Tractor Supply Company (TSCO - Free Report) is performing exceedingly well, thanks to its solid omni-channel endeavors including store expansion and technological advancements. Moreover, the company targets the integration of physical and digital operations to offer consumers a seamless shopping experience through its “ONETractor” initiative.
Tractor Supply is benefiting from its Buy Online Pick Up in Store and mobile point-of-sale capabilities. The company is also consistently expanding its Neighbor’s Club loyalty program, which exceeded the targeted membership growth goals in 2018. Tractor Supply’s steady efforts to expand its Stockyard kiosk initiatives are added positives. Management expects all these strategies to play a major role in enhancing the company’s omni-channel network and boosting the top line.
Notably, the company delivered double-digit e-commerce sales growth for the 28th straight quarter in second-quarter 2019. Moreover, it aims at building customer-centric engagement, offering suitable products and services, and reinforcing core infrastructure capabilities through its “ONETractor” initiative.
With respect to the expansion of store base, Tractor Supply leverages an extensive network of stores to penetrate into target markets. This, in turn, enables the company to generate higher sales and expand market share. Currently, it is well-positioned to expand the store base, thus on track to increase the domestic stores to 2,500 in the long term. It expects to open about 80 namesake and 10-15 Petsense stores this year.
With the Petsense buyout, Tractor Supply has strengthened its presence in the flourishing pet specialty space. Currently, the company is focused on expanding the Petsense format in certain geographic markets. Notably, Petsense stores have been delivering positive comparable-store sales (comps), which continued in the second quarter and were in line with the company’s average. The Petsense stores remain focused on building long-term customer loyalty by using digital marketing methods to engage customers, revamp the website and enhance customer rewards program.
Recently, Tractor Supply, which shares space with Build-A-Bear Workshop, Inc. (BBW - Free Report) , Calyxt, Inc. (CLXT - Free Report) and Adecoagro S.A. (AGRO - Free Report) , launched its innovative apparel line, Ridgecut Toughwear. This performance workwear is likely to aid customers in enduring tough weather conditions during work. Ridgecut offers much comfort and durability, making their regular lifestyle much easier.
Quarterly Performance & Upbeat View
Driven by strategic efforts, Tractor Supply boasts an impressive earnings and sales surprise history. Notably, the company’s bottom line has outshined the Zacks Consensus Estimate in six of the trailing eight quarters now. Moreover, Tractor Supply recorded sales beat for the fifth straight time in second-quarter 2019.
Robust growth initiatives including ONETractor plan as well as solid comps growth and improved traffic led to the company’s impressive quarterly performance. Also, higher store transaction count and average ticket have been fueling comps. Robust growth in all geographic regions, broad-based strength across merchandising categories, and strength in everyday merchandise including consumable, usable and edible products are also driving results.
Following the company’s solid year-to-date performance, management raised the lower end of its sales and earnings view for 2019. Tractor Supply now projects net sales of $8.40-$8.46 billion, with comps growth of 3-4%. Earlier, it anticipated net sales of $8.31-$8.46 billion, with comps growth of 2-4%.
Earnings per share for the year is anticipated in the range of $4.65-$4.75 compared with $4.60-$4.75 guided earlier. This projected range depicts growth from $4.31 earned in 2018.
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