Officer and Treasurer
(Duly Authorized Officer and
Principal Financial Officer)



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