Why Tractor Supply Co. Is Bucking the Retail Sector's Fall Slowdown
The third quarter was not kind to many retailers due to abnormally warm weather across much of the country and cautious U.S. consumers. But, those retailers such as Tractor Supply Co. (TSCO) and Home Depot (HD) that sell goods to folks looking to improve the appearance of their home or work on a job site managed to buck the broader trend in retail in the third quarter of lackluster sales. ‘We are a needs-based business, so the customers that buy at Tractor Supply need the things that we sell – so we are not a discretionary store per se,’ explained Tractor Supply Co. president and CEO Gregory Sandfort in an interview. Tractor Supply Co.’s over 1,400 stores in 49 states tend to cater to owners of cattle ranches and farms who are often in need of new equipment and repair parts for expensive machinery. The company also sees a good mix of tradesmen and small business owners walk through stores that average 15,000 square feet in size, especially those tied to the oil services industry. Tractor Supply Co.’s third quarter same-store sales rose 2.9% year over year, driven primarily by solid demand for trailers, fencing and pet supplies. Earnings per share increased 16.4% year over year to $0.65, surpassing Wall Street forecasts by a penny. Tractor Supply Co. lifted its full year same-store sales and earnings outlooks. Same-store sales are expected to rise by 4% to 4.5%, up from a prior outlook of 3.5% to 4.5%. Earnings per share are seen in a range of $3.02 to $3.08 versus $3.00 to $3.08 previously. TheStreet’s Brian Sozzi reports.
