Harry Lawton
Chief Executive Officer at Tractor Supply
Thank you Mary Winn, and good morning, everyone, and thanks for joining us. As always, I'd like to begin by expressing my thanks and appreciation to my fellow 50,000 plus Tractor Supply team members for their commitment to each other and our customers and for their dedication to serving life out here. And this quarter, I'd like to give a special shout-out to our technology team, who did a tremendous job recovering our business from the crowd strike outage without a material impact.
So let's start with the operating environment for our business before I discuss our second-quarter results. Overall, the macroeconomic indicators that we all follow continue to be rather mixed for the consumer in the second-quarter. While in line with our expectations at the beginning of the year, I would characterize the health of the consumer is modestly more cautious than last quarter, but certainly still within the range of our forecast at the beginning of the year. Consumer spending on goods appears to be fatigued across income cohorts. While we've seen improvements in the consumer inflation rate, unemployment has ticked upwards to the highest rate since late 2021.
Additionally, consumer sentiment and consumer confidence are both subdued and the consumer spending landscape continues to be rather choppy. Additionally, in the recent personal consumption expenditures report, we saw another soft month for goods. While in line with our expectations, the ongoing shift in spending from goods to services continues to be a headwind for our business. The mix of goods as a share of PCE is still about 90 basis points above the pre-COVID average. As it relates to retail sales for the second quarter, US retail was flat to modestly positive with growth in non-durable categories, which was in line with our performance as a company.
And in the farm and ranch channel, we estimate that channel experienced mid-single-digit declines, which is indicative of our continued share gains in the channel. With that said, our business for the first-half of 2024 has performed right down the middle of our guidance. For instance, half of the month of the year have had positive comp sales and our year-to-date comp sales are up about 0.2%. And overall, our profitability is also right in line with our expectations and the team has continued to manage our business exceptionally well. As we look at our business in haves[Phonetic] and reflect back on the spring season, as we always talk about weather can certainly shift sales between quarters.
And given this year, the early Easter and then a couple of weeks of warm weather that we had there in late March, we estimate a potential pull-forward of $15 million to $20 million in sales from the first-quarter -- from the second-quarter into the first-quarter. And so if you think about this kind of balances out our performance across the two quarters and additionally, we thought we'd have some potential for an elongated spring, particularly in late June, but that did not materialize. On the customer front, of note, we did see our higher income customers moderate just modestly as spending for vacation travel has surged for this group and conversely though, our lower-income customer cohort moderated up sequentially from the first-quarter.
And net-net, our overall customer-base though continues to grow and be very strong. Now let's shift to some performance highlights for the quarter. We grew net sales by 1.5% with a comparable-store sales decline of 0.5%. Diluted EPS was $3.93. Our comparable-store sales performance was driven by a modest transaction decline of 0.6% with our average ticket coming in at 0.1% positive. As we shared on our last call, we anticipated that the quarter would be in line with our full-year guidance. As we move through the quarter, many of the same trends from the first-quarter continued to play out.
Importantly, we continue to see healthy customer engagement. The investments we've made in Neighbor's Club are world-class loyalty program, are a competitive advantage for us as we continue to see solid growth in both customer counts and customer retention. If you recall, in the first-quarter, we significantly enhanced our Neighbor's Club offerings. The changes were implemented with the goal to have members receive rewards faster and lower the spending required for tier qualifications. This quarter, as part of our ongoing and continued improvements in the program, we launched Hometown Heros, which recognizes military service members, veterans, and first responders. And this program brings together under one banner our long-standing support for the selfless men and women who serve America.
A highlight of the program is that our Hometown Heroes received the highest-level status and benefits of our Neighbor's Club loyalty program. And while still very early, we're pleased with their enrollment. Of note, about 20% of our Hometown Heroes to date are new to Neighbor's Club and about 15% are new to Tractor Supply. Once again, our Neighbor's Club comp sales outpaced our overall sales growth. At the same time, we also reached an all-time high on our sales penetration and record membership of more than 36 million members, and that means we've added nearly 5 million members over the last 12 months. And our Neighbor's Club retention rate remains remarkably consistent as our best customers continue to shop us more frequently and remain extremely loyal.
At the same time, though, we are seeing a slight disengagement of our non-core customers is down just modestly. We believe this is attributable to the overall macro headwinds that I mentioned in my opening remarks. And given that this customer is not as highly engaged in the kind of life out here lifestyle, our belief is that this customer cohort is a little sluggish or petite given the duration of inflation and higher-cost of living since 2022 and just being judicious in their spend. And as we look-forward, our Neighbor's Club is laser-focused on this opportunity as we improve our personalization capabilities, particularly with our customer data platform that we'll be implementing later in the year.
Our customer service scores continue to run at all-time highs with improvements every week for more than 2.5 years. Customer service is a consistent differentiator for Tractor Supply and our commitment to excellence in customer service and investments we've made in training, tools and technology are really paying-off with our customer and these efforts have also though received national recognition by various third-parties, including USA Today and Forbes.
