We don’t need meaningful acceleration to use your words to deliver that performance for the quarter. One of the things I already highlighted is that the last quarter of real material disinflation, particularly in animal feeds. So, it would be great to have that behind us and our outlook takes that into consideration. And if anything, I think there could be some modest upside as we look ahead, if you look at our quarterly comp last year, we had mid-single-digit comps in the month of April and May and then basically dropped off to a flat comp in the month of June. We can all recall June last year, it went immediately hot and you had the Canadian forest fires. Our outlook does not count on that performance improvement, but it’s an opportunity should we get the right conditions for that month.
Michael Lasser: Thank you very much.
Operator: Thank you. The next question comes from the line of Scot Ciccarelli with Truist. Your line is now open.
Scot Ciccarelli: Good morning its Scot Ciccarelli. I know it’s still a somewhat limited data set, but you talked about seeing good results from your garden centers where spring has broken. I know you guys have previously provided a framework for what you expect to happen. But can you provide any kind of real-time updates in terms of what you’re seeing on actual results?
Hal Lawton: Two things on that. So, we’ve gotten so much better at sorting our garden centers, staffing our garden centers, putting technology at play to drive our garden centers would encourage everyone on the call, if you hadn’t had a chance to go visit one of our garden centers in the spring to do so. We’ve got things this year like our [Indiscernible] plan of the month, as I mentioned on the call, which are knockout roads right now. We’re deploying our Tractor Vision software into all the garden center stores to optimize and improve customer service. Our grower network now that we’re in year three in many of these stores are now really lined up to produce tailored product for us. And we’re seeing those results in our live goods sales broadly across our — the country for us, even in areas where conditions have been ideal, we’re seeing good results there.
. The team is doing things like for Easter this year, for the first time, we brought any kind of in and out. We bought over 100,000 bulbs for Easter — with a real night packaging around and blew those things down. It just gives us even more confidence that we can execute in those sorts of ways. And so very pleased with our live goods and our garden center performance. In addition to the live goods piece, which was about half of the lift that we’re looking for. We also, this year, have gotten much better at what goes outside in our like garden centers versus what goes inside, you’ll see all of our past assortment out there this year. You’ll see organic soils closely, cross-merchandise besides our fruit and vegetables this year. You’ll see soil is also lined up in our side lots to be able to facilitate drive-through and load up there.
So we really got those things prime this year. And then as we look towards the back half — this year, you’ll see us have much more expansive programs and things like harvest and really blowing that out this year with [indiscernible], pumpkin, harvest product, Halloween product building a real kind of harvest destination in our garden centers. And then similarly, you’ll see winter wonderland really brought to life this year like we’ve not yet done for Christmas. So really excited about our garden center performance in the current spring period, but also as we look forward to the plans that we have, the team is doing an excellent job across all functions, really lining us up like — as an example, on that Easter program, we shipped that to our DCs. It was the first time we ran plants through our DC.
So a lot of learnings and a lot of continued execution there.
Scot Ciccarelli: Is there a way to quantify the comp lift to how?
Hal Lawton: Yes. So, as we exit Q2, we’ll have a much better sense of that as you all will certainly recall, our — over the last year, we said our garden centers were not performing at our expectations, because of the suboptimal spring conditions that we operated in last year, but that we had high expectations for this year, noted it is the year of the garden center, we’re performing at those expectations. But again, six, seven weeks into spring with another six, seven, eight strong weeks to go. So, more to come on that. But I think the short answer, I would say is they’re performing at our expectations kind of season to date.
Scot Ciccarelli: Thank you very much.
Operator: Thank you. The next question comes from the line of Peter Benedict with Baird. Your line is now open.
Peter Benedict: Good morning guys. Thanks for taking the question. Just curious, I believe the Orscheln stores are earning the comp base in the second quarter. Just curious how we should think about that? Any — anything that those stores are cycling from a year ago standpoint that we need to think about? And kind of related to that or maybe a little unrelated. I was curious if Seth would talk a little more about some of the merchandising innovation and newness that’s in the store and maybe what he’s most excited about as we look out over the balance of the year? thank you.
