Tractor Supply beat Wall Street expectations for first-quarter profit on Thursday, as easing transport costs and steady demand for the farming supplies retailer’s pet food and gardening products bolstered its margins.

Demand for the company’s products held up as consumers stretched their inflation-constrained budgets to spend on consumables and need-based categories including dog and cat food, fertilizers and other farm supplies.

The company’s margins also benefited from its everyday-low-price strategy – which involves offering consistently low prices on its products throughout the year – and its Neighbor’s Club loyalty program, along with lower transport costs and efficient product cost management.

Tractor Supply’s quarterly gross margins expanded 50 basis points to 36 per cent.

The company reported net income of $198.2 million for the quarter ended March 30, higher than $183.1 million last year. Analysts on average expected $186.4 million, according to LSEG data.

“We saw several positive signs in our business during the quarter, including ongoing market share gains, transaction growth and strength in big ticket sales,” CEO Hal Lawton said.

For the first quarter, the company posted net sales of $3.39 billion, roughly in line with analysts’ average estimate of $3.40 billion. It earned $1.83 per share, above estimates of $1.72 per share.

The Tennessee-based company also reaffirmed its annual sales and profit forecasts.

• Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Devika Syamnath, of Reuters.