Also, it's worth noting that the team received a CIO 100 award recently for our groundbreaking work to utilize AI to enhance the customer experience in our stores. Just great job by everyone around on our customer service. Moving to category performance, a highlight was the strong positive comps in big-ticket items for the second-quarter, notably in categories like riding lawnmowers, recreational vehicles, and sporting goods. And the commonality in these categories is strong innovation in newness and our customers really responded to this. Additionally, we continue to be pleased with our live goods performance, which comps well above the chain average despite the hot weather that impacted many of our other seasonal categories.
As we shared last quarter, we anticipated our consumable, usable and edible product would run modestly below the chain average in the second-quarter as deflation weighed on our average unit retail. We once again grew units in these categories and we believe we're continuing to gain market-share. The needs-based demand-driven nature of our product categories -- these product categories continues to drive unit velocity in this segment of our business. Clicking down into our two categories. In pet food, recent industry data suggests that the overall category was flat to negative in Q2. As it relates to our business, we continue to take share, but we have seen growth continue to moderate as the category disinflates and pet ownership trends remain soft.
Our customer shopping trip in this category is highly-differentiated. We offer a broad assortment from value to super-premium across national and exclusive brands in a pet-friendly environment, which now includes more than 900 pet wash locations. Through the second-quarter, we've had strong double-digit growth in our pet wash service. Additionally, the value of our mobile pet vet clinics is another great gateway for pet customers to find Tractor Supply. Year-to-date, we also have seen mid double-digit growth rates in visits to our clinics offered across more than 1,600 stores. The two of these in combination with the rest of our services and product benefits creates a great opportunity to reinforce our value proposition.
Additionally, pet ownerships benefit from the one-stop-shop convenience of our lifestyle retail format, in particular from the cross purchasing synergy with animal feeds. As we've mentioned, the vast majority of our customers have both an animal and a pet. In equine livestock and poultry feed, we continue to gain market-share. While our average unit retails were down mid to high single-digits in this category in Q2, conversely, we had strong mid-single-digit unit growth across all species. As large animal counts continue to pressure, we are certainly a share winner in the large animal categories with our strong unit growth.
And in poultry, our annual Spring Chick Days was another positive highlight in the quarter. The event builds on our reputation as the destination for backyard enthusiasts. From economy to organic feed as well as our assortment of premium breeds, our lineup continues to resonate with our customers. Much like the first-quarter, categories that performed below our comp sales were in our discretionary businesses such as clothing, footwear, and decor and also in the hardlines[Phonetic] products of the business, such as things like Ag fencing and pet kennels. Our digital sales continued to trend from last quarter of double-digit growth. We've accelerated our digital capabilities and that's fueling engagement of our customers and also improving our conversion rate. Our 10th and largest distribution center in Maumelle, Arkansas opened during the second-quarter.
The startup of the distribution center was right on schedule and shifting again last month. It was a great job by the team. Once again, we are capitalizing on the opportunity to realign with store servicing areas across the DC network to balance transportation costs and DC capacity while improving service levels to our store. Our supply-chain investments over the last four years have provided us with a structural gross margin benefit from the reduction in STEM model. Our garden centers had strong performance during the important second-quarter. We now have more than 500 garden centers across the chain.
The merchants did a great job with a differentiated assortment and strong in stocks on top of the planting season. With more variety and live goods as well as adjacent categories catering to outdoor living, we saw the customer respond positively to this multi-year growth driver. We opened 21 new track supply stores and three [indecipherable] Tractor Supplies in the quarter. Our new-store productivity continues to perform very well. In the year since announcing our expanded real-estate capabilities allowing for own development, we continue to anticipate material benefits to both revenue growth and operating margin rate. Our team has built-out capabilities to allow us to scale this initiative.
We now have nearly 50% of our pipeline in own development with our first locations already open. This development allows us to have rent reductions of 15% or more compared to our traditional build-to-suit and we continue to believe that we have a robust pipeline of low-risk organic growth opportunities ahead of us. To wrap-up, I believe the team is pleased but not satisfied with our first-half performance. We set high expectations for ourselves. Customer trends are relatively in line with our expectations. The team is executing well. In typical tractor supply fashion, we are effectively managing the factors that we can control and making progress on our Life Out Here strategy.
As we plan for the second half of the year, we anticipate that our customers remain prudent with their spending as is typical in an election year. At the halfway point of the year, we are narrowing our guidance for fiscal 2024 to reflect our performance year-to-date and our outlook for the second-half of the year. We continue to create more separation between us and our competition, thanks to our team members and the meaningful relationships they have with our customers in combination with our strategic initiatives. Our dedication to serving life out here remains unwavering. We will always strive to do the right thing. And now I'll turn the call over to Kurt.