Kurt Barton: Yes, Peter, this is Kurt. I’ll start with your first part of your question and then hand it over to Seth to address the back end part of it. Orscheln is running right in line with our expectation. The first quarter, for instance, is still lapping a lot of the liquidation in Orscheln. And then in second quarter, as we transition, you begin to get outside of a lot of that liquidation. So, as we converted into our point of sale, it’s somewhat in line with the time frame of having all of the Tractor Supply inventory in the Tractor Supply System. So, we begin to lap a more normal time frame, particularly in the back half of the year. The Orscheln stores are running in line with a lot of our Midwest performance. We’re pleased with Orscheln.
Again, as we said when we made the acquisition, such a great value proposition opportunity for us, and it’s playing out well in that. Some of the things that we’ve done, we’ve got 81 stores that were sized very differently. We’ve been able to right-size and put many of the stores right in line with the Tractor Supply, 15-5 square foot. We’ve got some larger ones that allow us to do some test in those. But for the bulk over the period of the last 12 months, we’ve been — rebrand, put the fusion in there and make sure that it fits the best Tractor Supply streamlined, efficient shopping experience there. The team is engaging and learning a lot of the Tractor, the optimized Tractor process. So, across the board, very pleased with that. And Seth can be able to talk a little bit about some of the other aspects on the merchandising side with Orscheln.
Seth Estep: Yes, hey Kurt. Thanks Peter for the question. So, I would just say, if we look out to the back half, I’d speak a little bit more broadly even outside of Orscheln and even go back to kind of last quarter’s call and how really talked about this being the most innovation that we’ve seen in our stores since the start of the pandemic with all the reset activity, newness, partnership with our supplier base, their supply chains are kind of back — kind of back to normal levels. A couple of things that I would highlight that we’re really excited about. First, I would just say, we talked about the strength in big ticket right now and Hal talked a minute ago about Tractor and riders. I will tell you that exclusive lineup that we have, like in the Toro HAVOC is performing very well.
We see that innovation really responding, again, a product built for our life out here. Some things that we don’t speak much about when we think about garden itself. Like we just launched a comprehensive assortment of groundwork, soils and our exclusive brands that have been very strong. We just launched Weber. Very pleased with that start and how that’s going. And then if you go to the back half, I would just say, we mentioned in the prepared remarks, some of the newness coming in pet, but even things like ACANA Classics where we’ll be the first brick-and-mortar here in the U.S. launching ACANA Classics. Real Mesa, which has been a strong new digital brand, will be the first brick-and-mortar launch in Real Mesa in pet food, but it’s really targeted to kind of our consumer in that approach.
And then just the garden centers themselves and all the new activity that we have going throughout the course of the year and just lean into those activities and then rec. We think about Orscheln Farm & Home, like some of the learnings that we’re getting out of outdoor rec, you’ll see us launch new programs there midyear, getting really towards that kind of hunting customer, and we believe that those will be some categories that we can take across the Tractor Supply stores from a regional perspective and some localization perspective to really drive some business. So, again, just reiterate this kind of from 2024 lot of new innovation, a lot of newness and some most newness we’ve had over the past few years.
Peter Benedict: Thank you.
Mary Winn Pilkington: So, Elisa, we got time for maybe one more question just so that we’re sure we ended the top of the hour.
Operator: Great. Thank you. Our final question comes from the line of Peter Keith with Piper Sandler. Peter, please go ahead.
Peter Keith: Thank you everyone for squeezing me in. Nice results, by the way. So, I wanted to kind of just ask around the broader economy. Housing remains quite sluggish. So, how do you see the economic backdrop in general for the rural economies where you guys operate versus maybe the broader U.S. economy. We’ve been housing into that discussion would be helpful as well. I guess is rural outperforming? Or do you think performing more in line with the broader U.S.?
Hal Lawton: Hey Peter, thanks for the question. I start by the highest level rural is very — I think rural America is doing very well right now. We see our highest performance across our store base in rural America right now. If you look at the national statistics, you see net urban migration out — kind of more migration coming out of cities than in. And you see that migration going to rural America. I think there’s a variety of drivers for that, but that trend benefits us. Stepping back, as we acknowledged on our earnings call last quarter, we acknowledge 2024 would be a non-algo for us and that we look forward to getting back to our long-term algorithm as kind of economic conditions became more neutral for us. Most importantly, the two economic conditions that were most impacting us with the transition from goods to services in the context of PCE spend and the notion — and kind of disinflation.
