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Tractor Supply (TSCO) Growth Plans on Track, Stock Up 46% YTD

Strength in product offerings, store-growth endeavors and other strategies like ONETractor plans continue to aid Tractor Supply (TSCO) for quite some...

This story originally appeared on Zacks

Tractor Supply Company TSCO is climbing up the charts, thanks to its sturdy growth ploys including ‘ONETractor’ Strategy that helps it stay afloat amid the prevalent pandemic-borne crisis. To resonate well with the evolving consumer trends, management is quite focused on integrating the physical and digital channels to offer its customers a seamless shopping experience. It is also banking on its robust digital capabilities to drive e-commerce growth. The company is also benefiting from its sturdy portfolio including everyday merchandise, such as consumable, usable and edible products.

This Brentwood, TN-based company’s shares have surged 46.2% in the year-to-date period, outperforming the industry’s mere 0.3% growth. In addition, the Zacks Consensus Estimate of $12.29 billion for sales and $7.96 for earnings in 2021 suggests a respective increase of about 16% from the year-ago reported figures.

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Let’s Delve Deeper

Tractor Supply is on track to develop its Tractor Supply’s Out Here lifestyle assortment and convenient shopping format to win customers and grab a plum market share. The strategy is essentially based on five key pillars, which include customers, digitization, execution, team members and total shareholder returns. Some of the key initiatives undertaken to support its strategy comprise reinforcement of space productivity, enhancement of omni-channel initiatives, evolution of Neighbor’s Club loyalty program and acceleration of in-store merchandising execution.

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Additionally, the company launched the Field Activity Support Team (FAST) and is implementing various technology and service enhancements across the enterprise. Management is well on track to cater to customers via its latest stores, Project Fusion remodels and Side Lot transformation. The company has been strengthening its supply chain and boosting digital commerce to drive growth for the long haul. It is also committed to introducing the latest merchandising and marketing strategies to enrich customers’ experience.

Its omni-channel investments including curbside pickup, same day, next-day delivery, a re-launched website and a new mobile app are consistently adding up to its solid digital sales. In second-quarter 2021, e-commerce witnessed its largest ever quarterly sales. Also, its mobile app recorded more than 1.6 million downloads and now accounts for more than 10% of its digital sales. The Neighbor's Club added 5 million members year over year, representing nearly 65% of sales. The expansion of its Buy Online Pickup in Store facility to include drive-through pickup service is likely to aid growth.

The company continues gaining shares across all categories, online and in stores. The ‘ONETractor’ strategy aims at connecting store and online shopping. Backed by this initiative, the company continues to fuel growth, build customer-centric engagement, offer suitable products and services, and reinforce core infrastructure capabilities. In fact, it is steadily focusing on its growth initiatives, which include expansion of store base and incorporation of technological advancements to augment traffic and drive up the top line.

The company is well positioned to expand its store base. It remains on track to increase its domestic store to 2,500 in the long term. It plans to open 80 Tractor Supply stores and 10 Petsense stores in 2021.

Final Thoughts

All the aforesaid strategies are expected to continue delivering growth for Tractor Supply ahead. Addition of product categories and expansion of shopping capabilities are Tractor Supply’s notable drivers. Management looks forward to expanding its product offering, mainly in the lawn and garden categories, entering new categories and offering greater convenience via its Buy Online Pickup in Store capabilities including the drive-through pickup. A VGM Score of A with a projected long-term earnings growth rate of 9.7% is bolstering this currently Zacks Rank #3 (Hold) stock’s solid run on the bourses.

Key Picks in Retail

The TJX Companies TJX has a long-term earnings growth rate of 10.5% and a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gap GPS presently has a Zacks Rank of 1 and a long-term earnings growth rate of 12%.

Costco COST presently has a long-term earnings growth rate of 9.3% and a Zacks Rank #2 (Buy).

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